AEP will stop burning coal at the Tanners Creek generating station unit 4 in Indiana, the Muskingum River power plant unit 5 in Ohio and the Big Sandy power plant unit 2 in Kentucky.

Collectively, a total of 2011 megawatts of coal-fired power will be retired as part of the deal.

The settlement with government regulators and environmental groups is the result of a lawsuit originally filed in a federal court in 1999 and is a modification to a prior 2007 settlement.

It comes as another sign of continuing pressure on coal-heavy utilities.

In a statement Sierra Club Beyond Coal campaign Indiana representative Jodi Perras said the agreement was “only the latest sign of progress”

“Across the country, the coal industry faces unprecedented setbacks as its share of electricity generation plummets and the cost of coal continues to skyrocket,” she said.

Other parties in the suit include the US Environmental Protection Agency; eight states including New York, Massachusetts, Connecticut and New Jersey; and 13 citizen groups including the Sierra Club, Natural Resources Defense Council, Ohio Citizen Action, Citizens Action Coalition of Indiana and the Hoosier Environmental Council.

Under the suit AEP agreed to install pollution-curbing dry sorbent injection technology on its Rockport coal-fired power plant in Southern Indiana.

The 2007 agreement required AEP to install flue gas desulfurization technology at the plant – a more expensive technology that results in greater pollution reductions – but the parties agreed to the DSI technology in return for an earlier installation date, the other coal plant retirements and clean energy investments.

AEP will also be required to either retire the two Rockport units in 2025 and 2028 respectively, or to install additional controls designed to achieve removal of at least 98% of the sulfur dioxide created at those units.

Additionally, the agreement commits AEP to developing 50MW of wind or solar power this year and an additional 150MW of wind or solar power in Indiana or Michigan by 2015.

In December 2012, AEP subsidiary Southwestern Electric Power started commercial operation at its $US1.8 billion, 600MW John W Turk Jr power plant in Kentucky.

Turk is the first ultra-supercritical generating unit to go online in the US.

According to company officials, it can generate electricity more efficiently at higher temperatures and needs less coal and produces fewer emissions while generating the same amount of power.

“The Turk plant is yet another example of AEP’s long history of advancing coal-fueled generating technologies,” AEP president and chief executive officer Nicholas Akins said in a December statement.

The retirements of the Tanners Creek, Muskingum River and Big Sandy power plants represent the 140th, 141st and 142nd coal plants to retire or announce their retirement since 2010.

Since January 2010, more than 50,000MW of coal-fired power has been retired or committed for retirement nationwide.