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EPA withdraws federal plan, approves Okla. Environmental Compliance Plan

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On Monday, the U.S. Environmental Protection Agency (EPA) approved a revised state implementation plan developed by Oklahoma officials and Public Service Company of Oklahoma (PSO), a unit of American Electric Power (NYSE: AEP),  to comply with the Clean Air Act. In conjunction with the approved state plan, the EPA withdrew its federal implementation plan regarding to the regional haze rule. This ruling will save the utility and its customers about $650 million in additional investments. The state plan also meets PSO’s obligations under the mercury and air toxics standard (MATS).

In 2010, Oklahoma officials and impacted utilities submitted a state implementation plan for the regional haze rule of the Clean Air Act, which was rejected by the EPA. Instead the EPA wanted to implement a plan developed by the federal government. PSO, state attorney general Scott Pruitt, and other parties, challenged the EPA’s rejection of the state plan by filing litigation. PSO later resubmitted a revised state implementation plan to the EPA.

Under the state plan, PSO will retire one of two coal-fired units at its Northeastern Station in Oologah in 2016.  It will replace that unit with power purchased from an Oklahoma natural gas–fired facility. PSO will install environmental controls on the second coal-fired unit at Northeastern Station by 2016 and will retire that unit in 2026.

The company recently signed contracts that will add about 600-MW of Oklahoma wind energy beginning in January 2016, saving customers $53 million in fuel costs during just the first year.