LG&E to spend $500 million on pollution control

LG&E Energy Corp.�which is expected to merge with the UK's PowerGen PLC by yearend�said it will spend $500 million on a proposed nitrogen oxide (NOx) reduction project that is expected to decrease NOx emissions by 70% and bring the company into compliance with government-mandated reductions in emissions from coal-fired power plants. A company spokesman said LG&E anticipates receiving EPA approval of the plan next year.


Kate Thomas
OGJ Online

LG&E Energy Corp.�which is expected to merge with the UK's PowerGen PLC by yearend�said it will spend $500 million on a proposed nitrogen oxide (NOx) reduction project that is expected to decrease NOx emissions by 70% and bring the company into compliance with government-mandated reductions in emissions from coal-fired power plants.

The proposal is subject to approval by both the Environmental Protection Agency and the Kentucky regulators, said Chip Keeling, company spokesman. Although the pollution reduction requirements are still subject to litigation between the EPA and a number of other electric utilities, Keeling said Louisville, Ky.-based LG&E believes it is best to assume the company will need to meet reduction levels mandated by EPA.

He said the company has worked closely with both EPA and PowerGen preparing the plan and believes it will receive EPA's blessing next year.

With the exception of the plants operated by LG&E unit Western Kentucky Energy, the NOx reduction measures must be in place by May 1, 2003, to comply with new EPA requirements that cap NOx emissions at 0.15 lb/MMbtu of heat input.

The Western Kentucky Energy-operated units must be in compliance by May 31, 2004.

Independent power producer PowerGen and LG&E Energy signed a definitive merger agreement in February under which PowerGen will acquire all the outstanding shares of LG&E Energy in an all-cash transaction valued at $3.2 billion. PowerGen said LG&E Energy will become the headquarters of its US operations.

LG&E said it will install up to 12 Selective Catalytic Reduction (SCR) Systems at plants operated by subsidiaries Louisville Gas and Electric, Kentucky Utilities, and Western Kentucky. SCR uses a chemical reaction involving ammonia to convert nitrogen oxides in exhaust gases released during coal combustion.

LG&E Energy began planning for project in 1999 when representatives from the company�s regulated and nonregulated business evaluated the effectiveness of SCRs in the US and abroad, the company reported. The company said these evaluations confirmed that SCRs will work on its systems so long as it engineers for the coals it burns and the temperature ranges at which the boilers operate.

The company said it expects to have four to five SCRs under construction and another three to four under engineering design by late 2001. Each will take about 11 months to build.

In all likelihood, the first SCRs will be built at LG&E�s Trimble County station near Bedford, Ky., and LG&E�s Mill Creek Plant in Louisville, Ky., the company said. Installations will follow at Big Rivers� Wilson Station, operated by Western Kentucky, which generates electricity under a 25-year lease agreement with Big Rivers Electric Corp.

In addition, LG&E said NOx control technologies will be installed on nearly every generating unit in the system, including advanced low-NOx burners, coal reburn, and over-fire-air technology. The company also plans to install software on many units, insuring better control of the boiler combustion process.

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