EPA issues mercury-reduction standards for power plants

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By Kristi E. Swartz

The Atlanta Journal-Constitution

Environmental and health care advocates say stringent new power plant emission rules released Wednesday will save thousands of lives, but utilities and politicians warn that the cost will come in the form of lost jobs -- and higher electricity bills.

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Georgia Power plans to retire two smaller, coal-fueled generating units at Plant McDonough near Smyrna, Georgia and replace them with three 840-megawatt combined cycle natural gas units, which will provide a larger and cleaner source of energy close to the Metro Atlanta area.

Bob Andres, bandres@ajc.com Georgia Power plans to retire two smaller, coal-fueled generating units at Plant McDonough near Smyrna, Georgia and replace them with three 840-megawatt combined cycle natural gas units, which will provide a larger and cleaner source of energy close to the Metro Atlanta area.

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The U.S. Environmental Protection Agency issued rules that target mercury, acid gases and other emissions that come primarily from 1,400 coal- and oil-fired power units nationwide. The Southern Co., the parent of Georgia Power, said complying with the new rules could cost it between $13 billion and $18 billion by 2020, driving up electricity bills by 10 percent to 20 percent, although that could take years.

EPA Administrator Lisa Jackson said the rules are the agency’s biggest clean air action yet. Industry supporters say the presumed benefits do not outweigh the costs.

“This is the most expensive and the biggest intervention to the power sector and the job market,” said Scott Segal, director of the Electric Reliability Coordinating Council, a coalition of companies including Atlanta-based Southern.

Southern officials said the company may have to add large pollution-curbing equipment to 60 percent of the coal-fired units across its four-state territory, based upon a preliminary assessment of the mercury and other EPA rules issued this year.

In documents filed in August, Georgia Power said it may have to close some coal units and add pollution equipment or switch to another fuel, likely natural gas, at others. The work could cost the utility between $5 billion and $7 billion. Customers would not see their bills increase to accommodate those costs until Georgia Power has spent money closing power plants or adding pollution equipment.

Georgia Power said it still was unable to say which coal units would be closed or retrofitted Wednesday to comply with the rules first proposed by the EPA in March.

Utilities have three years to meet the EPA's standards, and they can ask for an additional year. After that, any that are unable to comply with the rules will be addressed "on a case-by-case basis," the EPA said. The agency, however, considers this to be "unlikely."

But Georgia Power said it took five years and cost $558 million to install mercury-reducing equipment known as baghouses on four units at Plant Scherer, one of the nation's largest coal-fired plants. That type of work will take more money and time once additional companies start adding baghouses and other equipment, the utility said.

Critics of the new rules also say they will produce job losses. The consulting firm National Economic Research Associates, in a report prepared for the American Coalition for Clean Coal Energy, says the mercury rule combined with other EPA regulations issued this year could cost 183,000 jobs a year.

But the EPA said the rules would produce 46,000 short-term construction jobs tied to manufacturing and installing the equipment to remove toxins.

Georgia and several other states are suing the EPA over another power plant rule issued earlier this year to cap sulfur dioxides and nitrogen oxides. The state's Attorney General's Office said it's premature to say whether Georgia would sue to block this rule as well. Some Republicans and Democrats have unsuccessfully attempted to block or delay the EPA's rules by floating their own policies. U.S. House Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., lashed out at the new rules Wednesday.

“These new regulations will increase energy prices for Americans who can least afford to pay more to light and heat their homes and for businesses that need reliable, affordable energy to compete globally," Whitfield said. "These rules hurt consumers, they hurt businesses and they hurt jobs.”

Power plants emit about half the nation's mercury toxins, which contaminate water and fish. The new rules will help cut thousands of premature deaths as well as asthma attacks, heart attacks, bronchitis and other health issues, the EPA said.

Environmental groups rallied around the announcement.

“This landmark standard will improve Georgians' quality of life and protect children today and for generations to come from known poisons," said Jennette Gayer, a policy advocate with Environment Georgia.