One of the nation's dirtiest power plants is shutting down, a move that will scrap a major source of lung- and heart-damaging air pollution in the Chicago area.

Facing a federal complaint, more stringent pollution limits and smaller profit margins, Virginia-based Dominion Resources is writing off the State Line Power Station, an aging coal-fired generator sandwiched between Lake Michigan and the Chicago Skyway at the Illinois-Indiana border.

In a recent conference call with financial analysts, Dominion executives announced they had decided it isn't worth upgrading the plant to comply with the federal Clean Air Act. The company plans to shutter State Line as early as next year and no later than 2014, said Thomas Farrell, Dominion's chief executive.

Built by ComEd in the 1920s and overhauled during the 1950s and '60s, State Line is the latest coal plant shut down by energy companies that just a few years ago were bullish on keeping the nation's oldest and dirtiest generators operating as long as possible.

During the last two years, utilities nationwide have opted to scrap more than 200 coal-fired units that date to the middle of the last century. The retirements reflect a fast-changing climate for electricity generation in the U.S. and promise cleaner air in the Midwest, Northeast and South.

"We're seeing a wave of decisions from companies that no longer can afford to keep passing the health costs of their pollution on to the public," said Howard Learner, president of the Environmental Law and Policy Center. "These old clunkers are finally going away."

In many cases, coal plants are being replaced in the nation's energy mix by wind turbines, natural gas plants and other cleaner sources of energy. Illinois alone added 500 megawatts of pollution-free wind power in 2010, about the same amount generated by the 515-megawatt State Line plant.

The Tribune reported in September that State Line had largely gone unnoticed and untouched during a decades-long effort to transform Chicago's smog-choked history.

Surrounded by the city on two sides at the end of 103rd Street, the plant emits more lung-damaging nitrogen oxide than two other former ComEd plants in Chicago, and churns more smog-forming sulfur dioxide and toxic mercury into the air than either plant.

Only a dozen other coal plants nationwide emit more nitrogen oxide in relation to the amount of electricity generated, according to a Tribune analysis of federal data.

Illinois officials have documented that air pollution drifting from northwest Indiana is a big contributor to the Chicago area's dirty air problems. But State Line's address in Hammond, Ind., made it impossible for Illinois officials to target it for enforcement.

Moreover, when Congress passed the Clean Air Act in 1970, federal lawmakers exempted dozens of old plants like State Line from the toughest provisions of the law after utilities claimed they wouldn't be running much longer. Dominion bought the plant in 2002 amid renewed interest in dirty-but-plentiful coal to generate electricity.

It wasn't until 2009 that the U.S. Environmental Protection Agency accused ComEd and Dominion of repeatedly violating federal soot limits and upgrading State Line without installing pollution controls required by federal law. More recently, the Obama administration announced new rules that impose more stringent limits on sulfur dioxide, nitrogen oxide, mercury and other toxic metals.

Dominion spokesman Dan Genest said the company recently decided it would withhold State Line from an upcoming auction for long-term electricity contracts. If it had included the plant in its bid, Genest said, the company would have needed to spend several hundred million dollars on pollution controls.

"At this point there is no reason to bid into a market with a plant we aren't going to spend money on," he said.

The decision means about 120 State Line workers will lose their jobs. The company will attempt to relocate employees to other plants, Genest said.

A combination of factors is driving the steady move away from old coal plants. Natural gas is less expensive, state laws are requiring greater reliance on renewable energy, anti-pollution rules are getting tougher, and profit margins are shrinking.

The changing landscape includes a deal between Illinois regulators and Midwest Generation, owner of plants in Chicago's Pilsen and Little Village neighborhoods and in suburban Joliet, Romeoville and Waukegan. Company executives plan to clean up or shut down the former ComEd plants by 2018, though in recent financial documents they signaled the company might delay decisions "for the maximum time available."

With the coal plant shutdowns already announced during the last two years, sulfur dioxide emissions nationwide will drop by 449,000 tons and nitrogen oxide emissions by 148,000 tons, according to federal records compiled by the Sierra Club. The plant retirements also will reduce heat-trapping carbon dioxide emissions by more than 93 million tons, equivalent to taking more than 16 million cars off the nation's highways.

"Companies increasingly are going to be making decisions like this," said Bruce Nilles, the Sierra Club's deputy conservation director. "They're cleaning up or shutting down, something that should have been done at least a decade ago."

mhawthorne@tribune.com

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