Utilities Watch

In a surprising vote, the New Hampshire Senate recently passed and sent to the House a bill imposing tougher mercury emissions standards. If ultimately passed and signed into law the measure could have a significant impact on Public Service of New Hampshire, owner of Merrimack Station, the coal-burning electric generating station in Bow, and the Schiller generating station in Portsmouth – and, ultimately, PSNH customers.

PSNH President Gary Long suggested recently that new standards in the state legislation may be unattainable and could force the company to shut down the Bow plant. At the national level, 10 states, including New Hampshire, have filed suit over the U.S. Environmental Protection Agency’s proposed mercury emissions standards – standards that these states claim are so weak that they violate the Clean Air Act.

A coalition of environmentally oriented shareholders also recently called on dozens of the nation’s biggest electric utilities to report within a year on the financial risks they face from complying with regulations to address global warming.

New Hampshire is among 45 states where health authorities have warned that pregnant women, women of child bearing age and children younger than seven should not eat more than one fish a month from the state’s waters.

In addition to the health risks is the impact mercury can have on the economy. A study conducted two years ago for the New Hampshire Lakes Association estimated recreational uses of the state’s 1,000 lakes and nearly 10,000 miles of rivers and streams was worth up to $1.5 billion a year. Sports fishing alone contributes $245 million to $352 million in total sales, the study found.

The irony is that efforts by PSNH to clean up emissions from Merrimack Station in Bow may have aggravated the problem. According to a report in the New Hampshire Sunday News, when coal burns at Merrimack Station, as much as 90 percent of the mercury in the fuel mixes with oxygen, rising in vapor that tends to settle out of the atmosphere within about 35 miles of the plant.

The elemental and particulate mercury, which could remain airborne for hundreds or even thousands of miles, is transformed into the oxidized form that falls out quickly because of the process known as selective catalytic reduction (SCR).

PSNH spent $22 million in 1995 to install SCR equipment on the two boilers at Merrimack Station. While the technology works well in controlling ozone-causing nitrogen oxide, and according to PSNH captures quite a bit of the mercury from the coal, some of the mercury (PSNH estimates about 120 pounds at the plant in Bow last year) still goes up the smokestack.

Jeffrey T. Underhill, air resource scientist at the state Department of Environmental Services, was quoted as saying the SCR process emissions control oxidizes mercury as it passes through, and over 90 percent becomes oxidized. Once it is released in oxidized form, it is highly reactive. Studies have indicated that it gets taken up by the environment close to where it is released.

In response to these concerns, state senators voted 15-9 on March 24 to pass Senate Bill 128. This bill, which Governor Lynch supports, would require the utility to reduce its mercury emissions to 50 pounds by July 2009 and 24 pounds by 2013. The Schiller plant produces about nine pounds a year – a figure that will be cut back to about six pounds when one of its three boilers starts burning wood. (The state Supreme Court recently upheld a Public Utilities Commission ruling that allows the conversion from coal-burning to wood-burning at Schiller.)

Other emitters

If the bill passes, Merrimack Station would have a target of 44 pounds in 2009 and 18 pounds in 2013. Michael Rossler, manager of environmental programs for the Edison Electric Institute, a Washington-based group representing the nation’s shareholder-owned electricity generators, told the House Science, Technology and Energy Committee that SB 128 could raise the cost of electricity produced in New Hampshire.

Rossler argued that the best way to reduce mercury emissions is to pool resources under a national program that allows power companies to meet new requirements in a more cost-effective way. SB 128 excludes mercury from any cap and trade program like the EPA regulation that allows power companies to meet mercury emission reduction standards by purchasing emission allowances from other facilities that are able to cut their emissions below requirements.

The bill does say, however, that if PSNH is unable to meet the emissions cap for mercury, DES is authorized to recommend alternative compliance measures to the Legislature.

Power plants are not the only emitters of mercury and PSNH power plants are not the only ones affected. The state’s director of Air Resources, Robert Scott, said that going after other emission sources, such as household heating devices, even though they emit more than all of PSNH’s facilities, is not feasible under current technology and that concentrating on power plant emissions for further mercury reductions will give the state “the best bang for the buck.”

During hearings on SB 128 some opponents argued that federal efforts are a more effective way to address New Hampshire’s concerns about mercury emissions than state legislation.

In March, New Hampshire joined nine other states in filing suit in federal court against the EPA for promulgating the mercury rule that allows trading and spares the agency from having to adopt strict limits for each plant.

Doug Patch, former chairman of the New Hampshire Public Utilities Commission, is with the Concord law firm of Orr and Reno.