Consumers Energy Finalizes Environmental Agreement with EPA

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Sep 16, 2014, 01:16 ET

JACKSON, Mich., Sept. 16, 2014 /PRNewswire/ -- Consumers Energy has reached agreement with the U.S. Environmental Protection Agency (EPA) and U.S. Department of Justice (DOJ) that resolves alleged past violations of New Source Review and opacity provisions of the Clean Air Act. The agreement does not include any admission of wrongdoing on the part of the company.

Consumers Energy is one of many U.S. energy providers, including numerous Midwest utilities, whose routine maintenance, repair and replacement in electric generation facilities were reviewed as part of the EPA's Coal-Fired Power Plant Enforcement Initiative that began in 1999. The initiative has resulted in more than 25 settlements nationwide.

"Today's settlement concludes over five years of negotiation with the EPA and U.S. Department of Justice and fully resolves these issues with the government," said John Russell, Consumers Energy's president and chief executive officer. "We're moving forward with our plan to continue to improve air quality, move to a cleaner generation portfolio, and provide Michigan homes and businesses with safe, affordable and reliable energy."

Overall, Consumers Energy will spend more than $2 billion in upgrades at its power plants to help produce the cleanest air in Michigan in the last 50 years. These technology upgrades have produced substantial reductions in all major emissions, including mercury, sulfur dioxide, nitrogen oxides and particulate matter.

The EPA in 2007 and 2008 alleged that Consumers Energy had violated federal environmental regulations. The issues involved opacity, or smoke density emitted by power plants, as well as requirements to obtain certain permits and install emissions control equipment. Under terms of the settlement, Consumers Energy agrees to pay a $2.75 million civil penalty.

The agreement filed today in federal court includes key components related to the company's coal-fired generating fleet:

New or more stringent emissions limits in effect by year-end for nitrogen oxides, sulfur dioxide and particulate matter at each of Consumers Energy's coal-fired facilities.
As previously announced, the retirement of Consumers Energy's seven oldest coal-fired units. These include three units at the J.R. Whiting Generating Complex near Luna Pier; two at the B.C. Cobb Generating Plant in Muskegon; and two at the Karn/Weadock Generating Complex near Bay City. These units collectively are capable of generating about 950 megawatts. These units will comply with new interim emissions limits until their retirement in April 2016.

Also under the settlement, Consumers Energy will invest at least $7.7 million in environmental mitigation projects. The new spending will include:

Up to $4 million on the development or installation of renewable energy projects, including wind, solar or anaerobic digestion.
A $500,000 payment to the National Park Service for restoration efforts at Sleeping Bear Dunes National Lakeshore Park in Leelanau County in northern Michigan, as well as Cuyahoga Valley National Park in Ohio.
Up to $500,000 in energy efficiency for low-income residents and public schools.
Up to $2 million for the acquisition, donation and restoration of ecologically significant lands, watersheds, vegetation or forests in or near Consumers Energy's service territory.
A minimum of $1 million and up to $2 million on rebates and subsidies to help individuals replace or retrofit wood-burning stoves.
Up to $3 million to replace gas and diesel-powered fleet vehicles with alternative fuel or compressed natural gas vehicles; retrofitting fleet vehicles with engines designed to reduce emissions; and building one or more charging stations for electric or compressed natural gas vehicles.

Consumers Energy, Michigan's largest utility, is the principal subsidiary of CMS Energy (NYSE: CMS), providing natural gas and electricity to 6.5 million of the state's 10 million residents in all 68 Lower Peninsula counties.

For more information regarding Consumers Energy, visit us at: www.consumersenergy.com or join us on Facebook at: www.facebook.com/consumersenergymichigan

This news release contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, Rule 175 of the Securities Act of 1933, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in CMS Energy's and Consumers Energy's Securities and Exchange Commission filings. Forward-looking statements should be read in conjunction with "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS" sections of CMS Energy's Form 10-K and Consumers Energy's Form 10-K each for the year ended December 31, 2013 and as updated in CMS Energy's and Consumers Energy's subsequent Forms 10-Q.

CMS Energy's and Consumers Energy's "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS" sections are incorporated herein by reference and discuss important factors that could cause CMS Energy's and Consumers Energy's results to differ materially from those anticipated in such statements.

SOURCE Consumers Energy