HOUSTON (Reuters) - A unit of NRG Energy Inc agreed to spend $250 million to install pollution control equipment at its 1,489-megawatt Big Cajun II coal-fired plant in Louisiana under a settlement with the U.S. Justice Department and the Environmental Protection Agency, the government said on Tuesday.
In addition, NRG's Louisiana Generating unit will pay a civil fine of $3.5 million and spend an additional $10.5 million on environmental projects in the state as part of consent decree filed in federal court in Baton Rouge to settle alleged violations of the Clean Air Act dating back more than a decade to a previous owner, the Justice Department said.
If approved by the court, Louisiana Generating will install equipment to reduce emissions of sulfur dioxide (SO2) and nitrogen oxides(NOx) by the end of 2015. The company agreed to further reduce air pollution from the plant by 2025.
"This settlement will secure substantial reductions in harmful emissions from the plant which will have a beneficial impact on air quality for residents of Louisiana and downwind states, including low-income communities who have been historically overburdened with pollution," said Ignacia S. Moreno, assistant attorney general for the Justice Department's environment and natural resources division.
Separately, NRG said upgrades to reduce NOx and SO2 will be completed during regular plant outages by April 2015.
To meet the EPA's Mercury Air Toxics Standards (MATS) which goes into effect in 2015, NRG said it also will convert one of Big Cajun's three coal-fired units to run natural gas, eliminating virtually all mercury and particulate matter from its emissions.
"This conversion will allow us to meet new EPA regulations as we see greater diversity and flexibility in our ability to meet the power needs of our customers on the hottest and coldest days," said Jennifer Vosburg, Louisiana Generating's president.
Vosburg said plant modifications to cut emissions began after NRG purchased Big Cajun II. Costs to achieve the planned emission improvements are within the environmental capital costs previously disclosed by NRG.
(Reporting by Eileen O'Grady in Houston; Editing by Tim Dobbyn)
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