American Electric Power agreed late Friday in federal court in Columbus, Ohio, to retire or switch to natural gas two coal-burning units at power plants in Ohio and Indiana by the end of 2015.
In exchange, AEP changed the conditions of an earlier court settlement and will use equipment at another Indiana power plant that will not reduce sulfur dioxide as much.
Cheap natural gas and environmental regulations are causing utilities to shut down coal-fired power plants. AEP had previously planned to stop coal at one unit.
Environmentalists said the deal will ensure the company doesn't change its mind.