Air Pollution Control Equipment Services, Emissions

FirstEnergy achieve EPA emissions reductions deal

21 March 2005 – FirstEnergy Corp. announced Friday it has reached a settlement agreement with the US Environmental Protection Agency (U.S. EPA), the U.S. Department of Justice, and three states that will result in significant reductions of sulphur dioxide (SO2) and nitrogen oxides (NOx) from current levels at FirstEnergy’s generating plants.

The agreement, upon final approval by the US District Court, Southern District of Ohio, will resolve all issues related to various parties’ actions against the company’s W. H. Sammis Plant in the pending New Source Review case. The Sammis Plant is owned by FirstEnergy subsidiaries Ohio Edison Company and Pennsylvania Power Company.

“This builds on the significant progress we have been making to protect the environment while resolving uncertainty related to New Source Review,” said Anthony J. Alexander, president and chief executive officer of FirstEnergy. “And, our plans to install additional environmental controls will help us meet Clean Air Act regulations recently announced by the US EPA and enable us to continue utilizing our generating plants to meet our customers’ electricity needs.”

The agreement, which is in the form of a consent decree, also has been signed by the states of Connecticut, New Jersey and New York, and has been filed with the Court.

Under the agreement, FirstEnergy will install environmental controls at the Sammis Plant in Stratton, Ohio, as well as at a number of other power plants. FirstEnergy also will upgrade existing scrubber systems on units 1 through 3 of its Bruce Mansfield Plant in Shippingport, PA.

Projects at the Sammis Plant will include equipment designed to reduce 95 per cent of SO2 emissions and 90 per cent of NOx emissions on the plant’s largest two units. In addition, the plant’s five smaller units will be controlled by equipment designed to reduce at least 50 percent of SO2 and 70 per cent of NOx emissions. The agreement also calls for additional reductions at other plants, which may be accomplished with the installation of scrubbers, and selective non-catalytic reduction (SNCR), as well as through repowering or other strategies. In total, additional environmental controls could be installed on nearly 5500 MW of the company’s 7400 MW of coal- based generating capacity, with construction beginning in 2005 and completed no later than 2012.

Much of the company’s remaining generation comes from nearly 3800 MW of non-emitting nuclear plants, which generate approximately 40 per cent of the company’s annual output.

The estimated $1.1bn investment in environmental improvements is consistent with assumptions reflected in the company’s long-term financial planning. Nearly all of the expenditures are expected to be capital additions and depreciated over a period of years. The majority of these expenditures are expected to be made between 2008 and 2010.

In addition, the company will pay an $8.5m civil penalty to the Department of Justice and contribute up to $25m over five years to support environmentally beneficial projects.