Can coal plants afford EPA's new air-toxics rule?

America has never had a nationwide limit on mercury and other toxic emissions from coal-fired power plants. That's about to change, though, and it will cost companies such as American Electric Power, which runs the Tanners Creek power station here on the Ohio River, billions of dollars.

Tanners Creek represents one side of a split in the American industry. Some industry lobbies and Republicans in the House of Representatives say the nation can't afford the regulation of toxic air pollution from power plants that the plans to release in December. And American Electric Power says it needs more time.

"Why is the EPA in a rush to push regulations that would saddle Americans with higher energy costs and throw even more of us out of work?" the American Coalition for Electricity, a power industry lobby, asks on its website.

There's another side to this story, however, and it's well represented by Brandon Shores, one of Constellation Energy's biggest coal-fired plants (almost 1,300 megawatts), just outside Baltimore on the . Its scrubber has been running since early last year - because it's required by Maryland law.

The Brandon Shores plant will meet the EPA's new air toxics rule by "an ample margin," said Paul Allen, Constellation's senior vice president for corporate affairs.

Constellation broke ground to build the scrubber in June 2007 and finished in September 2009. At the peak of construction, 1,385 people worked on it.

Allen said he'd heard the complaint that the EPA wasn't giving industry enough time.

"That doesn't square with our experience," he said. As with any construction project, there was a trade-off between how much was spent and how fast the work got done. The state deadline made Constellation move fast, and it spent $885 million. It also added 30 jobs to run the pollution-control equipment - and it remains profitable.

Today, the white plumes rising from two new stacks at the plant emit mostly water vapor and carbon dioxide. The scrubber - a large chemical plant next to the plant - cuts 95 percent of the sulfur dioxide, which contributes to soot, and 90 percent of the mercury.

Allen said it was a good time for the power industry to invest in reducing toxic air pollution, because the price of electricity has gone down in recent years as a result of cheaper natural gas supplies from horizontal drilling and hydraulic fracturing.

About 40 percent of the nation's coal plants don't have controls for toxic air pollution.

The EPA says the limits on mercury and other toxics will add jobs, save lives and produce health benefits estimated at up to $140 billion per year. The emissions that will be reduced include mercury and lead, which can permanently reduce the thinking power of children; other metals that can cause cancer; and acid gases, which can damage the lungs.

Slashing toxic air pollution is required under 1990 amendments to the Clean Air Act. After many years of false starts and delays, the EPA is under a court order to put out the rule's final version by Dec. 16. The question is how stringent it will be, and whether companies will get additional time to comply.

American Electric Power is asking to move the overall compliance deadline to 2020.

Here on the Ohio River, about 20 miles west of Cincinnati, barges have been bringing coal to the Tanners Creek plant for 60 years. Photos of the plant in its early decades show emissions flowing from the stacks. Now equipment in the plant catches most of the fly ash and some of the nitrogen oxide, a pollutant that contributes to pollution people can see and sometimes feel - soot and smog.

Yet mercury, arsenic, acid gases and other toxic emissions continue to flow up the stacks, odorless and invisible.

On a mild November afternoon, the plant's biggest unit - 500 megawatts - was running at full capacity. Two of its three smaller units were running as well. Still, no emissions were visible from its two 400-foot stacks.

"People think we're not running, but we are," said Jim Bockstiegel, the energy production superintendent.

The company plans to retire the three small generating units here, dating from 1951 to 1954, by Jan. 1, 2015, and add pollution controls on the largest unit, which dates to 1964. One type of emissions-reduction system would reduce sulfur dioxide and acid gases. Another would cut mercury emissions.

American Electric Power already has invested in giant scrubbers at some of its largest plants under other requirements of the air law. It plans to retire five coal-power plants in all throughout its system. In addition to Tanners Creek, the company plans to build three, possibly four, scrubbers at other plants, to upgrade scrubbers at three more and to add various kinds of emissions-reduction equipment at three other plants. But it wants more time.

In all, American Electric Power expects to spend $6 billion to $8 billion on emissions reduction, CEO Nick Akins said.

"We support what the EPA is trying to do relative to emission reductions at our power plants," Akins said in an interview. "What we are arguing about is the timetable."

Under the EPA's pending rule, companies would get three years, until 2014, with a possible extension to 2015. But Akins said scrubbers took five years to build, including time to get permits. There will be too much demand for labor throughout the power industry to get all the equipment built within three or four years, he said.

American Electric Power wants to stagger its plant retirements and pollution controls until 2020.

"It would be great if we could do all this stuff overnight," Akins said. "We just need a chance to make that progress."

Environmentalists and health advocacy groups say that delay would cost lives. The EPA has estimated that 6,800 to 17,000 lives would be saved in 2016 if plants are complying with its timetable.

Unlike Constellation, American Electric Power operates in states where it needs approval from regulators to recover costs. In areas with no state rules on toxic air pollution, it wouldn't be able to get such regulator approval before the EPA puts out a final rule, company spokesman Pat Hemlepp said. The company also expects rates 10 percent to 35 percent higher in the 11 states it serves as a result of the air toxics rule and other pending coal-related pollution regulations.

And it expects layoffs.

Brian Scragg, the plant manager at Tanners Creek, said the power station operated around the clock with 128 full-time employees and usually about 25 contractors, though sometimes as many as 80. Closing the three smaller units will mean less work for contractors and will require only about 65 full-time jobs. Scragg said he'd try to find jobs at other American Electric Power plants for the workers he'd let go.

On the other hand, the company plans to hire 100 to 200 workers at the peak of construction for the plant's two new pollution-control systems.

John Purtee, a student at the local community college, aspires to work at Tanners Creek. He hopes the pollution controls will make it possible for the plant to run more frequently.

"That would be an awesome thing, because it would give students here jobs," he said.

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(c)2011 the McClatchy Washington Bureau
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