Utility firms in Arizona and New Mexico agree to a $160m settlement with the US Environmental Protection Agency (EPA) and the Department of Justice to reduce harmful carbon emissions from the coal-fired Four Corners Power Plant.
The investment will be used to control sulfur dioxide (SO2) and nitrogen oxide (NOx) pollution from the facility.
Located on the Navajo Nation near Shiprock in New Mexico, US, the facility will have to install new pollution control technology to control emission, according to the federal ruling.
The settlement has been reached with the majority owner and primary operator of the facility, Arizona Public Service (APS).
El Paso Electric, Public Service Co of New Mexico, Salt River Project Agricultural Improvement and Power District, and Tucson Electric Power, are the co-owners of the plant.
The settlement also includes Southern California Edison, a former co-owner of the plant.
Settlement with the EPA resolved the allegations that the companies violated the New Source Review rules of federal Clean Air Act by unlawfully modifying the Four Corners Power Plant without seeking permit or installing the best available air pollution control technology.
EPA and the Department of Justice have imposed a $1.5m civil penalty against APS, which will need to be paid within 30 days.
APS is also expected to spend $6.7m on three Navajo Nation projects, including a $3.2m project to replace or retrofit inefficient, higher-polluting wood-burning or coal-burning stoves or fireplaces with cleaner-burning and more energy-efficient heating appliances.
A further $1.4m will need to be invested by the firm for a weatherisation project that will upgrade and better insulate Navajo homes to bring down their energy use.
New Mexico US attorney Damon P Martinez said: "This settlement will reduce pollution from the Four Corners Power Plant for years to come, and requires the plant’s owners to fund significant health and environmental projects that will further benefit the Navajo Nation and other communities impacted by the Plant."
The Four Corners plant is a 1,630MW plant located in the Navajo Nation area of New Mexico was being investigated since 2009.