PG&E Corporation Launches Modernization Project Of More Than $400 Million For Mass. Power Plant


Salem, MA - PG&E Corporation's (NYSE: PCG) National Energy Group today announced one of the largest plant modernization projects of its kind -- an investment of over $400 million -- to significantly reduce airborne emissions from its 760-megawatt electric generating plant, Salem Harbor Station.

The Company plans to further reduce the plant's rate of emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) by more than 65 percent and 55 percent respectively. According to Steven A. Wolfgram, a vice president for the Corporation's National Energy Group, this plan, on top of additional aggressive emissions cuts begun last year, constitutes one of the most extensive modernizations of a power plant of its kind in the country, and goes well beyond any existing state emission requirements. "Since taking over operations of the facility two years ago, we've made environmental improvements a top priority. We've listened to community concerns and we're delivering on our commitments," he said. "Salem Harbor will soon be one of the cleanest coal-fueled generating plants in the country."

Prior to plans announced today, the company launched a three-year effort in 1999 to cut NOx and SO2 emissions at the Salem Harbor and Brayton Point Stations. In addition, since 1990, more than $130 million has been invested at both plants to reduce emissions rates by 60 and 40 percent for NOx and SO2 respectively. Upon the completion of the modernization project announced today, the Salem Harbor plant will have reduced both NOx and SO2 emissions by approximately 80 percent since 1990.

"I support PG&E's stated intention to substantially reduce toxic emissions at the Salem Harbor power plant," said Jan Schlichtmann, a local resident active in environmental issues. "I look forward to working with PG&E and all others to ensure that the Salem plant becomes one of the cleanest in the region."

The proposed modernization will use advanced technologies for emissions removal, including a new clean coal boiler, a state-of-the-art emissions control technology for NOx removal called selective catalytic reduction, a dry scrubber system for removal of SO2, and a baghouse for removal of particulates.

Before starting the upgrade, PG&E Corporation must acquire a series of local, state, and federal approvals that could take over a year to secure. With the support of the local community, the company is hoping for timely approvals.

"These investments represent an all-around win for the residents of Salem, the plant's employees, the environment, and the regional economy," said Salem Mayor Stanley J. Usovicz, Jr. "The Salem Harbor plant has always been active in this community, and these improvements go further to establish the plant as a good, responsible neighbor." Given the timeframe for permitting, the company expects to begin construction in 2002, and complete the upgrade by the beginning of 2004. The project is expected to provide approximately 500 additional union jobs during the construction period.

PG&E Corporation with 1999 operating revenues of nearly $21 billion and operations in 27 states, markets energy services and products throughout North America through its National Energy Group. The Corporation has a significant presence in the New England area with ownership in 20 power plants and one of the most active power trading businesses in the region.


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