(December 14, 2000) -- An ELB power plant at 690 Studebaker Rd, operated by AES Alamitos LLC, has agreed to pay a $17 million penalty as part of a settlement agreement concerning a major air pollution violation alleged by the the South Coast Air Quality Management District (AQMD).

An AQMD release states, "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."

The settlement agreement says AES Alamitos, LLC contested the allegations but "agreed to resolve any and all outstanding issues in this regard without a finding of fault or liability."

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

Under the terms of the settlement agreement, AES Alamitos, LLC 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.

AQMD's release notes 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. Although facilities should install pollution controls to keep emissions below their caps, facilities that exceed their caps can purchase credits from others that have stayed under their limits, AQMD said.

AQMD executive officer Barry Wallerstein said in his agency's release, "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."