New EPA pollution controls may cost Big Rivers $100M

By Chuck Stinnett

It may eventually cost Big Rivers Electric Corp. an estimated $100 million to install equipment to capture mercury and other toxic emissions to meet new pollution standards announced Wednesday by the U.S. Environmental Protection Agency, utility officials said Thursday.

But that's not all.

"The real impact will be on the O&M" — operations and maintenance — "side of the business," according to Bill Blackburn, Big Rivers' senior vice president of finance and energy services as well as its chief financial officer.

Until the costs of operating and maintaining the new pollution controls are known, "We just can't tell what that rate impact will be" to homes and businesses, Blackburn said.

Big Rivers, a Henderson-based power generation and transmission cooperative, produces power for Kenergy Corp. and other rural co-ops.

It also operates the city of Henderson's Station Two power plant near Sebree.

"I don't think anyone has any firm numbers" on the costs of compliance, Gary Quick, general manager of Henderson Municipal Power and Light, said.

"Everyone recognizes it will have an impact on customers in terms of the costs of utility service," Quick said.

Whatever the costs of equipping Station Two with additional pollution controls, "Those costs will flow to us" as part of HMP&L's share of costs at the power plant, he said.

The new EPA standards will require additional controls at all Big Rivers power plants, excluding its gas turbine generator. Those coal-fired power plants include the Reid and Station Two plants and the Green plant near Sebree, the Coleman power plant in Hancock County and the Wilson generating station in Ohio County.

The likely method of capturing mercury, acid gas, nickel, selenium and cyanide from its coal-fired power plants will be injecting activated carbon in the smokestacks, then using bag houses to capture that material, said Eric Robeson, Big Rivers' vice president of plant construction.

The new "Mercury and Air Toxics Standards," or MATS, is expected to kick in by 2016, Robeson said.

Power plants are the largest remaining source of several toxic air pollutants, according to the EPA.

It said the new standards will prevent up to 11,000 premature deaths, 4,70 heart attacks, 130,000 cases of childhood asthma symptoms and 6,300 cases of acute bronchitis among children each year.

In the meantime, Big Rivers officials are concentrating on complying with another set of new air pollution regulations — the Cross State Air Pollution Rule (or CSAPR, which is pronounced "casper"), which will require further reductions in sulfur dioxide and nitrogen oxides, Robeson said.

Big Rivers estimates that CSAPR compliance will require raising its wholesale electric rates by 2.75 percent 2014. That will translate to approximately a 1.8 percent increase in customers' bills, Blackburn said.