North Dakota, the Department of Justice and the US Environmental Protection Agency have reached a settlement over allegations that utilities Minnkota Power Cooperative and Square Butte Electric Cooperative had violated New Source Review (NSR) provisions of the Clean Air Act.

The settlement will see annual emissions of sulphur dioxide (SO2) and nitrogen oxides (NOx) cut by about 23,600 tonnes and 9,400 tonnes respectively from the lignite-fired Milton R. Young station located near Center, North Dakota.

The deal marks the first NSR settlement with a power plant utility in the Western US and the EPA estimates that the pollution controls and other measures required by the settlement would cost the utilities more than $100 million.

The deal resolves allegations that modifications at the station triggered NSR requirements including the requirement to obtain permits and install the best available emissions control technology. Under the terms of the deal, the utilities will install or upgrade flue gas desulphurisation equipment at each of the two units at the station. Both units will also install systems to reduce NOx emissions by at least 40% and, in addition, the utilities will later install whatever NOx controls that North Dakota determines to be the best available control technology for those units. The NOx controls will be installed beginning in 2007 with final operation by the end of 2011.

Minnkota and Square Butte will also fund $5 million in renewable energy development projects, including wind power, in their service area of North Dakota and Minnesota.

This is the tenth settlement that the federal government has entered into to address Clean Air Act NSR violations by coal-fired power plants nationwide.