Apr 27 - Knight Ridder/Tribune Business News - John Myers Duluth News-Tribune, Minn.

Minnesota would take its biggest step ever toward reducing toxic mercury air pollution under an agreement announced today by Gov. Tim Pawlenty.

The deal was announced at the Capitol after months of negotiations between the state's two largest electrical utilities, environmental groups and the Minnesota Pollution Control Agency.

The plan would cut mercury at the state's largest coal-fired power plants by about 90 percent over the next seven years -- a bigger and faster cut than proposed by federal regulators -- in an effort to reduce mercury contamination in Minnesota fish.

"This is a watershed day for Minnesota's environment and the health of our families," Pawlenty said in statement announcing the deal. "Mercury is a major threat to our wellbeing, and we need an aggressive approach to attack the problem. This agreement will make Minnesota the national leader in reducing mercury emissions from power plants."

The plan, if approved by the Legislature, would phase in mercury reduction for both Duluth-based Minnesota Power and Minneapolis-based Excel Energy. Both utilities must submit plans to the state for each of their facilities on how they will reach a 90 percent mercury reduction.

Key lawmakers in the debate said Thursday they will support the new compromise plan.

The bill demands reductions at specific coal-fired boilers for each company, starting with a Minnesota Power unit at the Clay Boswell plant in Cohasset in 2010 and ending with another Clay Boswell unit and Excel's dirtiest-burning Sherco unit in Becker, Minn., in 2014.

Minnesota Power already was moving to cut mercury before the deal was reached. In October, the company announced a $60 million plan to cut mercury and other pollution at its Laskin Energy Center in Hoyt Lakes and its Taconite Harbor Energy Center. Those plants aren't listed in the proposed legislation because they're already expected to reach the goal of 90 percent mercury reduction.

Minnesota Power also is just days away from announcing a more than $100 million project to slash mercury, sulfur, particulate and nitrous oxide emissions at Clay Boswell unit No. 3 in Cohasset. Those improvements could be operational by 2009, said Margaret Hodnik, director of regulatory and public affairs for Minnesota Power.

"Our requirement in the legislation is to have it operational by 2010, but we'll be working to have it done in 2009," Hodnik said.

Rapid advancements in the technology of removing mercury from coal emissions, coupled with reduced costs, have made the 90 percent mercury cut possible now when it wasn't feasible in recent years, Hodnik said. The technology used on each unit will vary widely, she said.

Minnesota Power will cut about 90 percent of mercury from its four largest coal-fired units. Overall, including smaller coal plants, the utility plans to cut its total mercury emissions from about 443 pounds in 2005 to 87 pounds in 2014, a more than 80 percent reduction each year.

Mercury reduction plans for each unit would still have to be approved by the Pollution Control Agency and Public Utilities Commission.

In all, the new pollution control will cost Minnesota Power more than $200 million over the next eight years. That cost will be passed along to home and business owners. A provision in the proposed legislation allows the utilities to pass on the specific costs for pollution controls without asking for a general rate increase, Hodnik said.

For example, it's expected that the already-announced $60 million project will cost average homeowners about $1 more per month on their electric bills. But the total mercury reduction plan will cost more, especially for large users of electricity like taconite plants.

The state is moving faster than federal regulators, who have set 2018 as a target date for 70 percent mercury reductions. After being widely criticized for failing to take action on mercury, and even bowing to industry demands, Pawlenty earlier this year said he would back stronger mercury rules.

Environmental groups had been pushing for stronger, faster regulations.

"It doesn't get us all the way," said Nancy Lange, Clean Air Program coordinator for the Izaak Walton League of Minnesota, a key group in the negotiations. "There was give and take on all sides. But I do believe sit's one of the strongest mercury bills I've seen across the country, and that's great news for Minnesota.

"It allows them to get their technology in order and avoid sticker shock to their ratepayers. And we get mercury out of the environment."

Still, the state's action on power plants won't solve the problem of mercury contamination in Minnesota fish. That's because only part of the mercury problem is human caused, and only part of that is from local sources.

Of the mercury that falls in Minnesota, scientists say about 30 percent comes from natural sources such as volcanoes and oceans. The other 70 percent comes from human-caused sources like power plants.

Of that human-caused mercury, the majority comes from outside the state's borders, some of it as far away as China.

Minnesota already has taken significant steps to cut mercury from other sources. By cutting mercury in thermostats, batteries, switches, light bulbs and other products -- and by keeping those products out of garbage dumps and incinerators -- the state already has cut overall mercury by 72 percent since 1990.

But because of increased demand for electricity, mercury pollution from power plants has increased in recent years.

The legislation does not address mercury pollution from taconite plants, the second largest source of mercury behind coal power plants.

While wind and solar energy are growing sources of electricity in the state, and while natural gas burns far cleaner than coal, coal remains the largest source of electricity for most Minnesotans. Coal has been touted by utilities because it is relatively cheap and is mined in the U.S.

THE PROBLEM WITH MERCURY

Mercury enters the air when materials are burned, such as gasoline in motor vehicles and, especially, coal in power plants. Some mercury also comes for natural sources, such as volcanoes and evaporation from oceans.

Some of that airborne mercury re-enters the environment in rain and snow, and some of that becomes toxic after it falls into lakes and rivers.

Mercury can build up in plants and small organisms and then accumulate in high levels in fish and animals that eat fish, including people. High levels of mercury can cause severe neurological and developmental problems, even death.

Fish consumption advisories have been issued for many Minnesota and Wisconsin lakes warning people, especially women and children, to avoid or limit eating fish to avoid mercury contamination.

An ongoing survey in Wisconsin shows nearly 25 percent of men tested have high mercury levels in their system.

The U.S. Centers for Disease Control and Prevention has reported that one in 12 U.S. women of childbearing age has mercury levels considered unsafe for fetal development. That puts about 320,000 babies at risk annually, according to the National Wildlife Federation. European research shows high mercury levels may be linked to heart attacks in men.