SAN FRANCISCO, Calif. -

Costco Wholesale Corporation will pay $335,000 in penalties for federal Clean Air Acts and must make improvements at 274 stores under a settlement with the U.S. Environmental Protection Agency.

The EPA says the large retailer has agreed to cut its emissions of ozone-depleting and greenhouse gases from leaking refrigeration equipment at more than half of its stores nationwide. The trailer must fix refrigerant leaks and make other improvements that the EPA estimates could cost up to $2 million over the next three years.

"Because of this settlement, Costco will cut its future greenhouse gas emissions equivalent to nearly 200 million pounds of carbon dioxide, supporting our efforts to cut greenhouse gases nationwide,” Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest, said in a statement. “Investing in better equipment and maintenance to stop wasteful refrigerant leaks is good for our environment and good for business.”

Federal prosecutors said Costco violated the Clean Air Act by failing to promptly repair refrigeration equipment leaks of the refrigerant R-22, a powerful ozone-depleting hydrochlorofluorocarbon, between 2004 and 2007. Costco also failed to keep adequate records of the servicing of its refrigeration equipment to prevent harmful leaks.

Under the terms of the settlement, Costco must retrofit or replace commercial refrigeration equipment at 30 of its stores to reduce ozone-depleting and greenhouse gas emissions. Costco must also implement a refrigerant management system to prevent and repair coolant leaks and reduce its corporate-wide average leak rate at least 20 percent by 2017. In addition, Costco will install and operate environmentally-friendly glycol refrigeration systems and centrally monitored refrigerant leak detection systems at all new stores.

Costco, headquarted in Issaquah, Wash., operates 466 stores in the U.S. The settlement applies to 67 stores in California.

The full text of the proposed settlement can be viewed here.