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Great Lakes Article:

Utilities criticize mercury plan

Proposal to reduce emissions would drive up rates, officials say

Article courtesy of the Milwaukee Journal Sentinel

Sept. 5 2001

A state proposal to require that utilities reduce mercury emissions from coal-burning power plants would drive up electric rates 25%, a spokesman for a Green Bay-based utility says.

The proposed rule would cut mercury emissions 90% over 15 years. Utilities would submit compliance plans to cut mercury emissions 30% after five years and 50% after 10 years. The proposal will be discussed at a series of public meetings that will begin today in Eau Claire and continue through the end of the month.

Ed Newman, environmental director of Wisconsin Public Service Corp., said the utility wants to negotiate a more attainable goal of 10% over five years and 40% over 10 years. The alternative - to shutter up to 13 Wisconsin coal plants in favor of more environmentally friendly natural gas plants - would be an expensive proposition for utilities, Newman said.

"The natural gas plants are much more expensive," Newman said. "It's like investing in the stock market - you don't want to have all your eggs in one basket. We'd be vulnerable to the price volatility of natural gas and could be put in a position very similar to that of California. We'd like to maintain the option of having a diverse fuel mix."

Chris Schoenherr, a spokesman for Alliant Energy Corp. in Madison, estimated that reducing mercury emissions 30% would cost the utility $35 million to $47 million and an additional $15 million to $29 million in increased operating and maintenance costs.

"There are a number of aspects of the rule that are troubling," said Kristine Krause, vice president-environmental for Wisconsin Energy Corp. "We certainly agree with WPS that the rule as proposed will cause significant rate increases."

But Keith Reopelle, executive director of Wisconsin's Environmental Decade, a Madison-based environmental advocacy group, said the utilities' cost estimates were inflated.

"There is no reason why utilities would need to close down any coal plants," Reopelle said. "The rules were written with the intention that they would comply by installing control technologies on existing plants, not building new ones."

In Wisconsin, 53% of all electricity is supplied by coal plants.

In addition to the rate increases, the utilities also fear that mercury reduction technologies aren't advanced enough to reach the 15-year, 90% goal.

"That's true," Reopelle said, "because there isn't a market and there never will be until there is a requirement to do that.

"These kinds of technologies are never commercially available until there's a market for it. Why would there be? If there is no market, why would they build them?"

Appeared in the Milwaukee Journal Sentinel on Sept. 5, 2001.
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