Power isn’t everything

Pollution credits may pay for plant repairs.
Friday, October 24, 2003 | 12:00 a.m. CDT; updated 6:12 a.m. CDT, Saturday, July 19, 2008

Pollution, or lack thereof, may soon help pay for repairs at Columbia’s Municipal Power Plant.

The city plans to sell the power plant’s excess sulfur dioxide allowances, which permit the plant to emit a certain amount of the pollutant each year. Money from the sale will enable the city to repair one of the plant’s two coal-fired boilers without increasing electricity rates. The repairs probably will cost around $5 million, Water and Light Director Richard Malon said.

In 1988, the Environmental Protection Agency created a credit system that allows every power plant in the nation to emit a certain amount of sulfur dioxide, a byproduct of burning coal that is a major source of acid rain. The credits are part of a plan by the EPA to limit pollution, Malon said.

The city power plant on Business Loop 70 is allowed to produce 4,659 tons of sulfur dioxide every year, according to a report from plant Superintendent Tad Johnsen to the Columbia City Council. On Monday, the City Council approved the proposal to sell the credits.

After the EPA plan went into effect, the Columbia plant switched from using high-sulfur Missouri coal to West Virginian low-sulfur coal, Malon said. With the switch, the plant now produces 1,051 tons of sulfur dioxide annually, the report said.

The power plant has an annual excess credit of at least 3.500 tons with a value of about $600,000 a year, according to the report.

Malon also said the allowances roll over to the following year, so the power plant has last year’s and the previous year’s excess available to sell.

The allowances likely would be sold to another power plant, Malon said. So many allowances are underused by power plants across the country that a national market for the product has developed, he said.

The current rate for an allowed ton is $180, the report said.

Fourth Ward Councilman Jim Loveless voted for the proposal but said he’s philosophically opposed to the idea.

“You have to admire (Malon) for being imaginative and using an alternate source of revenue,” Loveless said. “But, on the other hand, what we are doing is selling rights to pollute. Now you have some (allowances) that aren’t being used, so the pollution is down and you’re selling the rights so someone can emit more.”

The boiler to be repaired was installed at the power plant in 1965. Most of the water pipes are original, the report said.

The power plant repairs are planned in four stages beginning with the replacement of the rear wall of the boiler. An additional power plant repair project is planned every other year for the next eight years.

The first stage was originally planned for this fall, but Malon said that engineering estimates are not completed and the council must give final approval of an ordinance to authorize the sale of the pollution credits. The ordinance to sell the allowances will likely be approved at the Nov. 17 meeting, Loveless said.

Selling allowances would be the easiest way to pay for repairs without costing the ratepayers more, Malon said.

“We could have an election and a bond issue, but this way we have a revenue stream generated by reducing pollution at the power plant,” Malon said.

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