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FirstEnergy Gets Funds for Cleanup: $1.3 Billion in State-Issued Bonds to Help Upgrade Two Coal Plants

Posted on: Wednesday, 12 April 2006, 09:00 CDT

By Bob Downing, The Akron Beacon Journal, Ohio

Apr. 12--Akron's FirstEnergy Corp. will use state-issued bonds to fund nearly $1.3 billion in clean-air projects at two of its coal-burning power plants in Ohio.

The Ohio Air Quality Development Authority on Tuesday approved financing $1.1 billion in improvements to the W.H. Sammis Power Plant in Jefferson County.

That will include steps to remove the sulfur dioxide that creates acid rain from the emissions from the seven boilers at the Sammis plant, one of FirstEnergy's largest coal-fired plants and biggest polluters.

The project calls for construction of three scrubber/absorber towers, a new common exhaust stack, a common limestone preparation facility and a new sludge storage facility.

It will require handling sludge from the new scrubbers. The sludge will be pumped and stored in a disposal facility to be built three miles west of the plant.

The company intends to have the scrubbers operating by the end of 2010.

The state agency will issue project revenue bonds for the $1.1 billion that the company will then repay, said Mark Shanahan, director of the state authority.

Some of the bonds will qualify for lower interest payments by FirstEnergy, he said.

The Sammis project is the largest ever funded by his agency, Shanahan said.

The previous high was about $800 million in 1977 to Ohio Edison Co. (now part of FirstEnergy) for capturing soot emissions from the Sammis plant, he said.

It is in FirstEnergy's interest to use lower-cost financing when available, said company spokesman Mark Durbin.

In March 2005, the Akron utility agreed to spend $1.1 billion to settle a federal clean-air lawsuit against the Sammis plant.

In the settlement, FirstEnergy agreed to slash emissions of sulfur dioxide and nitrogen oxide by nearly 80 percent by 2012 with the installation of anti-pollution equipment.

Sulfur dioxide contributes to health problems and acid rain; nitrogen oxide causes ozone and health problems.

What FirstEnergy agreed to do at Sammis is similar to what it would have been required to do under the new federal Clean Air Interstate Rules.

Company officials have said the Sammis work will affect customer rates in 2009, at the earliest.

In 2003, Sammis was No. 2 in the country for sulfur dioxide emissions and No. 5 for nitrogen oxide. The plant released 164,398 tons of sulfur dioxide and 40,431 tons of nitrogen oxide.

The state also approved $155 million to help FirstEnergy install a new electro-catalytic oxidation system on one boiler at the Bay Shore plant near Toledo.

That system is designed to reduce sulfur dioxide and nitrogen oxide emissions in addition to mercury, tiny soot, toxic gases and heavy metals.

The technology has cost nearly $80 million to develop in the last eight years, with FirstEnergy contributing $32 million and the state of Ohio another $10 million. It has been tested at FirstEnergy's R.E. Burger Power Plant in Belmont County.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com

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Copyright (c) 2006, The Akron Beacon Journal, Ohio

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Source: Akron Beacon Journal (Akron, Ohio)

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