New Source Litigation
Environmental Issues Impacting Fuel
Please contact us if you would like to discuss the implications that these environmental issues may have from a "fuels perspective" or if you require additional information on these topics.
Southern Company Clean Air Act Compliance Strategy
The Clean Air Act Amendments of 1990 mandated specific reductions in the emissions of sulfur dioxide (SO2) and nitrous oxides (NOx) for all coal-fired generating plants in two phases. Phase I of this program began on January 1, 1995 and was completed on December 31, 1999. Phase II of this program began on January 1, 2000 and continues in force.
Whereas in Phase I only selected Southern Company coal-fired units were targeted, in Phase II, almost all Southern Company units were impacted by this legislation. The second phase of this program mandates that these coal-fired units operate at or below a more stringent SO2 tonnage cap than in Phase I. Current compliance strategy includes a greater reliance on low-sulfur coal to meet these new lower SO2 levels in combination with the installation of scrubbers at selected units in the future.
The quantity of sulfur in coal is measured in accordance with American Society for Testing and Materials (ASTM) standards and reported as percentage on a weight basis. The following equations are utilized to express sulfur on other bases.
To express sulfur as pounds of sulfur per million Btu:
S, lbs/mmBtu = S, % / Btu/lb * 10,000
To express sulfur as pounds of sulfur dioxide (SO2)
per million Btu:
SO2, lbs/mmBtu = S, lbs/mmBtu * 2
To express pounds of sulfur per million Btu as percent of sulfur:
S, % = S, lbs/mmbtu * Btu/lb / 10,000
To express pounds of sulfur dioxide per million Btu as percent sulfur:
S, % = SO2, lbs/mmBtu / 20,000
- 0.72 % S / 12,000 Btu/lb * 10,000 = 0.6 lbs S/mmBtu
- 0.72 % S / 12,000 Btu/lb * 20,000 = 1.2 lbs SO2/mmBtu
Where: Sulfur = 0.72% and Heating Value = 12,000 Btu/lb
Regional NOx SIP Call and the NOx "Cap and Trade" Program
The new EPA program designed to address regional transport of NOx emissions became effective May 31, 2004. For the Southern Company this new regulation had the following implications: All Alabama Power Company generating units above the 32nd parallel emitting NOx were given a "cap" as to the number of tons of NOx they could emit during the period May 31, 2004 to September 30,2004. In addition, an additional NOx dispatch cost was placed on these units based on their most recent NOx emission rate and the current market price of NOx allowances. This program will begin on May 1st, in 2005 and thereafter. Due to the results of litigation and EPA rule making, Georgia Power and Savannah Electric units above the 32nd parallel are not expected to be subject to this rule. None of the Gulf nor Mississippi Power units will be impacted by the EPA NOx SIP Call. Southern Company has already expended large amounts of capital dollars to install post combustion equipment (Selective Catalytic Reduction - SCR's) on a number of our large coal-fired units and could be an active player in the NOx allowance market if necessary. In Alabama, SCR's have already been installed at Gorgas unit #10, Miller units 3 and 4 and Miller units 1 and 2 are schedule to be in service by May 1, 2005. SCR's are in operation on the Bowen units, the Wansley units and at Hammond 4 in Georgia.
Update: March 2005 - CAIR and CAMR Rules
On March 10th, 2005 the US EPA signed new rules governing the emissions of SO2, NOX , Ozone and Fine Particulates. A new lower cap for SO2 emissions is proposed to become effective in 2010 for 28 primarily eastern states. This new Clean Air Interstate Rule will cut current SO2 emissions by approximately one half beginning in 2010 in these states and a second phase of this program will cut current SO2 emissions by one third beginning in 2015. A new Seasonal and Annual NOX trading program will begin in 2009 and like SO2, cuts current NOx emissions by half and will also have a second phase to this program in 2015 requesting additional NOx emission reductions in 2015. The impacts and compliance strategy associated with these newly proposed CAIR rules are being studied at this time but most likely will require the installation of additional control technology coupled with the need to use ever lower sulfur and NOx emitting coals.
In addition to the CAIR rules, the US EPA on March 25, 2005 issued new rules limiting the emissions of Mercury from primarily power plants in the 50 states. This new rule, the Clean Air Mercury Rule will limit mercury emissions from power plants to 38 tons by 2010 using a cap and trade program and again CAMR rule asks for further reductions to 15 tons by 2018. At this time, we continue to study the compliance alternatives available to us and are making an in depth analysis of the mercury contents of the current coals being delivered to Southern units and how to control these emission via technology.
Other Environmental Issues Impacting Fuel
Multi-pollutant legislation continues to be proposed by the US Congress and many of these proposals contain provisions for the limitation of CO2 emissions. Southern Company is monitoring and providing input into this process.