$337 Million Cleans Up Two Power Plants

By Cat Lazaroff

WASHINGTON, DC, January 24, 2002 (ENS) - PSEG Power, one of the nation's largest independent power producers, has agreed to spend more than $337 million to install state of the art pollution controls on two of its New Jersey power plants. The agreement settles allegations that the utility company expanded the capacity of the two coal fired power plants without upgrading their emissions control equipment.

The new equipment which PSEG's Fossil fuels division will eliminate the majority of the sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from the Mercer and Hudson power plants in Jersey City and Hamilton, New Jersey.

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EPA Administrator Christie Whitman (Photo courtesy EPA)
"This agreement is an excellent example of how effective federal and state partnerships in enforcement actions can greatly benefit the environment and assure public health protection," said U.S. Environmental Protection Agency (EPA) Administrator Christie Todd Whitman. "Today's agreement will improve the air quality for those who live around the Mercer and Hudson plants."

The combined effect of the pollution controls will reduce the company's SO2 emissions by 90 percent and its NOx emissions by more than 80 percent. Overall reductions will be at least 36,000 tons of SO2 and 18,000 tons of NOx per year.

Sulfur dioxide and NOx are significant contributors to acid rain, and NOx also increases low level ozone, the primary component of smog, while fine particulate matter contributes to haze. All of these pollutants cause severe respiratory problems and can worsen cases of childhood asthma.

The decreases mandated by the settlement with PSEG Fossil represent 32 percent of all the SO2 and 20 percent of all the NOx emitted from stationary sources in New Jersey, and 19 percent of all the SO2 and five percent of all the NOx from all sources in the state, including cars and trucks.

PSEG Fossil will install flue gas desulfurization devices, also called scrubbers, to remove SO2 from its power plant emissions. The new dry scrubbers are also expected to reduce mercury emissions by up to 90 percent.

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Coal burning power plants account for much of the air pollution from stationary sources in the U.S. (Photo by Carole Swinehart, courtesy Michigan Sea Extension)
New selective catalytic reduction systems will control NOx emissions at the plants. The company will upgrade its existing control devices for particulate matter at both plants, and will install one additional particulate control device that will eliminate more than 1,000 tons per year of that pollutant.

In addition, the company will retire pollution emission allowances and credits that PSEG Fossil or others could use to emit additional pollution into the environment.

Attorney General John Ashcroft said the settlement demonstrates the Justice Department's intention to continue prosecuting violations of the new source review provisions of the Clean Air Act, which require utilities and factories to obtain permits and install new emissions controls when they expand or modify their older power plants.

The EPA, the Justice Department and the state of New Jersey had charged PSEG Fossil with modifying the Hudson and Mercer plants without installing necessary pollution controls.

Earlier this month, the Justice Department announced it would continue to pursue cases against power plants and other facilities whose initial exemptions from the Clean Air Act may have been invalidated by upgrades. The agency had been reviewing the legality of such cases under a directive from Vice President Richard Cheney's energy task force.

"This important settlement reflects our continuing commitment to enforce vigorously the Clean Air Act to protect public health and the environment," Ashcroft said.

Today's agreement is the second such settlement under the power plants enforcement program. The first settlement was with Tampa Electric Company in January 2001, and the EPA has also entered into agreements in principle with Cinergy and Virginia Electric Power Company.

"This agreement sets the bar for future new source review cleanup settlements," said Frank O'Donnell, executive director of the nonprofit Clean Air Trust. "It shows why we need to keep and enforce a strong new source review program to promote strict pollution controls at individual plants."

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PSEG's corporate headquarters in Newark, New Jersey (Photo courtesy of PSEG)
But O'Donnell noted that the EPA, under pressure from the Department of Energy and some power companies and other industries, is moving to weaken new source review requirements. Yesterday, state and local air pollution regulators warned the EPA that weakening new source review could let many polluters off the hook, "resulting in unchecked emission increases that will degrade our air quality and endanger public health."

PSEG Power did not admit any wrongdoing, and maintains that its maintenance activities at the two New Jersey plants did not amount to upgrades which required new permits or pollution controls. The utility opted to settle the case and devote its resources to improving its environmental performance, rather than to costly litigation, the company said today in a release.

"PSEG negotiated in good faith and demonstrated a willingness to put litigation considerations aside and to act quickly to improve the health of New Jersey's citizens and the quality of air they breathe. We hope other utilities follow PSEG's lead," said Tom Sansonetti, assistant attorney general for the Justice Department's Environment and Natural Resources Division.

In addition to the pollution reductions secured by the settlement, PSEG Fossil has agreed to pay a civil penalty of $1.4 million and to spend at least $6 million on three additional projects that will partially offset the impact of past emissions. The utility will take steps to reduce its emissions of carbon dioxide by 15 percent, contribute to New Jersey's ongoing efforts to recover and use methane gas from landfills, and develop technology to reduce and monitor emissions of mercury from its plants.

PSEG Fossil will perform its upgrades in stages, installing the particulate matter controls in 2002, the new NOx controls in 2004, and the new SO2 scrubbers in 2006. All work will be complete by 2012.

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PSEG remains committed to burning coal, but says it aims to make the process cleaner (Photo by David Parsons courtesy National Renewable Energy Lab)
"We are investing in advanced emissions control technologies that will deliver significant results in a reasonable time frame," said Frank Cassidy, PSEG Power president and chief operating officer. Cassidy noted that PSEG Power supports proposals for nationwide legislation that would limit emissions of foud power plant pollutants - NOx, SO2, particulate matter and carbon dioxide - and is already taking steps to reduce its emissions of each of these pollutants.

"We are leading where our industry should follow if we are to help this nation meet the unrealized goals of the Clean Air Act,'' Cassidy added.

Cassidy said the improvements at Hudson and Mercer will also help maintain fuel diversity for Power's electric generating fleet and support the reliability of regional electric supply.

"Coal has been, and will continue to be, the backbone of affordable energy in this country," Cassidy said. "But technologies exist to burn coal cleanly. Our investment in these technologies is an investment in the future of coal."