BILLINGS, Mont. (AP) - Citing continuing air quality problems, the state has issue a third violation letter to the new Hardin Generating Station power plant and is pursuing enforcement action.

The coal-fired plant exceeded hourly sulfur dioxide limits 98 times during the first quarter of 2007, the Montana Department of Environmental Quality said in a notice to plant managers. Based on the number and extent of violations, the company was not using good pollution control practices as required by its permit, said DEQ air quality specialist Hoby Rash in a letter to Colorado Energy Management LLC, which manages the plant.

The 116-megawatt plant near Hardin began operations in April 2006, becoming the state's first new coal-fired plant in 20 years. The plant was built by subsidiaries of the Bismarck,N.D.-based MDU Resources Group Inc.

In a response to the DEQ last week, Steven Finley, the environmental manager for Colorado Energy, said the company believes it has properly maintained the plant using good pollution control practices and had gone "above and beyond the normal practice" to reduce pollution and improve operations. Formal enforcement was not necessary, Finley wrote.

"Obviously, the department feels differently," Larry Alheim, the DEQ's enforcement specialist, said. Enforcement is necessary because of the nature and number of violations, he said. "That's why we're going ahead."

The DEQ intends to send the company a penalty letter this week, Alheim said. The penalty calculation will include violations noted in the third and fourth quarters of 2006 as well as the first quarter of 2007.

The DEQ will consider the company's efforts to fix the pollution problems as it resolves the enforcement action, Alheim said.

Mark Hanson, a spokesman for MDU Resources, said the problems are occurring during startups and shutdowns of the plant. "During normal operations, the plant is well within the air quality levels," he said.

In addition to making adjustments at the plant, the company is seeking to change its air quality permit to allow for short-term increases in sulfur dioxide pollution during startup and shutdown, Hanson said.

The company is working with the DEQ on amending its permit and has to submit an additional report before the agency can study whether the proposed change would violate air quality standards, Hanson said.