Xcel Energy Inc. has agreed to curb smokestack emissions at its giant coal-burning Sherco power plant in Becker, Minn., to settle a lawsuit alleging they caused haze over national parks in Michigan and Minnesota.

The settlement, which must be approved by a federal judge, would end a lawsuit filed in 2012 by six environmental groups against the U.S. Environmental Protection Agency. The suit sought to enforce rules under the U.S. Clean Air Act to protect visibility in Voyageurs National Park in Minnesota and Isle Royale National Park in Michigan.

"There are going to be visibility improvements," said Kevin Reuther, legal director for the Minnesota Center for Environmental Advocacy, a St. Paul environmental law firm that was part of the lawsuit.

Xcel, which intervened in the lawsuit, said a recent $50 million upgrade to controls known as scrubbers on two older generating units, and planned modifications to a newer generator will reduce the Sherco plant's sulfur dioxide (SO2) emissions by 50 percent by 2017.

"This leverages off an investment we have made at the Sherco facility that has recently been proven to achieve significant SO2 reductions," Jack Ihle, director of environmental policy for Xcel, said in an interview. "So we are using that performance to reach an agreement with the parties to reduce the emissions overall."

The National Parks Conservation Association and five other groups filed the lawsuit in U.S. District Court in Minnesota, citing a section of the federal Clean Air Act with special protections for national parks. Haze is mainly a visibility problem, obscuring pristine vistas in parks and wilderness that Congress wanted to preserve.

But Reuther said sulfur dioxide also plays a role in the formation of fine dusts that pose a risk to human health.

The U.S. Interior Department, parent agency of the National Park Service, declared in 2009 that Sherco units 1 and 2 were the source of air pollution affecting the parks. The EPA and Xcel have disputed that finding, and Ihle said Xcel doesn't concede its power plant is to blame.

But the proposed settlement says the Interior Department agrees that Xcel's efforts and other regional haze reduction steps "provide an outcome that addresses the visibility concerns." The proposed settlement asks for a stay in the litigation, but leaves open the door for parties to argue over who pays the legal fees.

Ihle said Xcel's steps to reduce sulfur dioxide on the Sherco 3 generator won't require any capital investment, describing them as operational improvements. That unit is partly owned by the Southern Minnesota Municipal Power Agency.

Other environmental groups in the lawsuit are the Voyageurs National Park Association, Fresh Energy, the Sierra Club and Friends of the Boundary Waters. The groups contend that visi­bility in the Boundary Waters Canoe Area Wilderness also is hurt by Sherco smokestack emissions.

Reuther said his group's goal is for Xcel to retire Sherco 1 and 2. That option is being considered in a 15-year plan before the state Public Utilities Commission. Xcel has proposed keeping the plants, running them less and investing in more solar and wind energy.

"Minnesotans can celebrate this agreement as a smart decision that reduces harmful air pollution," said Michelle Rosier of the Sierra Club's Beyond Coal campaign. "But Minnesotans also want to see a transition plan beyond coal that makes room for Minnesota wind, solar and efficiency."