Power firm buys town for $20m

Cheshire is a small town in south-eastern Ohio with some of the usual landmarks: a pizza parlour, a petrol station and a corner shop. Right next door, however, stands a very large power station, which is why its residents are preparing to move out. Not just a few of them – everyone is going.

The exodus has a lot to do with the vapours that rise in high columns from the stacks of the generating plant and in particular the stinging blue clouds that last summer started periodically to descend on the town. But for the 221 residents it has even more to do with money.

In an unprecedented manoeuvre, the owner of the plant, American Electric Power (AEP), has found an all-American solution to the looming threat of lawsuits from the people of Cheshire who have been bothered by the blue clouds. The company is paying $20m (£14m) to buy the town.

Under the deal, Cheshire's 90 homeowners will receive a cheque from the power company equal to roughly three times what their houses would be worth on the open market. In return, they must pack and leave and promise never to sue the company for any kind of damage inflicted on their properties or health.

The prospect of Cheshire becoming a ghost town does not sit well with everyone. "Relocation will not be easy," conceded its mayor, Tome Reese. "It will be sad indeed to see our village disappear. Many residents had realised, however, that selling their homes normally might have been impossible because of the proximity of plant."

Helen Preston, who is 87 and was born in the house she lives in, is among those starting to wonder out loud if she and her neighbours gave in too quickly. "The village just accepted the first offer, grabbed it up. Now people are saying we sold out too cheap."

American Electric is the biggest power company in the US and the coal-burning plant at Cheshire is the largest of its kind in Ohio. Under pressure from federal regulators to reduce pollution there, the company has invested heavily to cut emissions from the plant. It was the latest technology, designed to cut levels of nitrogen oxide, that gave rise to the blue haze problem.

The sulphuric clouds left stains on house fronts and caused residents to complain of burning eyes, headaches, coughing and sores on the lips and inside their mouths. A federal report last year said the fogs could harm residents with asthma but were not in themselves life-threatening.

Pat Hemlepp, a spokesman for AEP, said: "We've become an increasing annoyance, no doubt about it." He said that while the need to pre-empt legal action from the residents "did factor into" the decision to buy the entire town, the company had also been motivated by a need to expand the plant.

Only a few details remain to be settled. When exactly should the exodus be completed and the town of Cheshire declared defunct? And what is to happen to the local school, which lies just beyond the limits of what the company agreed to buy?