One of the largest power utilities in the US, American Electric Power, has agreed to spend US $4.6 billion to reduce harmful emissions from its 16 coal-fired power plants. The settlement, which was reached after eight years of legal battle over alleged violations of the Clean Air Act, is the largest environmental settlement in US history.

American Electric Power (AEP) provides electricity to more than five million customers in 11 states. In 1999, the US Environmental Pollution Authority filed a lawsuit against it, accusing the company of making major modifications to its coal-fired stations without proper permits or installation of pollution control measures as required by the New Source Review provisions of the Clean Air Act. Eight American states--New York, New Jersey, Massachusetts, Vermont, Connecticut, New Hampshire, Maryland, and Rhode Island--and 13 citizens' groups joined the lawsuit.

The settlement also requires AEP to pay US $15 million in civil penalty and spend US $ 60 million on environmental mitigation projects. It will pay US $36 million to the federal government for restoring eco-sensitive lands. The agreement also calls for a reduction in sulphur dioxide and nitrogen oxide emissions. The move is expected to dramatically improve the ambient air quality of eastern states of the US.