Great Lakes Binational Toxics Strategy

IMPLEMENTING THE BINATIONAL TOXICS STRATEGY
Implementation

Stakeholders Forum
November 16-17, 1998 - Chicago, Illinois

Workshop on Potential Mercury Reductions at Electric Utilities

BNS Workgroup Leaders:
Alexis Cain – USEPA Region V
Robert Krauel – Environment Canada, Ontario Region 

Welcome and Overview

Three members of the Workshop’s organizing Committee, Bob Krauel (Environment Canada), Guy Williams (National Wildlife Federation), and Dave Michaud (WEPCo) helped kick off the all-day meeting by sharing their expectations and hopes for the day. They asked the participants to:

• look for opportunities for near-term commitments to achieve mercury reductions;
• move toward actions on and practical demonstrations of the best ideas coming out of the workshop; and
• consider non-hardware options for achieving mercury emissions reductions at electric utilities.

The workshop was built around presentations and panel discussions (on pollution prevention and incentives for cleaner power). Discussion topics included the cost-effectiveness of various reduction options, control technologies, the effects of restructuring, and the potential benefits of fuel switching and energy efficiency.

Carol Andrews, Project Coordinator for the Minnesota Mercury Contamination Reduction Initiative, provided an overview of that effort, focusing on the goals, activities, options, and strategies used in Minnesota. The project works with stakeholders to develop innovative approaches to achieving cost-effective reductions in mercury contamination. She argued that while there are currently more cost-effective reduction opportunities in other sectors, achievement of mercury reduction goals will eventually require significant reductions from utilities. She suggested that utilities can contribute to mercury reductions by phasing out the use of mercury-containing devices, promoting cost-effective reductions at other sources, and participating on projects to demonstrate the potential effectiveness of technologies to reduce mercury emissions.

George R. Offen of EPRI described some of the technical issues, challenges, and realities of trying to reduce utility plants’ mercury emissions. He noted that there are some promising technologies under exploration, but cautioned that the practicality and cost-effectiveness these technologies have yet to be verified, and that the impact of mercury controls on the balance of power plant operations is an important, but poorly understood, issue. Given the increased difficulty of removing mercury as concentrations are decreased, any control requirements should be based on outlet emissions, rather than on removal efficiency.

Ian Smith (Ontario Ministry of the Environment), co-Chair of a Canadian federal-provincial workgroup looking at Canada-wide mercury standards, discussed some of the challenges and options that group is exploring. He noted that Canada’s policies related to mercury emissions depend on the United States’ policies, in part due to the emergence of an integrated (U.S.-Canada) energy market. He discussed Canada’s interest and research into non-coal options for energy production (e.g., oil, gas, solar power, and wind), multi-pollutant analyses, pollution prevention technologies currently available, and potential opportunities to offset mercury contamination in other sectors. He argued that reducing mercury emissions from utilities is currently a low priority in Ontario given the relatively small amount of emissions (since coal combustion is not the major source of electricity in Ontario), and the availability of options that can reduce mercury by greater amounts at lower cost.

Lou Pocalujka and Patrick Zombo (of Consumers Energy) then talked about their company’s Mercury Pollution Prevention Initiative to reduce the amount of elemental mercury in storage and used in devices throughout the company’s facilities. They described Consumers Energy’s efforts to consolidate and reduce mercury inventories in key service centers, replace thermostats, metering technology controls, and other mercury-containing devices in customers’ homes, develop educational initiatives, and recycle mercury the company has collected. In the initiative’s first year, the company reports a 13.7% reduction in elemental mercury.

Jeremy Platt of EPRI discussed the uncertainty that coal-fired utilities face through market restructuring. He cautioned that restructuring will not be the only factor that to influence a utility’s decision to rely (or not) on coal-fired power and described how changing market dynamics, costs of other fuel sources, and the limitations to transferring power around the country will influence the future power generation mix.

Bruce Lourie of Lourie and Love asked participants to consider the connections between forthcoming electricity market restructuring and U.S. and/or Canadian mercury policies. He noted that the restructuring offers consumers an opportunity to choose green power and allows governments to "set appropriate rules" for market restructuring. He also cautioned that restructuring may increase pressure to rely on low-cost fuels (such as mercury-containing coal) and/or compel power companies to extend the life of older power plants (so as not to incur new costs).

Following lunch, a there was panel discussion on pollution prevention options for utilities. Nancy Lange of the Isaak Walton League discussed how utilities can move away from their reliance on coal-fired boilers (e.g., by converting them to natural gas) and thereby reduce the amount of mercury emitted to the atmosphere. This option, while it may seem to be quite expensive initially, becomes much more affordable when considered as part of a multi-pollutant approach. Steve Brick, of the U.S. Generating Company, also discussed fuel switching. He argued that combined-cycle natural gas plants are the most efficient and profitable facilities, that they will dominate new plant construction, and that in some cases new natural gas plants will out-compete existing coal-fired plants. He cautioned that requiring mercury controls on utility mercury emissions prematurely could have several negative consequences, since the effectiveness of scaling existing control technologies to utility boilers is unproven, and since adoption of control requirements prior to implementation of utility deregulation could favor retrofits of coal-fired plants (if the retrofit costs can be recovered) over shift to natural gas. Enough natural gas is available for substantially increased power generation, but pipeline capacity could constrain expansion in some areas.

