1. Clean Smokestacks Act North Carolina Mercury and CO2 Workshop April 19 - 21, 2004 Brock Nicholson, P.E. Deputy Director N.C. Division of Air Quality

2. Topics to be Covered Today n Overview of Clean Smokestacks Act (CSA) n Requirements for Mercury and CO2 in CSA n Origin of Mercury and CO2 Requirements in CSA n Expectations for Annual Reports to Legislature n Expectations for Final Recommendations to Legislature

3. Why Was CSA Proposed and Enacted? n Public Health Concerns n Significant Visibility Degradation, Especially in the Mountains n Economic Well Being, both Currently and for the Future n Dedication of Individuals n Opportunity Was Right n Alignment of the Stars

4. Creation of Clean Smokestack Act n In 1st Year: Environmental Group Efforts NOx SIP Rule Legislative Sponsors Ownership Real Reductions in NC Concern with Mercury and CO2 Deal on Pollutant Caps Cost Recovery SAMI Finding Support by Utility Companies n In 2nd Year: Leadership by Governor Creativeness by Utilities Commission and Companies Handling of Credits Support of Industry Customers Alignment of Stars

5. Clean Smokestacks Act Results from Broad Stakeholder Effort n Utility Companies n Legislative Sponsors n Environmental Community n Division of Air Quality / Dept. of Environment and Natural Resources n Governors Office n State Utilities Commission n Attorney Generals Office n Business and Industrial Community n Utility Rate Payers

6. Daily SO 4 Aerosol & its Change on July 15, 1995 for a 10% Reduction of 2010 Strategy A2 SO 2 Emissions KYWVVA TN 2010-A2NC ALGASC +0.15 +0.05 - 0.05 - 0.15 - 0.25 - 0.35 - 0.45 - 0.55 g/m 3 ( Class 5 day)

7. SAMI Observations: SO2 Sensitivity Maps State to State Comparison: n In general, the largest change in SO4 aerosol or SO4 deposition in a SAMI state is due to SO2 emissions changes in that state n Each SAMI state contributes to change in SO4 aerosol or SO4 deposition in neighboring SAMI states.

9. North Carolina Clean Smoke Stacks Act, What does it Require? n NOx & SO2 Caps on Emissions Tons / year Caps per Company - They decide on Controls n Phased Compliance; 1 Jan 07, 09, 13 n Actual Reductions in NC; About 75 % n Unique Cost Recovery Feature n Recommendations on Hg & CO2; Sep 05 n Reduction Credits Held by the State

10. Utility Company Plans n Initial Plans Submitted n 20 + SO2 Scrubbers n 36 SCR / SNCR Units n Most with Combustion Controls n NOx Controls in Place Starting in 2001 n SO2 Scrubbers Scheduled to be in Starting in 2005

11. Emissions Reductions Under Clean Smokestacks Bill 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1998 20072009 1998 2009 2013 NOx (tons/year) SO 2 (tons/year) 245,000 60,000 56,000 489,000 250,000 130,000

14. Origin of Mercury and CO2 Provisions in CSA n Concern Over Public Health and Environment n Desire for Comprehensive Approach for Utilities n Concern Over State of Knowledge, Technical Issues and Costs n Expectations of Significant Co-Benefits of Mercury Reduction from Control of SO2 and NOx n In Light of Concerns, Agreed on SO2 and NOx Caps at Outset with Requirement to make Recommendations to Legislature on Issue of Further Controls for Mercury and CO2 Controls by a Future Date Certain n SO2 and NOx reductions are Actual in NC

15. Requirements for Mercury in CSA n Section 12 of CSA n Significant Co-benefits Expected from SO2 and NOx Control n DAQ Shall Study Issue of Monitoring and Control Programs for Mercury from Coal-Fired power plants n DAQ Shall Evaluate Available Controls and Estimate the Costs and Benefits n Annual Reports to Legislature and Environmental Management Commission on on Interim Findings and Recommendations– September 1, 2003 and 2004. n Final Findings and Recommendation on Further Controls - September 1, 2005 n Costs of Additional Controls for Mercury Not Recoverable under the Provisions of the Current CSA

16. Requirements for CO2 in CSA n Section 13 of CSA n DAQ Shall Study Issues Related to Standards and Plans to Control Emissions of CO2 from Coal-Fired Power Plants and Other stationary Sources n DAQ Shall Evaluate Available Control Technologies and Estimate the Benefits and Costs of CO2 Control n Annual Reports to Legislature and Environmental Management Commission on Interim Findings and Recommendations– September 1, 2003 and 2004. n Final Findings and Recommendations - September 1, 2005 n Costs of Additional Controls for CO2 Not Recoverable under the Provisions of the Current CSA

17. n Question: Will Clean Smokestacks SOx/NOx Control Co-Benefit be Enough? n White Paper on State of Knowledge/Science on Expected Co-Benefit of Controls, - September 2003 n Workshop April 2004 - September 2004 Report n Understand What Control Options Exist; Benefits and costs n Update Knowledge/Make Recommendations to Legislature on Whether Additional Controls are Necessary – September 2005 n If so how much and by when? So, What Does this Mean WRT Mercury

18. WRT Carbon Dioxide n Report on State of Knowledge – September 2003 n Comprehensive Review Full Range of Options Possible for Reducing CO2 Consider Costs What is Being Done Elsewhere? What is being proposed? n Workshop April 2004 - September 2004 Report n Update Knowledge, Present Range of Options for consideration, Make Recommendations to Legislature on Reducing CO2 – September 2005

19. What Is Next? n April Status Reports on Compliance Progress n 2nd Report to Legislature on Implementation by Utilities n A Lot of Work by Utilities n 2nd Report to legislature on Hg and CO2 - September 1, 2004 n Section 126 Petition

20. References n Text of Act: http://www.ncleg.net/html2001/bill s/AllVersions/Senate/S1078vc.ht ml n www.ncair.org n Brock.Nicholson@ncmail.net 919-715-0587