AES unit plans $511M in power plant upgrades

INDIANAPOLIS (AP) -- An Indiana power company plans to spend more than a half-billion dollars to reduce its mercury emissions to comply with new federal regulations from the Environmental Protection Agency.

Indianapolis Power & Light Co. said Tuesday the $511 million in upgrades at plants in Indianapolis and in Petersburg in southwestern Indiana are part of its effort to meet EPA rules designed to curb toxic emissions from oil- and coal-fired power plants, which are the largest remaining sources of manmade mercury in the environment. The EPA rules are expected to be fully implemented by 2016.

IPL's proposal must be approved by the Indiana Utility Regulatory Commission. IPL, a unit of AES Corp., is also asking the state to approve a rate increase to cover the cost of the project, expected to take about three years to complete.

Greg Fennig, vice president of community relations for IPL, said ratepayers could expect a 2 percent to 3 percent annual increase for a "number of years" but said he did not know how long the increases would be in effect.

"There are a number of utilities making investments in this arena," said Danielle McGrath, a spokeswoman for the state's utility regulatory commission. "Every utility is going to be unique in terms of what the situation is and what the request is."

IPL is also discussing shutting down some of its older and smaller coal units, including the Eagle Valley plant near Martinsville, Fennig said.

"In order to be compliant with the new mercury rules, we're doing these upgrades and then we're looking at a plan that has a possibility of shutting down (those units)," he said.

Mercury is a potent neurotoxin that accumulates in the food chain and can pose a threat to people who eat fish tainted with the metal. It can impair neurological development in fetuses, infants and children, according to the EPA.

"People can live and be healthy with some level of mercury in their bodies, but it really has an impact on a developing fetus," said Bowden Quinn, conservation director for the Hoosier chapter of the Sierra Club.

U.S. Geological Survey studies have found elevated levels of mercury in Indiana's rivers and streams and the fish that live in those waterways.

Much of that is traced to emissions from Indiana's coal-fired power plants. In 2011, Indiana got about 85 percent of its electricity from such plants, Quinn said.

The new EPA standards are estimated to cut mercury pollution from coal by 90 percent, lung-damaging acid gases by 88 percent and soot-producing sulfur dioxide by 41 percent.

IPL has about 470,000 customers in Indianapolis and surrounding counties.