AP News

Arch Coal unit to pay more in fines for violations


LOUISVILLE, Ky. (AP) — A court filing says Kentucky officials, environmental groups and an Arch Coal Inc. unit have agreed on the amount the company should pay for Clean Water Act violations at its eastern Kentucky mines.

The document filed Monday in Franklin County says under a proposed settlement, International Coal Group would pay $335,000 to a program that eliminates straight pipe sewers in eastern Kentucky and another $240,000 to help fund water quality studies. The $575,000 settlement has not been finalized.

The total amount is an increase from the $350,000 settlement ICG, a subsidiary of St. Louis-based Arch Coal, reached with Kentucky in 2010. Environmental groups protested the amount at the time, saying it was too low for thousands of water quality violations. The groups later sued and won a bid to intervene in the case.

Bruce Scott, commissioner of Kentucky's Department of Environmental Protection, said Thursday the proposed settlement is higher because regulators added violations that occurred between 2010 and this year.

"These are substantial penalties, and that's not a small dollar amount, certainly in the eyes of most people," Scott said.

Scott said civil penalties leveled by his department typically go to the Kentucky Land Heritage Trust Fund, but in this case the money will be directed to eastern Kentucky "where the issues and concerns are."

A second mining company, Frasure Creek, which was part of the 2010 settlement with the state, has not yet reached an agreement. Scott said the company has financial troubles and is mired in several lawsuits.

A spokeswoman for Arch Coal declined to comment Thursday because the settlement is not finalized.

The environmental groups also declined to comment while the case is pending.

Appalachian Voices of Boone, N.C., New York-based Waterkeeper Alliance and Kentucky Riverkeepers were allowed to intervene in the case last year and had been in mediation talks with state officials and the coal companies for about a year.

The groups had alleged companies falsified water quality reports that were submitted to the state and said they found more than 2,700 violations that would have totaled tens of millions of dollars in fines. When the state announced a $660,000 total settlement with ICG and Frasure Creek in December 2010, the groups moved to intervene.

Scott said the proposed settlement includes a provision that environmental groups pushed for that would set up an agreement with a third party to audit ICG's water quality monitoring and its reporting methods to the state.

The environmental groups also would have their attorney fees paid under the settlement.

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Follow Dylan Lovan on Twitter at http://twitter.com/dylanlovan


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