WPL agreed Monday to shutter three coal-fired power units that generate a combined 270 megawatts as part of the court settlement with the EPA and the Sierra Club.
WPL, an Alliant Energy subsidiary, also agreed that a third plant with a 300MW power capacity would either be shut down or converted by 2018.
Aside from the closure of the older, less productive plants, WPL must also spend more than $1 billion to install pollution control technology on three other coal-fired power units.
The settlement resolves allegations from the EPA, the Department of Justice and the Sierra Club that the company modified its Colombia, Edgewater and Nelson Dewey stations without receiving proper approvals.
The power company previously announced similar changes but the conclusion of the settlement now binds it by law.
WPL president John Larsen called the settlement a "win-win".
"The terms of the settlement are in line with WPL's energy resources strategy announced in July 2012, which called for investing more than $1 billion from 2012 through 2016 to transition WPL's generation fleet to meet customers' energy needs in a cost-effective manner now and into the future, while continuing to limit emissions and advance renewable energy," Larsen said in a statement.
"This agreement enables WPL to remain focused on its operations and continue providing our customers with safe and reliable power."
The settlement is the 26th of its kind by the Justice Department and the EPA to enforce Clean Air Act requirements.
“The settlement will dramatically reduce harmful air emissions from these plants – more than eighty per cent of the combined emissions of nitrogen oxides, sulfur dioxide and particulate matter will be eliminated in less than six years,” EPA Region 5 administrator Susan Hedman said.
“The required mitigation projects will promote renewable energy development and help to restore natural areas in Wisconsin and neighboring states.”
The units that will be shut down under the settlement are two 100MW units at the Nelson Dewey plant in Cassville, Wisconsin and one 70MW unit at the Edgewater plant in Sheboygan.
The 300MW coal-fired unit at Edgewater also must be shut down or converted to gas by the end of 2018.
As well as investing more than $1 billion in pollution control technology, WPL must spend a total of $8.5 million on environmental mitigation projects and pay a civil penalty of $2.45 million to resolve alleged violations of the Clean Air Act.
The company said in the statement that it maintained it never violated the act but entered the settlement to “avoid costs to its customers, unnecessary delays and ongoing uncertainty associated with litigation".
The $8.5 million is to be spent on projects that will benefit the environment and human health in communities located near the facilities, including $260,500 to the US Forest Service and $260,500 to the National Park Service, to be used on projects to address the damage from emissions.
The remaining $7.48 million will be spent on a combination of projects including land restoration and investment in renewable energies.
The settlement was lodged with the US District Court for the Western District of Wisconsin and is subject to a 30-day public comment period and final court approval.