Environmental regulations

July 2002

Nodak is one of eleven distribution cooperatives that is a part owner and purchaser of wholesale electricity from Minnkota Power Cooperative. Like Nodak, Minnkota is headquartered in Grand Forks, but most of the power we purchase is generated by two coal-fired power plants in western North Dakota. The first power plant was completed in 1970 and the second in 1977.

Environmental regulations are a major issue with all electric generating facilities, and the Minnkota plants are no exception. Since the first plant was built, over $123 million has been spent on sulfur dioxide scrubbers, electro static precipitators, water treatment facilities, and lined ponds for permanent storage of sludge material. These measures have contributed to reductions in sulfur dioxide and nitrous oxide emissions into the air.

The industry as a whole has done a lot to reduce these emissions over the past 20 years. As a result, the level of sulfur dioxide and nitrous oxide emissions has reduced substantially, while the amount of generation with coal has increased nearly 50%.

There are some who feel that what has been done thus far is not enough. One of the concerns is that of regional haze. This is a condition in which sulfur dioxide emissions are believed to cause impairment of visibility. Because of this concern, it is anticipated that stricter regulations in the future may require more extensive environmental measures on behalf of those generating electricity with coal. This, of course, will mean more expensive capital investments, and in turn, higher-priced power.

The latest environmental concern for utilities generating with coal is mercury emissions. Beginning about 1980, a worldwide effort was developed to reduce manmade mercury emissions into the air. These efforts have been very effective. Over this period of time, manmade mercury emissions have been reduced by roughly 75%. This has been done primarily with reductions in latex paint, batteries, and fungicides. Now, the emphasis is shifting to other manmade sources, one of which is coal-fired utility boilers.

The regulatory process has started for mandated removal of mercury from the air, which is emitted from coal-fired boilers. We know that there will be rules written in the next couple of years, and these rules will need to be complied with by the year 2007. We don’t know the level of mercury reduction that will be mandated once these rules are established.

Characteristically, the cost of compliance with these types of mandates increases exponentially with the level of mandate. In other words, removing 70% of the mercury from the emissions may cost several times that of removing 50%. In any event, it is clear that some type of regulation will be implemented, and it will increase the cost of electricity we generate.

The environment is important to everyone, and it is good that measures are being taken to keep our air and water clean. We only hope that those responsible for the legislation and regulation are in tune with reality and don’t implement excessive mandates. The cost of these mandates is very high, and we want to find a balance between a clean environment and a healthy economy.