Midwest Generation coal plants unhurt by new EPA regulations

The Midwest Generation unit of Edison International (NYSE:EIX) said Dec. 22 that, due to emission control projects in play under a 2006 deal with Illinois regulators, its fleet of Illinois power plants is well-positioned to comply with two new U.S. Environmental Protection Agency rules.

One of those rules is the Hazardous Air Pollutants rule, also known as the Mercury and Air Toxic Standards (MATS), which was released Dec. 21 and will take effect in 2015, and also the Cross-State Air Pollution Rule, which is scheduled to take effect Jan. 1, 2012. The MATS rule will slash emissions of mercury and other toxics. A range of widely available and economically feasible technologies, practices and compliance strategies are available to power plants to meet the emission limits, including wet and dry scrubbers, dry sorbent injection systems, activated carbon injection systems and fabric filters, EPA said.

Midwest Generation was established in Illinois with the acquisition of six coal-fired power plants in the state in 1999. It is a subsidiary of Edison Mission Group, which manages the competitive power generation business of Edison International.

The company noted that it has invested continuously in additional pollution controls at its plants. Over the past several weeks, it has completed the installation of Selective Non-Catalytic Reduction systems to reduce emissions of NOx, which can contribute to the formation of smog. These new controls will enable Midwest Generation to comply with both state of Illinois and U.S. EPA limits for NOx which are scheduled to take effect Jan. 1, 2012. Midwest Generation said it will have reduced NOx emissions by 80% since 1999.

The company also has reduced emissions of SO2, which can contribute to acid rain, by nearly 40% since 1999, and is set to meet new U.S. EPA limits on those emissions that are scheduled to take effect in January. Both state and federal regulations will require additional SO2 emission reductions over the next several years. Midwest Generation said it will make case-by-case decisions on whether to meet those limits by making additional retrofits or by retiring certain power generating units.

Midwest Generation said it also has been among the industry’s leaders in developing and installing mercury emission controls at its plants dating back to 2008-2009. Nearly all of the company’s generating units are now reducing mercury emissions by more than 90% and already comply with MATS.

Midwest Generation operates the Fisk, Crawford, Waukegan, Joliet, Will County and Powerton plants in Illinois. As of the end of 2010, Midwest Generation operated 5,477 MW of power plant capacity, based on installed capacity acknowledged by PJM, largely consisting of the six coal-fired generating plants, which have 5,172 MW of capacity, said Midwest Generation’s Feb. 28 Form 10-K filing. The plants purchase coal from several suppliers located in the southern Powder River Basin of Wyoming. The total volume of coal consumed annually is largely dependent on the amount of generation and ranges between 17.5 million to 19.5 million tons.

Besides overall emissions reductions, the 2006 Combined Pollutant Standard (CPS) deal with the Illinois EPA also required Midwest Generation to shut down Unit 6 at the Waukegan plant by the end of 2007, and units 1-2 at the Will County plant by the end 2010, which it has done. Under the CPS, beginning in calendar year 2012 and continuing in each calendar year thereafter, Midwest Generation must comply with an annual and seasonal NOx emission rate of no more than 0.11 lbs/mmBtu. In addition to these standards, Midwest Generation must install and operate SNCR equipment on Units 7 and 8 at Crawford by the end of 2015. Midwest Generation under the CPS must comply with an overall SO2 annual emission rate beginning with 0.44 lbs/mmBtu in 2013 and decreasing annually until it reaches 0.11 lbs/mmBtu in 2019 and thereafter.

In its Nov. 2 Form 10-Q filing at the SEC, Midwest Generation that during 2011 it continued its permitting and planning activities for NOx and SO2 controls to meet the requirements of the CPS. “Based on its continuing review, Midwest Generation also does not expect the US EPA’s proposed National Emission Standards for Hazardous Air Pollutants, if adopted, would require it to make material changes to the approach to compliance with state and federal environmental regulations that it contemplates for CPS compliance,” the Form 10-Q added. “Midwest Generation expects to continue to develop and implement a compliance program that includes the use of activated carbon injection, upgrades to particulate removal systems and dry sorbent injection, combined with its use of low sulfur PRB coal, to meet emissions limits for criteria pollutants, such as NOx and SO2 as well as for HAPs, such as mercury, acid gas and non-mercury metals. Based on stack tests performed at various Midwest Generation plants, Midwest Generation believes that currently installed activated carbon injection and proposed particulate removal equipment is sufficient to achieve or exceed the mercury standards outlined in the US EPA’s existing and proposed rules.”

In February 2011, the Illinois EPA issued construction permits authorizing Midwest Generation to install dry sorbent injection systems using Trona or other sodium-based sorbents at the Powerton plant’s units 5-6 to redude SO2 emissions. Decisions regarding whether or not to proceed with retrofitting units to comply with CPS requirements for SO2 emissions, including those that have received permits, remain subject to a number of factors, such as market conditions, regulatory and legislative developments, and forecasted commodity prices and capital and operating costs applicable at the time decisions are required or made, the Form 10-Q added. Midwest Generation said it could also elect to temporarily or permanently shut down units, instead of installing controls, to be in compliance with the CPS.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.