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U.S. SETTLES LANDMARK CLEAN AIR ACT CASE AGAINST ELECTRIC UTILITY

WASHINGTON - The Justice Department and the Environmental Protection Agency today announced the settlement of a major Clean Air Act enforcement action against the Tampa Electric Company that requires the company to significantly reduce harmful air pollution from its power plants and pay a $3.5 million fine. This agreement is the first to result from a national enforcement action aimed at cutting emissions from coal-fired power plants.

In November 1999, the government charged that Tampa Electric Company and six other utilities violated the law at their power plants by making major modifications to the plants without installing equipment required to control smog, acid rain and soot. The settlement filed today in U.S. District Court in Tampa is unprecedented in its scope, and it marks a major step in the government's ongoing initiative to stop pollution illegally released from coal-fired power plants.

"The Tampa Electric settlement is the first reached under EPA's national enforcement action against coal-fired power plants for violations of the Clean Air Act," said EPA Administrator Carol M. Browner. "The Tampa Electric settlement represents a landmark in the Clinton-Gore administration's efforts to provide the people of Florida with cleaner, healthier air. It ensures great protection of public health from air pollution for Floridians and their environment. We are hopeful that other utilities will follow Tampa Electric's example, and help bring similar clean-air benefits to many other areas in this country."

"This settlement will save the environment and the people of Florida from hundreds of thousands of tons of air pollution that would have been released from Tampa Electric Gannon and Big Bend power plants," said Lois J. Schiffer, Assistant Attorney General for Environment and Natural Resources at the Department of Justice. "The company stepped up to the plate quickly to improve the quality of the air that Florida residents breathe. Other utilities would benefit themselves and the public by following Tampa Electric's leadership."

The settlement requires Tampa Electric to pay a $3.5 million civil penalty. Under the agreement, Tampa Electric will install permanent emissions-control equipment to meet stringent pollution limits; implement a series of interim pollution-reduction measures to reduce emissions while the permanent controls are designed and installed; and retire pollution emission allowances that Tampa Electric or others could use, or sell to others, to emit additional pollution into the environment. The settlement also requires the company to spend between $10 and $11 million on environmentally beneficial projects in the region designed to mitigate the impact of emissions from the company's plants.

None of the settlement requirements is conditioned on whether or not Florida law allows the company to pass the costs of the compliance on to its customers.

The settlement is the first to result from seven lawsuits filed last November. The United States also brought actions against American Electric Power, FirstEnergy, Illinois Power, Southern Indiana Gas & Electric Company, Cinergy, and the Southern Company. By filing these unprecedented lawsuits, the United States aims to reduce dramatically the amount of sulfur dioxide, nitrogen oxides, and particulate matter that coal-fired power plants release into the atmosphere.

The lawsuits assert that these power plants have illegally released massive amounts of air pollutants, contributing to some of the most severe environmental problems facing the nation today. For years, the plants have operated without the best available emissions-control technology. This enforcement initiative targeted a total of 17 coal-fired power plants located in Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Mississippi, Ohio, Tennessee, and West Virginia.

The federal settlement decree requires Tampa Electric to:

• Starting in 2003, burn natural gas - a very clean fuel - at the Gannon facility near Tampa, and install appropriate pollution controls for such gas-fired electricity generation.
• Starting in 2008, either install first-class pollution control equipment at Big Bend regardless of the fuel Tampa Electric ultimately decides to use to make electricity at that location.

Carry out interim pollution control measures at Big Bend while final, permanent controls are selected, designed, and installed; these interim steps include:

• Starting as soon as possible, improve the use and operation of "scrubbers" so they trap more of the sulphur dioxide released from burning coal before it can escape into the environment;
• Starting in 2002, install $3 million worth of "combustion controls" that will begin to reduce the nitrogen oxides created by Big Bend; and
• Starting in 2001, optimize the operation and maintenance of existing electrostatic precipitators which will keep more particulate matter, which constitutes soot, from reaching the environment.
• Continue to meet stringent emission limits for key pollutants (nitrogen oxides, sulphur dioxide, particulate matter) not only during the life of the consent decree but also after its termination.
• Starting in 2005, never burn coal at Gannon, and never burn coal at any Big Bend electric generation system that Tampa Electric either shuts down or changes over to natural gas fuel under this settlement.
• Surrender significant amounts of allocation "credits" which otherwise could be used by Tampa Electric or others to emit additional pollution into the air;
• Carry out at least $5 million worth of EPA-approved projects to demonstrate innovative means for reducing emissions of nitrogen oxides;
• Carry out or finance up to $2 million in research and pollutant measurement work in the Tampa Bay estuary; and
• Pay a civil penalty of $3.5 million in light of the past violations of law alleged in the complaint filed the Department of Justice on behalf of EPA.

So that Tampa Electric may accomplish these important environmental improvements and continue supplying energy to its customers, the settlement provides significant flexibility for the company. The work called for is phased in over a ten-year period. The settlement also accounts for any emergency conditions that might require extra generation of electricity by the company, and the settlement provides options for how Tampa Electric will meet its environmental obligations if business conditions call for restoring electric generating capacity at Gannon or Big Bend that the company may decide to shut down.

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