The emission reduction requirements of these agreements resulted in the repowering of the coal-fired Gannon Power Station
to natural gas, which was renamed as the H. L. Culbreath Bayside Power Station (Bayside Power Station), in 2003 and 2004,
enhanced availability of flue-gas desulfurization systems (scrubbers) at Big Bend Station to help reduce SO
2,
and installation of
selective catalytic reduction (SCR) systems for NO
x
reduction on Big Bend Units 1 through 4. The units were reported in-service in
May 2007, June 2008, May 2009 and May 2010.
The FPSC determined that it is appropriate for Tampa Electric to recover the operating costs of and earn a return on the
investment in the SCRs at the Big Bend Power Station and pre-SCR projects on Big Bend Units 13 (which were early plant
improvements to reduce NO
x
emissions prior to installing the SCRs) through the ECRC (see the Regulation section). Cost
recovery for the SCRs began for each unit in the year that the unit entered service.
Reductions in SO
2
emissions were accomplished through the installation of scrubber systems on Big Bend Units 1 and 2 in
1999. Big Bend Unit 4 was originally constructed with a scrubber. The Big Bend Unit 4 scrubber system was modified in 1994 to
allow it to scrub emissions from Big Bend Unit 3 as well. Currently the scrubbers at Big Bend Power Station are capable of
removing more than 95% of the SO
2
emissions from the flue-gas streams.
The repowering of the Gannon Power Station to the Bayside Power Station has resulted in a significant reduction in emissions
of all pollutant types. Since 1998, Tampa Electric has reduced annual SO
2
, NO
x
and PM emissions from its facilities by 164,000
tons (94%), 63,000 tons (91%) and 4,500 tons (87%), respectively.
Reductions in mercury emissions also have occurred due to the repowering of the Gannon Power Station to the Bayside Power
Station. At the Bayside Power Station, where mercury levels have decreased 99% below 1998 levels, there are virtually zero
mercury emissions. Additional mercury reductions have been achieved from the installation of the SCRs at Big Bend Power
Station, which have led to a reduction of mercury emissions of more than 75% from 1998 levels.
Clean Air Interstate Rule/Cross State Air Pollution Rule (CSAPR)
As a result of all its completed emission reduction actions, Tampa Electric has achieved emission reduction levels called for in
Phase I of the Clean Air Interstate Rule (CAIR). In July 2008, the U.S. Court of Appeals for the District of Columbia Circuit
vacated CAIR on emissions of SO
2
and NO
x
. The federal appeals court reinstated CAIR in December 2008 as an interim solution.
In July 2011, the EPA issued the final CAIR replacement rule, called the CSAPR. The final CSAPR is focused on reducing SO
2
and NO
x
in 27 eastern states that contribute to ozone and/or fine particle pollution in other states. Compliance with CSAPR, which
would be measured at the individual power plant level, requires the additions of scrubbers or SCRs on most coal-fired power
plants. In addition, the rule proposes intrastate emissions allowance trading and limited interstate emissions allowance trading to
achieve compliance. It is likely that the EPA will propose new ozone and particulate rules and would incorporate them into
CSAPR. All of Tampa Electric's conventional coal-fired units are already equipped with scrubbers and SCRs, and the Polk Unit 1
IGCC unit removes SO
2
in the gasification process.
The EPA has estimated that the implementation of CSAPR would result in the retirement of primarily, smaller, older coal-
fired power stations that do not currently have state-of-the-art air pollution control equipment already installed. The retirement of
these units or switching to other fuels for compliance with this rule is likely to reduce overall demand for coal, which could reduce
sales at TECO Coal.
On Dec. 30, 2011, the U.S. Court of Appeals for the District of Columbia Circuit granted the motion to stay the
implementation of CSAPR in all aspects, which had been scheduled to take effect Jan. 1, 2012, and ordered the reinstatement of
CAIR pending the outcome of the litigation. The case is currently anticipated to be heard in April 2012, but it remains unclear how
long the litigation period will take. The reinstatement of CAIR means that Florida power plants such as Tampa Electric's that relied
on CAIR controls to meet Best Available Retrofit Technology requirements continue to be in compliance with that rule.
Hazardous Air Pollutants (HAPS) Maximum Achievable Control Technology (MACT)
The EPA published proposed rules under National Emission Standards for HAPS on May 3, 2011, pursuant to a court order.
These rules are expected to reduce mercury, acid gases, organics, and certain non-mercury metals emissions and require MACT. The
final Utility MACT rules, now called Mercury Air Toxics Standards (MATS), were published in December 2011 with implementation
called for in early 2015 with extensions to early 2016 or 2017 under certain specific criteria. A potential outcome of the Utility MACT
rule is the retirement of smaller, older coal-fired power plants that do not already have emissions controls installed.
All of Tampa Electric's conventional coal-fired units are already equipped with scrubbers and SCRs, and the Polk Unit 1
IGCC unit emissions are minimized in the gasification process. Tampa Electric is uniquely positioned to be able to meet the new
standards without considerable impacts, compared to others who have not taken similar early actions. Therefore, Tampa Electric
expects the benefits of these control devices for mercury removal to minimize the impact of this rule and expects that it will be in
compliance with MATS with nominal additional capital investment.
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