Doug Bagrowski of Philips Lighting Company described how use of energy efficient lighting can reduce mercury emissions from the power sector while also saving money. Finally, Paul Schueller of Franklin Energy Services, looked at energy conservation spending by utilities, which has been declining since 1994. He argued in favor of spending approximately 3 percent of utility revenues on market transformation programs for energy efficiency (including energy audits, training, education, energy-efficiency mortgages, EnergyStar), and suggested consideration of statewide system benefit charges to finance such measures.

A second panel was convened to discuss incentives for cleaner power. Chris Schoenherr of WEPCo described his company’s green energy program through which subscribers agree to pay higher rates to receive power from "green" energy such as renewable energy resources. Although the WEPCo program is new, it has found that people are willing to pay more for green power and is learning how to involve important stakeholders in the decisionmaking process, improve its customer service orientation, and market this new service. Stacey Davis of the Center for Clean Air Policy then provided an overview of the early reduction credits concept developed by the Center and its partners. The Early Reduction Credits would provide sources with incentives to pursue mercury control options that achieve multiple benefits. The program depends on procedures to ensure that reductions are verifiable and measurable and relies on the assumption that credits will be use-able in the future. As such, it relies on the likelihood of future mercury controls and/or regulations.

Following the panel discussions, participants held a general discussion to discuss and begin to explore specific activities that electric utilities, NGOs, and local, State, provincial and federal governments could undertake to help reduce mercury emissions from electric utilities. Below is a summary of those specific discussion areas.

Mercury-containing devices: Every utility ought to inventory its stockpile of liquid mercury in storage and in electronic and measurement and control devices, and make a commitment to reduce this inventory, focusing on liquid mercury in storage and those devices which create the most significant risks of spills, either in the plant or in the customer's home. Michigan DEQ and Consumers Energy will be sponsoring a workshop on this issue; EPA, Environment Canada and/or the BNS workgroup should consider sponsoring regional workshops to inspire action, and invite both gas and electric utility companies. Municipal or public utility commissions should also be involved in this activity. In Canada, Environment Canada will be approaching the Municipal Electrical Association to discuss possible actions. In addition, treatment of mercury-containing devices as universal wastes (in the United States) could encourage more utilities to institute such programs.

Support for low-cost options in other sectors: Since many options for control of mercury emissions from utilities are expensive compared with other available reduction opportunities, electric utilities should support low-cost options, for instance by financing local/state/province-wide collections of mercury containing devices from household and commercial customers.

Information-Sharing: Utilities can inform their customers about opportunities for improving energy efficiency and also how to identify potential mercury-containing devices that may need to be removed from the premises.

Technology development/demonstration: Government and utilities should support the development of promising technologies for capture of mercury from the emissions of coal-fired power plants, and utilities should participate where appropriate in projects to demonstrate the potential practical effectiveness of such technologies.

Planning for Multi-Pollutant Reduction: Fuel switching is an expensive strategy for mercury control in many cases, but when the benefits of reductions in other regulated or potentially-regulated pollutants (NOx, SO2, particulates, CO2) are considered, it can become a more cost-effective option. Therefore, utilities should consider multiple pollutant benefits in planning their future generation mix, and government should seek to encourage consideration of multiple pollutants, for instance by creating a system of early reduction credits. Credit for early reductions created by fuel switching or other means could be used for compliance with regulations that might be required in the future. Such a system would create an incentive for early reductions, but there would need to be safeguards in place to ensure that credits corresponded to real reductions.

Energy-Efficiency: Utility support for energy efficiency programs is declining in the competitive market. Paying for energy-efficiency upgrades may be an expensive way for a utility to achieve mercury reductions; however, from a societal perspective, energy efficiency may be the least-cost option in many cases, when the payback in cost savings to utility customers is considered. For instance, use of more energy-efficient lighting is a cost-free (even financially rewarding) means of reducing mercury emissions. Therefore, utilities, governments and NGOs should support energy-efficiency programs through market transformation strategies (energy efficient mortgages, EnergyStar, code changes, training and education), perhaps financed through statewide system benefit charges.

Green Energy: Utilities should test the market for renewable, less environmentally-damaging forms of electricity generation by marketing "green" energy to their customers. Government agencies and NGOs should promote the idea of buying "green," and should support the development of labeling standards for green energy.

Alternative Energy: Governments should consider changes in tax and other policies to encourage shifting to alternative energy.

Emissions information: Increased information about mercury coal content and utility emissions in the United States will be produced as the result of an information collection request. The U.S. and Canada should consider harmonizing the reporting of this information.

Workshop Follow-up

The Binational Toxics Strategy mercury workgroup is planning to follow up on these issues, particularly at the next meeting, in Toronto during the week of April 12. It is not clear at this time which of these recommendations will be acted on as part of the Binational Toxics Strategy, especially given the different areas of concern in Canada and the United States (e.g., linked to the greater prevalence of coal in the U.S.).