Sikeston may be at end of low power rates

SIKESTON, Mo. -- New U.S. Environmental Protection Agency rules could mean Sikeston saying goodbye to some of the lowest electricity rates in the nation.

Sikeston's Board of Municipal Utilities' rates are among the lowest in the state, while Missouri is listed among the five states with the lowest retail electricity rates. But that all could change within the next couple of years, according to Ed Throop, executive director of the Sikeston Board of Municipal Utilities.

EPA's Cross-State Air Pollution Rule, commonly known as CSAPR (pronounced "Casper"), was set to begin phasing in Sunday. CSAPR lowers the limits on the emissions of sulfur dioxide and nitrous oxide, Throop said.

"That rule supersedes CAIR, the Clean Air Interstate Rule," Throop said.

BMU officials received word Monday, Throop said, of a federal appeals court's Dec. 30 ruling that ordered a judicial stay on CSAPR. Petitioners cited the irreparable harm that could be caused to companies by closing coal-fired electric generating units and other manufacturing firms.

Whether CSAPR goes into effect may be decided this spring. "That goes to the Washington, D.C., courts in April," Throop said.

A second issue facing BMU mercury emissions and particulate matter, Throop said. Unless something changes, BMU will have to comply with the limits within three years, he said.

The first step to getting below the new limit would be to "turn the scrubber back on at a cost of $20 million plus another $3 million in annual operating costs," Throop said. "But that would only remove 50 percent of the mercury we're required to reduce."

One option for getting the Sikeston Power Plant's mercury emissions down to compliance levels would be a carbon injection system, but BMU officials don't know yet what the cost would be or even how effective carbon injection would be.

Throop said he finds it strange that the EPA is forcing the Sikeston Power Plant to get rid of mercury emissions while federal legislation goes into effect this year which mandates the use of new energy-saving light bulbs in homes -- bulbs that release mercury into the air when broken.

The MACT rule also lowers the sulfur dioxide limit from .2 pounds per million Btu from .6 pounds, Throop said.

It is possible the courts could rule against MACT or that Congress could take action, Throop said, but if MACT rules go into effect, the country will lose around 12-25 gigawatts of power supplied by "older coal-fired power plants that can't afford to comply."

If figures work out so the Sikeston Power Plant can't afford equipment to bring it into compliance, "we shut the Sikeston Power Plant down and buy the energy on the open market."

With all the uncertainty surrounding EPA's new rules, "we don't know what that market price would be," Throop said.

It would, however, definitely result in the loss of 85 jobs at the power plant, he said.

A third issue facing BMU is the coal combustion residuals rule proposed by the EPA in June. Throop said EPA officials are looking at declaring fly ash, a byproduct of the Sikeston Power Plant, as either a solid waste or a hazardous waste.

"It's a benign substance -- it's just ash," Throop said. "Our fly ash is used to make concrete."

If the EPA classifies fly ash as a solid waste, instead of BMU selling this byproduct to local concrete plants for an annual income of about $100,000, BMU will have to spend about $4 million building more ponds to put the fly ash into.

Even more costly would be action BMU would have to take if fly ash is declared a hazardous waste.

"What we basically would have to do is build a landfill," Throop said -- a project with an estimated cost of $14 million.

Throop said the result of CSAPR, MACT and coal combustion residuals rules all going into effect for BMU's customers could be a 33 percent increase in rates.

"We still don't have a final ruling," Throop said, "but Sikeston has to start planning to implement these changes to our operation."

Even if the courts do end up ruling in favor of the power industry, BMU's operating costs are very likely to go up as a new coal contract will be needed in 2013.

Throop predicts at the least a 30-percent additional rate increase due to the cost of coal and transportation going up over 100 percent for 2013.

He said it is "ironic that China is buying our coal and manufacturing products that we use every day with coal. It just doesn't make sense for our economy."

Pertinent address:

Sikeston, MO