NEWS RELEASE                                   APRIL 2004

Simple Mercury Rule That All Parties Can Endorse

An alternative to the proposed mercury rules is so simple it could be contained on a postcard.  Furthermore, it is one that all parties can endorse.  The McIlvaine Company is an advisor to DOE, EPA, equipment suppliers, utilities, and even some environmental groups.  McIlvaine, therefore, has an understanding of the wishes and needs of all sides of the issue, and has crafted a proposal which best matches the wishes and needs for all.

The insurmountable obstacle with the present approach is feasibility.  EPA says it is not feasible to achieve more than a 33 percent reduction in 2008.  Environmentalists say a 90 percent reduction is feasible.  No one can win this debate.  So it is necessary to eliminate feasibility as an issue.  Here is the way this is done.

Higher mercury emitting utilities will pay lower emitting utilities an amount of $5,000/lb. in 2007.  This amount will increase by $10,000/lb. each year until industry wide emissions are below 5 tpy.

Environmentalists will be pleased because, if their cost estimates are right, 90 percent mercury removal will be achieved within a few years.  Utilities will be pleased because cost is predictable and far less than their dire predictions.

A McIlvaine analysis shows that 50-70 percent mercury reduction will be achieved within a few years.  When the cost per pound reaches $85,000 in 2015, a removal percentage close to 90 percent will be achieved.  A worst case scenario in 2020 is a cost of $135,000/lb. and an efficiency of 88 percent.  A best case scenario is an achievement of the 90 percent removal (reduction to 5 tons) as early as 2010.

In any case, the cost to rate payers will not be horrific.  Under the best case scenario, rates will rise by well less than 1 percent.  Under the worst case scenario, rates will rise 5 percent in 2020.  Most importantly, this approach will generate rapid investment in innovative technology and will lead to the most economical removal techniques.

This approach is very flexible.  Environmentalists and utilities will argue about the amount of annual payments.  But these can be adjusted at any time if either the rate payers object to the costs or enough mercury is not being removed.  It would also be possible to augment this program with a tax which is higher per pound for the higher emitting utilities.  Even the threat of such a tax is enough to insure reduction activity.

Details on this proposal are contained in the latest McIlvaine Utility Fax Alert.  This can be read in its entirety along with background material by Clicking here