Last February (2001) House Bill 284 was proposed in the New
Hampshire legislature.  The bill was one of the most progressive
multipollutant plans to be proposed in the U.S. and the only one
with specific reduction requirements for all four pollutants (SO2,
NOx, mercury and CO2).  Since then officials, interest groups
and energy industry representatives have been negotiating to
modify the bill so that all parties involved could support the
legislation.  November 6, 2001 the new draft of HB 284 was
released.  A summary of the bill and significant changes from the
February draft follow.

The bill is applicable to existing fossil fuel power plants.  New
Hampshire has 3 grandfathered power plants built before 1977:
Merrimack Station in Bow, Schiller Station in Portsmouth, and
Newington Station in Newington; all three belong to Public
Service of New Hampshire (PSNH).  This bill is specifically
aimed at controlling emissions from these plants, however the
language of the bill is somewhat vague and could include other
existing units.  We are waiting for a response from the state on
this issue.

The new caps will be applied year round.  Allowances are
output-based and trading is allowed for SO2, NOx, and CO2.
The rule language also allows for trading of mercury, however
the supplementary information does not list mercury as a
tradable pollutant.  We are looking into this.   Caps are as
follows:

*   SO2 emissions: 7,289 tpy.  This is a 75% reduction from
    current levels by the end of 2006.  This is the same cap
    as the original bill, but achieved a year earlier.
*   NOx emissions: 3,644 tpy.  This is a 70% reduction from
    current levels by the end of 2006.  This too is the same
    cap as the original bill, and it will also be achieved a year
    sooner.
*   CO2 emissions: 5,425,866 tpy.  This reduction will put
    emissions at 1990 levels by 2010.  This change aligns
    the target and timetable for carbon reductions with those
    of the New England Governors and Eastern Canadian
    Premiers Climate Change Action Plan, adopted in
    August 2001.  A lower cap for years after 2010 will be
    recommended no later then April 2004.
*   A cap for mercury emissions from coal burning plants must
    be recommended to the Legislature by the Department
    of Environmental Services by early 2004.  This schedule
    allows the cap to be set taking into account a specific
    assessment of mercury emissions from PSNH's facilities
    and the results of federal mercury limits that will be
    proposed by the US EPA in late 2003.

Affected units must file compliance plans to meet the
requirements of the new bill and to describe monitoring and
reporting procedures for mercury content in emissions.  Caps
may be met through reductions or trading.  Allowances from
federal and regional trading programs may be used as well,
however mercury credits from other programs are only valid for
reductions above the level required by federal limits.  An SO2
allowance from an upwind state will be upgraded by 25%,
meaning 0.8 tons purchased from an upwind state will be
credited as 1.0 allowances by the state.  NOx DERCs cannot
be used for compliance from May to September.  Credit will be
given for early reductions of CO2 and Mercury.

Voluntary expenditures by PSNH for energy efficiency,
renewable energy, and conservation programs will be rewarded
by a number of allowances equivalent to the cost of the
renewable, efficiency and conservation programs.

The bill will be introduced as an amendment to HB 284, which
was retained from the 2001 Legislative Session.  Action on the
bill early in the 2002 Legislative Session, which starts in January,
is anticipated.


Mary Schoen
Environmental Strategies
Enron Corp
415.782.7803 (phone)
415.782.7854 (fax)