Updated: July 16, 2014 at 5:00 pm
MINNEAPOLIS (AP) — Minnesota Power has agreed to install technology to reduce air pollution from three coal-fired plants in northeastern Minnesota, government officials and the company said Wednesday.
The Duluth-based company will install the technology to help settle allegations that it violated the federal Clean Air Act by failing to get permits and installing less-than-best pollution control technology at its plants, the U.S. Environmental Protection Agency and the Department of Justice said.
The deal also calls for Minnesota Power to pay a $1.4 million penalty to resolve Clean Air Act violations and spend at least $4.2 million on environmental projects benefiting local communities. The state of Minnesota will receive $200,000 of the penalty.
"Today's settlement will require system-wide controls to reduce harmful air pollution and will benefit Minnesota residents today and for years to come," Sam Hirsch, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division, said in a news release. "This innovative agreement will also fund projects that contribute to renewable energy production and restore valuable wetland habitat."
The air pollution control technology will be installed at plants in Cohasset, Hoyt Lakes and Schroeder. The agencies say it is estimated to cost more than $500 million.
Minnesota Power, a utility division of publicly traded ALLETE Inc., said the settlement does not include any admission of wrongdoing by the company.
"The company has been in discussions with the EPA since 2008 to settle this matter to avoid costly litigation, in the best interest of our customers and other stakeholders," ALLETE senior vice president, general counsel and secretary Deb Amberg said in a statement.
Among projects under the settlement that Minnesota Power intends to fund are $2 million for a large-scale solar installation system for the Fond du Lac Band of Lake Superior Chippewa and $200,000 to the National Park Service to restore wetlands at Voyageurs National Park. Other possible projects include a forest restoration project, an electric car charging station in northeastern Minnesota, clean diesel programs and upgrading wood-burning appliances to reduce pollution.
The settlement must be approved by a federal judge in Minnesota after a 30-day comment period.
Minnesota Power provides electricity to 144,000 customers and 16 municipalities in northeastern Minnesota.