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Granholm Announces Mercury Reduction Proposal

Gongwer News Service, April 17, 2006

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Michigan's power plants will have to reduce mercury emissions by 90 percent by 2015 under a proposal Governor Jennifer Granholm announced Monday, a standard that exceeds the federal plan to reduce mercury emissions by 70 percent by 2018.

Environmentalists hailed the move as critical to improving the state's health and environment. But utilities and business groups questioned why the state should have a reduction proposal separate from the federal rule.

Business groups and utilities also warned of the potential cost of the proposal, saying it could make electric generation uncompetitive in Michigan.

And in what appears to be an early dispute between business and environmental groups there is also a question of whether technology exists to meet that standard, with environmentalists saying it does and business groups saying it does not.

The announcement comes after an advisory group to Ms. Granholm worked on suggested proposals.

"Michigan must take actions to protect its citizens and environment from mercury contamination, but we must do so in a way that balances energy, environment and the economy," Ms. Granholm said in a press release. With the rule, future generations of Michigan citizens will be able to enjoy clean air and safe water.

Michigan is not the only state to call for a 90 percent reduction in mercury emissions. Illinois, Minnesota, Georgia and Pennsylvania have also called for 90 percent reduction in mercury emissions. But business officials said the reduction won't be as major an issue in Illinois since much of that state's electric generation is from nuclear power. And in Pennsylvania, officials said utilities will be considered meeting the standards if they have scrubbers on their smoke stacks.

"We know we will need additional capacity and we are not going to be able to get with solar or wind, so coal and nuclear are our only options," said Doug Roberts Jr. of the Michigan Chamber of Commerce. The state has little choice but to build coal-fired generation plants, he said.

But Jason Barbose of the Public Interest Research Group in Michigan praised the announcement, saying it would go a long way towards making the state's children mercury free.

David Gard of the Michigan Environmental Council said the announcement was an "affirmation that coal-fired power plants can, and must, utilize state-of-the-art technology to slash mercury releases."

And Paul Shaheen of the Michigan Council for Maternal and Child Health said he was "delighted" Ms. Granholm had taken the "aggressive step to protect public health."

Scott Simon of DTE Energy, which has six-coal fired plants to generate electricity, was cautious in saying the utility would work with the administration in developing a mercury reduction proposal.

The company has "always been committed to reasonable, cost-effective environmental policy," Mr. Simon said. "But we need to make sure electric generation is also cost competitive."

Dan Bishop of Consumers Energy, which has four coal-fired plants, said the company did not think Michigan needed its own rule that is more stringent than the federal rule.

If the state does pursue its own rule then utilities have to be assured they can recapture the costs of developing the emissions reduction technology, Mr. Bishop said, and that the companies will not be directed to meet the state's requirement if the means do not exist to meet that proposal.

Under the proposal, the first phase of reduction would be based on the federal Clean Air Mercury Rule. The second phase would go beyond the federal rule to achieve the 90 percent reduction by 2015.

Ms. Granholm said in her statement that she is also asking that the state take into account "technological and cost-based considerations" in reaching the reduction effort. For example, utilities will be given more time to meet the rules if they implement new technology to cut emissions and finds it does not meet the requirements. A company could also get additional compliance time if it has been reducing emissions but the cost of going beyond the federal requirements will exceed specified percentages of the company's gross revenues from electric production.

Environmental Quality Director Steve Chester said the department's next step will be creating a stakeholder workgroup, as it does with other air quality rules, to develop the first draft of the rule. Among other issues that group would be charged with addressing would be the starting point for measuring the 90 percent reduction and how much credit would be given for existing technology on plants.

The department's prior mercury workgroup determined 3,082 pounds of mercury were released from power plants in 1999, but he said the new workgroup would have to decide if that was the appropriate starting point. Officials noted emissions have dropped in recent years with some new emissions technology implemented and with some fall-off in the growth of energy demand.

Mr. Chester and others said there is available, affordable technology to meet the emissions reduction requirement. But he said the rule would provide utilities an exception if they can show the technology is not, in fact, available or would be too expensive.

Again, what would be considered too expensive and how long utilities would be able to hold off on meeting the requirement would be left to the workgroup to decide.

Whatever the cost, Mr. Chester said it should be reflected in electric rates. "I'm supportive of them recouping these costs, not just on this but on other efforts to control pollution," he said.

And Mr. Chester said Michigan could face some challenges that other states might not in meeting the reduction goal. "We've got an older coal fleet," he said. Officials said the average age of the 65 generating units, spread among 21 power plants, is about 40 years, with ages ranging from 14 years to 60 years.

Mr. Roberts said he hoped the emissions rule would be considered in tandem with Ms. Granholm's directive on energy needs in the state. He also questioned why such an important proposal was being handled as an administrative rule rather than as a statute.

Ari Adler, spokesperson for Senate Majority Leader Ken Sikkema (R-Wyoming), said the proposal seemed like a "great deal of nothing." There were so many caveats in the proposal that it seemed it "would reduce complaints from environmentalists faster than it would mercury emissions," he said.

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