Scrubbers in the works for power station

By Bob Niedbala, Staff writer, Observer-Reporter, Washington, PA

November 9, 2005

Allegheny Energy Inc. is developing plans to install scrubbers at its Hatfield's Ferry Power Station and if everything goes as planned, the company could have the equipment in place by 2010.

In a presentation to investors Tuesday, Paul J. Evanson, chairman, president and chief executive officer of the company, said the utility has talked to contractors about starting permitting requirements for scrubbers at the Monongahela Township plant.

The company expects to make a formal announcement regarding the project during the first quarter of the year, Evanson said.

The company in recent years has come under fire for emissions from Hatfield's Ferry. Citizens for Pennsylvania's Future filed suit against the company in January claiming the company failed to address Clean Air Act violations at the plant.

The plant also was targeted in June 2004 by Greenpeace activists who climbed one of the plant's two smoke stacks and unfurled a 2,500 square-foot banner.

Scrubbers help remove sulfur dioxide and other contaminants from power plant emissions. The equipment is expensive, estimated to cost about $400 million at Hatfield's Ferry, Evanson said in an Internet broadcast to investors.

The company had attempted to obtain financial assistance from the state and federal governments to help offset the costs of the scrubbers. "But it's been an uphill battle and to no avail," Evanson said. The most the company can expect is tax-exempt financing for the project, he said.

"The good news is, because of the financial condition we're in, we believe we have more than enough cash flow and capacity to do these on our own," Evanson said.

The company suffered losses in 2003 and 2004 but began experiencing a turnaround this year. If everything goes as planned, Evanson said, scrubbers could be in place at Hatfield's Ferry by 2010 if not 2009.

The company also is moving ahead with plans to install scrubbers at its Fort Martin Power Station in Monongalia County, W.Va.

The West Virginia legislature approved a bill in the spring allowing the company to surcharge customers to help cover the costs. The electric industry remains regulated in West Virginia, which offered the opportunity for the utility to seek money for the project from rate payers through a surcharge.

The same could probably not be done in Pennsylvania, where the electric industry is deregulated.