EPA rules cause major utility changes

Toledo Business Journal, Jan 01, 2006

In March 2005 the federal EPA issued two new rulings that mandate significant reductions in air pollution and mercury pollution. These federal regulatory requirements will have significant impact on utilities in the US. The timeframe for these emission reductions will take place in two phases with the first phase occurring during the next five years and the second phase being completed within the next twelve years.

These new EPA rulings will trigger major investments by FirstEnergy and other utilities in this country for new equipment and technology in order to lower emissions. At its Bay Shore Plant in Oregon, Ohio, Toledo Edison plans to invest over $ 100 million to reduce emissions.

EPA mandates

The Clean Air Interstate Rule (CAIR) issued by the EPA in March 2005 requires a 53 percent reduction of NOx emissions from 2003 levels by 2009. It also requires a 45 percent reduction in S02 emissions from 2003 levels by 2010.

The Clean Air Mercury Rule (CAMR) issued by the EPA in March 2005 requires a reduction of mercury emissions by approximately 20 percent below current levels by 2010. By 2018, this EPA rule mandates mercury reductions at close to 70 percent of current levels.

According to FirstEnergy, the utility has already committed to spending over $1.5 billion on environmental improvements during the next six years at its facilities in Ohio and Pennsylvania.

FirstEnergy recently released a report prepared by an internal task force detailing the utility's efforts to reduce emissions. Toledo Business Journal interviewed Toledo Edison officials concerning specific actions that have been undertaken to reduce emissions from the company's power generation plants including the Bay Shore Plant in Oregon.

Facility Changes

It is first important to understand how FirstEnergy's power generating plants are positioned concerning emissions. During the past three decades, the utility has significantly changed the configuration of its power generation facilities as it relates to issues of emissions and air quality. In the 1970s and 1980s the utility invested heavily in nuclear plants that do not produce greenhouse gases. In 1999, FirstEnergy exchanged over 1,300 MW of coal-based generating capacity for approximately 1,400 MW of generating capacity from Duquesne Light of which almost half was nuclear power.

"With our substantial component of non-emitting nuclear plants, which provided nearly 40 percent of the electricity we produced last year, we believe that we are positioned better than many others to compete in a carbonconstrained world," explained Richard Grigg, FirstEnergy executive vice president and chief operating officer.

Another major action to reconfigure its generating capacity involves the shutdown of inefficient generating units.

According to a report recently released by the utility, during the past three decades, FirstEnergy operating companies have taken 57 older, coal-based boilers out of service. These units, totaling nearly 1,900 MW of capacity, used more than three million tons of coal annually. The utility estimates that 65,000 tons of SO2, 15,600 tons of NOx, and 2.25 million tons of CO2 have been avoided annually by the shutdown of these older boilers.

Another action to reconfigure its generating capacity involves the construction of new cleaner-burning natural gasfired peaking plants between 1999 and 2002. These peaking plants have added 1,155 MW of generating capacity or close to 9 percent of total company capacity.

FirstEnergy has entered into long-term agreements to secure 30 MW of output of wind-generated power with plans to obtain an additional 210 MW of power from this renewable energy source. At present, this would be approximately 2 percent of total generating capacity for the utility.

Technology investments

FirstEnergy currently operates 20 power plants in Ohio, Pennsylvania, Michigan, and New Jersey with a combined generating capacity of 13,387 MW. About 40 percent of this capacity is from non-emitting nuclear plants. During the next five years, FirstEnergy officials indicate that the utility will invest close to $50 million to support relicensing and capacity uprates at its non-emitting generating plants and renewable energy developments, which includes increasing nuclear capacity by 172 MW.

Toledo Business Journal interviewed FirstEnergy's Richard Wilkins to examine future plans at the Davis Besse nuclear plant. The utility plans to invest over $6 million at Davis Besse during the next two years resulting in 23 MW of additional generating capacity.

Over 50 percent of FirstEnergy's generating capacity is still coal-fired. The utility has invested heavily in equipment and technology to reduce emissions from these coal-based facilities.

FirstEnergy has invested $30 million at its Bruce Mansfield power plant, located along the Ohio River in Shippingport, Pennsylvania, in an innovative technology called forced oxidation gypsum (FOG). This process converts calcium sulfate, a byproduct of the scrubber system, into commercial-grade gypsum. Close to half-a-million tons of calcium sulfate is recycled each year by this process at the plant. This directly reduces the amount of waste material that is put in landfills each year. FirstEnergy partnered with National Gypsum on this project. National Gypsum invested $85 million in a drywall plant adjacent to the Mansfield facility in order to take advantage of this low cost source of raw material from the generating plant's scrubber system.