AGL Macquarie has been fined $15,000 for excessive coal ash emissions from Liddell Power Station.
Environment Protection Authority director of regulatory operations Adam Gilligan said the authority received notification from the company and the community regarding the emissions coming from the station earlier this year.
"The EPA received reports of excess dust being generated, from the ash dam, which is a breach of the environment protection licence for the power station."
Mr Gilligan said that Liddell had allegedly breached their licence by failing to ensure that operations and activities were being carried out in a manner that minimised dust emissions.
"Managing dust from large operations such as Liddell Power Station is a key issue for the community, and the EPA considers any non-compliance as a serious matter."
AGL Macquarie flooded the ash dam to prevent further dust emissions during the hot and dry conditions being experienced at the time.
An AGL Macquarie spokesman said the company took iits regulatory and environmental responsibilities seriously and was committed to complying with its licence conditions.
He said AGL Macquaire had spent more than $1.3 million on ash dam dust control, including aerial application of a specialist dust suppressant, during the past two financial years.
"In the days preceding the event, planned aerial application of dust suppressant was delayed by heavy rainfall. Subsequent high wind conditions and corresponding safety concerns further delayed aerial suppression activities," the spokesman said.
Several hot, dry and windy days then resulted in the release of dust from the dam surface.
"When the release was discovered AGL Macquarie notified the EPA, and a response plan was activated," he said.
"Dust suppression activities resumed in the following days, when weather conditions allowed this to be done safely.
"We are committed to continual improvement of our environmental performance and are reviewing our processes to ensure we remain compliant."