Consumers to foot expensive SCR retrofit bill

Cambridge, Mass.

Consumers in 21 eastern states could be facing a $7-12 billion bite out of their wallets to ensure that coal-powered electric utility plants substantially reduce their NOx emissions by 2003, according to a new study by Fuld & Co., a research and consulting firm.

The study concludes that the Environmental Protection Agency (EPA) ruling requiring state implementation plans (SIPs) by the end of this year will result in power plants rushing to install expensive technology, as there will be no time to explore more cost effective remedies.

“The challenge faced by the industry is that, while many people seek environmental protection, few-including legislators-want to pay more for the energy we use to heat and light our homes, fuel our vehicles or power our factories,” said Ravi Krishnan, associate director of public utilities practice for Fuld & Co. and author of the study.

The ruling was originally handed down in 1998 and then reaffirmed by the federal D.C. Court of Appeals in March of this year. It will require an 85 percent reduction of NOx emissions from 1990 levels by 2003 (Phase I). Over the past 20 years, the U.S. has reduced NOx emissions by only 13 percent compared to a 60 percent reduction by the Czech Republic, 38 percent by the U.K. and 31 percent by Germany.

Phase I of the SIPs is due by the 28th of this month, and, at press time, only Massachusetts, Connecticut, Rhode Island and Ney Jersey have submitted their plans. According to the Fuld & Co. study on emission control technology in the region, 100,000 MW of capacity and 140 plants are potential candidates for selective catalytic reduction (SCR). Phase II plans are to be submitted by December and will focus on stationary internal combustion engines and SIPs from Georgia and Missouri.

“Capital cost for an SCR can range from $51 per kW for an easy installation at an 800 MW unit to $121 per kW for a difficult 200 MW unit,” wrote Krishnan.

“Such cleanup costs can have a significant effect on cost of generation at a power plant and is likely to cause an increase in electricity rates,” he finished.

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