Judge orders shutdowns of plant units

A federal judge in Indianapolis has ordered the shutdown of three units at a Terre Haute coal-fired power plant because of clean air violations committed almost two decades ago.

In his 58-page ruling issued late Friday afternoon, U.S. Judge Larry McKinney in the Southern District of Indiana ruled that Duke Energy – which bought out Cinergy Corp. in 2006 – has to close three units by Sept. 30.

This is the latest decision in the decade-old case of U.S., et al. v. Cinergy Corp., et al., 1:99-CV-1693, which involves issues surrounding parts of the Clean Air Act intended to make sure that older power plants that have major upgrades also meet more modern pollution limits with new permitting and emissions controls. A federal jury in a May 2008 liability trial found that Cinergy had violated the law at its Wabash plant, but cleared the company regarding modifications made at four other plants in Indiana and Ohio. A remedy trial earlier this year paved the way for this ruling from Judge McKinney.

Most of the plant's capacity is unaffected by the ruling, which calls for units 2, 3 and 5 to be closed down.  The remaining two Duke-owned units at the station will be unaffected. The change will remove about 39 percent of the station's overall 677-megawatt power-generating capacity by shutting down units that are more than 50 years old, according to Duke.

Judge McKinney accelerated a timetable proposed by Duke in February, ordering that the shutdown happen this year rather than 2012. His ruling also means the company won't have to install additional emissions reduction equipment on the two units staying open, that Duke will need to surrender money spent between May 2008 and September 2009, and that Duke will pay less in fines on the Beckjord plant near Cincinnati – $687,500 instead of $1.32 million.

"We are disappointed with the court's decision to accelerate the shutdown…," Duke Energy Chief Legal Officer Marc Manly said in a written statement. "But even though disappointed, I will reiterate our satisfaction that after 10 years of litigation, the company's position regarding power plant projects was vindicated in the vast majority of instances about which the government originally complained. We will continue to review the Court's ruling and evaluate our options."

This fits into a larger clean air violation puzzle ongoing in federal court. After last year's trial, Judge McKinney ordered a new trial be held on projects at three plants in Indiana and Ohio. That happened last month, and the jury found violations on two repair projects at the Gallagher plant in Floyd County and none at four other projects at the Gibson plant in southwest Indiana and the Beckjord plant in Ohio. A second remedy phase for these recent violations hasn't yet been scheduled.