Ohio utility to reduce air pollution

HARRISBURG, PENNSYLVANIA - An Ohio-based electric utility will install upgraded pollution-control equipment at a large coal-burning power plant that should result in a major reduction in air pollution that drifts into western and central Pennsylvania.

The settlement of a long-standing lawsuit regarding air pollution from FirstEnergy Corp.'s W.H. Sammis plant in Stratton, Ohio, was announced on March 19.

Other parties to the settlement are the Environmental Protection Agency, U.S. Department of Justice and the states of New York, New Jersey and Connecticut. The agreement must still be approved by the federal judge who heard the underlying lawsuit.

John Hanger, director of the Penn Future environmental public policy group in Harrisburg, hailed the settlement.

"Overall, it's good news for Pennsylvania," he said. "It's going to remove one of the major sources of out-of-state pollution, especially in western and central Pennsylvania. There will be a significant public health gain for those reductions."

Pennsylvania had declined to join the lawsuit, which was filed during the Ridge/Schweiker administration, even though the air pollution passed over Pennsylvania on its way to those other states. The Rendell administration has joined other lawsuits on interstate air-pollution issues.

State Department of Environmental Protection Secretary Kathleen McGinty called the settlement "long awaited and much needed."

FirstEnergy spokesman Ralph DiNicola said the company is pleased to reach a settlement that would allow it to continue to use the 2,230-megawatt Sammis plant to produce electricity.

"We have been trying to reach an agreement for a number of years," he said. "We've been prepared to reduce emissions to the environment from that plant for quite a while, but we couldn't do it unilaterally."

The agreement calls for an overall reduction of 212,000 tons of sulfur dioxide and nitrogen oxide from all of FirstEnergy's coal- burning power plants. Most of that will come from Sammis, which will see its overall sulfur dioxide emissions reduced by 82 percent and its overall nitrogen oxides by 71 percent. The work must be completed by 2012 and is expected to cost $1.1 billion.

FirstEnergy also will pay an $8.5 million civil penalty to the Department of Justice and contribute up to $25 million over five years to support environmentally beneficial projects.

Settlement talks began among the parties in 2003 after a federal judge in Ohio ruled against FirstEnergy in the lawsuit brought by the EPA and the states. The penalty phase of the trial had been delayed while settlement talks went on, according to a report yesterday in The Wall Street Journal.

At issue in the trial was whether the federal government's New Source Review regulations applied to the Sammis plant.

New Source Review requires a utility to upgrade a power plant to the most modern and effective pollution-control equipment if it spends more than a certain amount of money to extend the life of the plant.

Electricity companies like FirstEnergy argued they were only doing "routine maintenance" and should not have to install scrubbers, which are considered the most effective technology for removing coal-emission pollutants. They favored the Bush administration's "Clear Skies" initiative, which would have scrapped New Source Review and replaced it with a cheaper, longer-term pollution-control program.

But the Clear Skies program ran into trouble in the Senate. A key Senate committee on March 9 deadlocked 8-8 on the legislation, preventing the bill from moving to the Senate floor. While the Senate leadership could bring the bill to the floor by other means, opponents would have a much easier time of killing it through filibuster or other legislative maneuver.

Hanger believes there is a "clear link" between the March 9 action by the Senate and the settlement announcements by FirstEnergy and some other utilities around the country. He said utilities such as FirstEnergy were waiting to see if Congress would "bail them out" and let them escape the New Source Review regulations.

DiNicola said: "The link is we wanted certainty in that what we did in the settlement wouldn't be futile in meeting whatever additional requirements came down the road. That what we are doing here would contribute to meeting the next round."

He said two units at the Sammis plant will be equipped with scrubbers, which remove nearly all sulfur dioxide and nitrogen oxide emissions. Those units, which are the plant's largest, will see reductions of 95 percent in sulfur dioxide and 90 percent in nitrogen oxide.

Because the Sammis plant is between a 500-foot bluff and a four- lane highway that borders the Ohio River, space doesn't exist to build scrubbers on Units 3, 4, 5, 6 and 7 at Sammis, DiNicola said. Those units will be equipped with other pollution-control equipment that reduces emissions by 50 percent for sulfur dioxide and 70 percent for nitrogen oxide.

In return for that concession, FirstEnergy agreed to install additional pollution-control equipment or use lower-sulfur coal at other plants, including the Bruce Mansfield plant in Shippingport. In effect, FirstEnergy will be removing the additional Sammis pollution from the emissions of those other plants.

As for who will pay the $1.1 billion price tag, DiNicola said caps on the retail price of residential electricity in both Ohio and Pennsylvania prevent FirstEnergy from raising rates to recover the cost of the pollution-control equipment. He said the cost would be rolled into the price of wholesale electricity the company sells on the open market.

Hanger cautioned that the air-pollution job is not done, and some coal-burning power plants in western Pennsylvania are significant polluters. Penn Future is suing Allegheny Energy of Hagerstown, Md., over alleged pollution from its Hatfield Ferry plant in Greene County.

Last month, PPL Corp. agreed to spend $630 million on scrubbers at two power plants, including one at the Brunner Island plant near York Haven in York County. William F. Hecht, PPL chairman and CEO, had said it made more sense to spend money on scrubbers than litigation.