Dec. 13, 2000

AQMD REACHES LANDMARK SETTLEMENT
FOR ONE OF REGION’S LARGEST AIR QUALITY VIOLATIONS

The South Coast Air Quality Management District and representatives of AES Alamitos LLC reached an agreement on Tuesday for a series of conditions to protect the environment and settle an air quality violation for a record $17 million penalty.

The settlement package will ensure that the company's Alamitos power plant, located in Long Beach, fast tracks full compliance with all air quality regulations as of Jan. 1, 2001.

"This landmark settlement addresses one of the most egregious air pollution violations in this agency's history," said Barry Wallerstein, AQMD executive officer. "This settlement will serve as a strong deterrent to future violations by industrial facilities.

"It also will ensure that AES can generate electricity to help ease the state's power shortage while guaranteeing protection for the environment."

AES exceeded its year 2000 nitrogen oxide emissions allocation by about 685,000 pounds for the third quarter of 2000 and may exceed its fourth quarter allocations by about 500,000 pounds. Nitrogen oxides are emitted by power plant boilers and other combustion sources and are a key pollutant contributing to ozone and fine particulate.

Under terms of the four-page settlement agreement, AES agreed to:

• Pay a total cash penalty to AQMD of $17 million, with $13 million due within 30 days and the remaining $4 million due by July 1, 2001;
• Install state-of-the-art air pollution controls on its power plants at Alamitos, Redondo Beach and Huntington Beach;
• Operate its three power plants on the principle of "environmental dispatch" until all air pollution control equipment is installed, using the cleanest units first and the dirtiest last to meet power demand;
• Deduct from its future year allocations this year's excess emissions; and
• Purchase emission credits as needed to make up for this year's excess emissions.

AES and about 330 other Southland firms are governed by AQMD's RECLAIM program, which caps each facility's nitrogen oxide and sulfur oxide emissions at a set amount that declines each year until 2003. While facilities should install pollution controls to keep emissions under their caps, facilities that exceed their caps can purchase credits from others that have stayed under their limits.

"The requirements for an environmental dispatch of electric power break new ground for California and the nation," Wallerstein said. "We have succeeded in protecting Southern California's air quality while ensuring that power plants can address the state's energy needs."

AQMD is the air pollution control agency for Orange County and the urban portions of Los Angeles, San Bernardino and Riverside counties.

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AQMD Home Page
This page updated: March 01, 2004
URL: http://www.aqmd.gov/news1/AES_settlement.htm