Alcoa Announces Clean Air Act Agreement With Government and Citizen Groups.

Business Editors

ROCKDALE, Texas--(BUSINESS WIRE)--April 9, 2003

Alcoa, the U.S. Department of Justice, the Environmental Protection Agency, the State of Texas, and citizens groups have announced a Clean Air Act agreement under which the company will further reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from its Rockdale Operations lignite-fired power generating units near Rockdale Texas.

Previously, Alcoa voluntarily committed to reduce NOx by approximately 50% and SO2 by approximately 90%. These reductions are included in the Texas Voluntary Emission Reduction Program permit for the units, issued by the State in 2002. This settlement is an extension of that commitment whereby Alcoa will reduce NOx emissions by approximately 90% and SO2 emissions by approximately 95% or shut the units down. Alcoa recently completed an emission reduction project that has already reduced NOx from its power facilities by approximately 50%.

The total effect of Alcoa's previous and latest commitments would reduce the company's emissions of SO2 by at least 52,000 tons per year and emissions of NOx by at least 17,000 tons per year. The settlement, lodged in the United States District Court in Austin, resolves all federal and state government and citizen suit allegations. These allegations suggested that the Rockdale power facilities were operating without the appropriate "Prevention of Significant Deterioration" permits because they were modified without installing necessary pollution controls.

Alcoa is agreeing to these obligations as part of its overall commitment to improve the environment and to avoid the costs and uncertainties of a lengthy litigation process. The government, Alcoa, and citizens consent to entry of the settlement without trial of any issue and without any admission of fact or law and without any admission of the violations alleged in the complaint.

Under the agreement, Alcoa will have up to 12 months to decide whether to:

  (1) Install clean coal technology - circulating fluidized bed
      boilers to replace the existing boilers;
  (2) Install best available control technology on the existing
      units; or
  (3) Permanently shut down the existing units without replacements.

In addition to the emission reductions agreed to in the settlement, Alcoa has also agreed to pay $1.5 million and to spend $2.5 million on additional environmental mitigation projects that include $1.75 million for land and habitat preservation and $750,000 for school bus emission reductions in the local area.

The settlement is subject to a 30-day public comment period and final court approval.

Note to Editors: In the text above, the "2" in "SO2" and the "x" in "NOx" should be subscript.