February 23, 2006

Pa. proposes mercury reduction rules

NEW YORK (Reuters) - Pennsylvania Gov. Edward Rendell has
proposed a mercury reduction plan that is stricter than federal
rules but would protect the state's bituminous coal industry.

The proposal, unveiled on Wednesday, would reduce mercury
emissions by 90 percent by 2015. This is nearly 40 percent more
than what federal rules would achieve at that time, while not
discriminating against generating units that burn bituminous

Bituminous coal from Appalachian states in the East has a
higher heat content than sub-bituminous coal from the West.

The U.S. Environmental Protection Agency finalized its
mercury reduction rule for new and existing coal-fired power
plants in May 2005. The rule took effect on July 18.

The EPA's rule calls for utilities to reduce mercury
emissions at coal-fired plants by 70 percent by 2018.

Pennsylvania and several other states, however, have filed
lawsuits challenging the federal rule as insufficiently
protective of public health and biased against certain coal
types including bituminous coal.

"Not only does the federal rule endanger residents by
allowing continued exposure to dangerous levels of mercury in
the environment, but it also sets up unfair market barriers
that would result in a very real and significant economic
dislocation for the Pennsylvania coal industry," Rendell said
in a news release on Wednesday.

The federal rule requires little or no mercury reductions
from units using sub-bituminous coal from the West but places
stringent requirements on bituminous coal from Pennsylvania.


Under its proposal, Pennsylvania would "presume" compliance
with its mercury reduction rules by generating units that burn
100 percent bituminous coal with advanced air control
technologies already mandated by new federal clean air rules.

Owners and operators of utilities in Pennsylvania and
across the nation are examining ways to comply with the U.S.
EPA's new two-phased Clean Air Interstate Rule (CAIR) to reduce
nitrogen oxide (NOX) and sulfur dioxide (SO2) emissions.

To comply with CAIR, these facilities will likely have to
install selective catalytic reduction systems, electrostatic
precipitators and wet scrubbers on their coal-fired units or
switch to lower sulfur coal.

In addition to reducing NOX and SO2, these emission control
systems also reduce mercury.

The governor's proposal would enable utilities to realize
the benefits of mercury reduction through the installation of
CAIR-required control technology without installing specialized
mercury reduction equipment.

Pennsylvania has 36 coal-fired power plants with 78
generating units representing 20,000 megawatts of capacity --
enough to power about 16 million homes.

These units account for about 77 percent of the more than
five tons of mercury emitted into the air from all sources in
the commonwealth, making Pennsylvania second only to Texas in
terms of total mercury emissions and third behind Texas and
Ohio, respectively, for mercury from electric generation.

Mercury is a neurotoxin that damages the brain and nervous
system in children and heart and immune system in adults.

Connecticut, Massachusetts, New Jersey and Wisconsin
already have state-specific mercury reduction plans in place,
while Illinois, Indiana, Maryland, Michigan, Minnesota,
Montana, New Hampshire, New York, North Carolina, Ohio and
Virginia all have regulatory actions or legislation pending.