We are actively improving air quality by significantly reducing emissions from our power plants. We have been installing equipment to reduce nitrogen oxides (NOx) emissions from our coal-fired power plants since 1995 to comply with federal and state requirements. Additional control equipment installed to meet the requirements of the N.C. Clean Smokestacks Act and federal rules, such as the Clean Air Interstate Rule (CAIR) and Clean Air Visibility Rule (CAVR), has the added benefit of further reducing emissions of NOx, sulfur dioxide (SO2) and mercury.
In 2002, North Carolina enacted the Clean Smokestacks Act (CSA), capping the state’s coal-fired power plants’ NOx and SO2 emissions. Progress Energy helped develop this law with public officials, environmental organizations, citizens groups and businesses. The coalition received the U.S. Environmental Protection Agency’s Clean Air Excellence Award in 2004 for collaborative environmental policymaking.
Progress Energy Carolinas has now completed the investment of about $1 billion in state-of-the-art clean-air equipment on our three largest coal-fired power plants to comply with the CSA. We have reduced emissions of SO2 by approximately 74 percent and NOx emissions by 68 percent from 2002 levels at our N.C. coal-fired power plants. The company has successfully met the CSA caps on SO2 and NOx emissions every year since the limits went into effect.
The NOx emissions targets are being achieved through a mix of combustion controls, such as low-NOx burners and over-fire air technologies, and post-combustion controls, such as selective catalytic reduction (SCR) and selective non catalytic reduction (SNCR) technologies. The SO2 emission targets are being achieved through the use of flue gas desulfurization (FGD), or wet scrubber systems, and low-sulfur coal. The emissions cap means that trading to meet the limits is not allowed.
In 2009, we announced our intent to shut down several of our older, smaller coal-fired units at the Lee, Sutton, Cape Fear and Weatherspoon plants that do not have SCR, FGD or other similar emission-control equipment. We are replacing these units with cleaner natural gas-fired units. Construction has already begun on the replacement power plants. The first retirement, the Weatherspoon Plant near Lumberton, N.C., took place in October 2011. View more information on these fleet-modernization plans that are located in the customer chapter of this report.
The Weatherspoon coal-fired plant was retired in 2011 as part of our fleet modernization strategy.
In 2005, the EPA issued the final CAIR. The rule requires significant reductions in emissions of SO2 and NOx throughout the Eastern United States, including our service areas. The CAIR set emission limits to be met in two phases:
At full implementation in 2015, CAIR requires a 70 percent reduction in SO2 emissions and a 65 percent reduction in NOx emissions from 2002 levels. CAIR utilizes a market-based cap-and-trade system that gives utilities the flexibility to trade emission allowances to meet the emissions cap. In July 2008, the D.C. Circuit Court of Appeals vacated the CAIR. However, in December 2008, the Court reinstated the CAIR but directed EPA to revise or replace the rule.
In August 2011, the EPA published the Cross-State Air Pollution Rule (CSAPR), which would replace the CAIR. The CSAPR includes somewhat more stringent emissions targets than those in the CAIR, and it provides for limited emissions trading. Due to a number of legal challenges to the CSAPR from a variety of stakeholders, on Dec. 30, 2011, the D.C. Circuit Court of Appeals placed a stay on implementation of the rule, leaving the CAIR in effect until the CSAPR litigation is resolved. We believe that we are well-positioned to ensure ongoing compliance with the CAIR and its successor due to prior investments in clean-air technology at our power plants.
On Feb. 16, 2012, the EPA published the final Mercury and Air Toxics Standards (MATS) rule for coal- and oil-fired electric generating units (EGUs), which is also known as the EGU Maximum Achievable Control Technology – or EGU MACT – rule. This rule includes unit-specific technology standards in order to require significant reductions in mercury and other pollutants. Compliance must be achieved within three years from the rule’s effective date, or by April 16, 2015, with the possibility of a one-year extension granted by the states on a case-by-case basis. A fifth year may be granted to some utilities by the EPA to address reliability concerns.
The CAVR requires states to identify facilities that began operation between 1962 and 1977 with the potential to produce emissions that affect visibility in U.S. national parks and wilderness areas. To help restore visibility in these areas, states must require these facilities to install best-available retrofit technology (BART) to control their emissions. We have several coal- and oil-fired generating units that fall under this rule, and have installed controls or plan repowering from coal to gas.
The EPA is also in the process of revising several national ambient air-quality standards (NAAQS). In 2010, EPA completed revisions to the NAAQS for nitrogen dioxide (NO2) and SO2. The SO2 standard was made significantly more stringent, which may result in the need to reduce emissions further in some areas. EPA is reviewing the NAAQS for particulate matter, and it is expected to begin a review of the ozone standard in 2013.
We have taken an integrated approach to developing and implementing plans to comply with the requirements of the CAIR, CSAPR, CAVR, mercury regulations and the NAAQS to minimize cost impacts on customers.
Companies in many industries, including the electric utility industry, are required to report to the EPA specific amounts of certain chemicals handled or released annually. This report is known as the Toxics Release Inventory, or TRI. Our TRI data can be found in the Environment section of our website.