The EPA today approved a revised state implementation plan developed by Oklahoma leaders and Public Service Company of Oklahoma (PSO) to comply with various rules of the Clean Air Act, including the regional haze rule.  At the same time the EPA approved the state plan, it rescinded its federal implementation plan relating to the regional haze rule, which would have cost the utility and its customers about $650 million more in additional near-term investments than the state plan.  The state plan also resolves PSO’s obligations under the mercury and air toxics standard and allows the utility to avoid additional, expensive investments to meet other current and emerging environmental regulations affecting coal plants.

PSO president and chief operating officer Stuart Solomon said, “Today’s action by the EPA means the state of Oklahoma and PSO have determined the best way to comply with federal environmental rules for PSO’s generating plants. Not only have we avoided the cost to our customers of a more onerous federal plan, we have ensured compliance with numerous Clean Air Act provisions in a reasonable and cost-effective way that utilizes more of Oklahoma’s natural gas and renewables."

In 2010, Oklahoma leaders and impacted utilities submitted a state implementation plan for the regional haze rule of the Clean Air Act.  The plan was rejected by the EPA, and the agency notified the state it would instead require implementation of a plan developed by the federal government.  PSO, along with the state attorney general and other parties, filed litigation challenging the EPA’s rejection of the state plan.  At the urging of – and with assistance from – state leaders, PSO began developing a revised state implementation plan, which was later resubmitted to the EPA.

Under the state plan, PSO will retire one of two coal-fired electric generating 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 later retire that unit in 2026. Replacement power for that facility will be determined by evaluating the best options for PSO customers at that time.  In the meantime, PSO continues to seek low-cost, reliable options for power, including wind energy.  The company recently signed contracts that will add nearly 600 megawatts of Oklahoma wind energy beginning in January 2016, saving customers $53 million in fuel costs during just the first year.

“We are pleased the EPA has approved a plan developed by PSO and state leaders," said Stuart Solomon. "I want to thank Governor Fallin and her administration for their leadership and assistance in helping develop this plan along with the Oklahoma Department of Environmental Quality.”

Solomon continued, “Complying with the federal Clean Air Act is a daunting challenge for electric utilities across the country.  Many of the proposed rules coming out of Washington are controversial, but PSO still has to comply with federal law and at the same time, make sure that the lights stay on for our customers.  We are pleased to have reached a resolution to these challenges in a way that provides certainty to our customers in the critical areas of price and reliability.”

PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving approximately 540,000 customers in eastern and southwestern Oklahoma.  Based in Tulsa, PSO has 4,269 megawatts of generating capacity, and is a significant provider of wind energy in the state.  News releases and other information about PSO can be found on the World Wide Web at PSOklahoma.com.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a 40,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.