No coal in their stockings.

• Author: Beck, Bill
• Position: Indiana utilities

Indiana utilities are finding cleaner ways to burn coal, and that's crucial for the Hoosier mining industry.

Most Hoosiers probably didn't even notice, but January 1 ushered in a new era for Indiana's coal industry and the electric utilities that are the primary customers for Indiana coal.

Passage of the federal Clean Air Act amendments in the waning days of the Bush presidency means that U.S. utilities have to sharply reduce the amount of sulfur dioxide that their coal-fired power plants release into the air. The first phase of that more stringent requirement kicked in on January 1, with a second phase scheduled to go into effect January 1, 2000. Under the first phase, emissions must be reduced to less than 2.5 pounds of sulfur dioxide per million BTUs generated, and that figure is cut in half when the second phase hits.

Cleaner coal requirements have immense implications for both Indiana coal producers and for electric utilities. Indiana produces some 32 million tons a year of bituminous coal from fields along the state's border with Illinois. What coal producers call the Illinois Basin stretches into Southeast Illinois and Northwest Kentucky; the coal from the basin is used for utility steam generation. It also is situated close to rail and water transportation, which makes the coal easily delivered to Indiana utilities.

For those reasons, Indiana utilities have depended upon Indiana coal for steam electric generation for much of this century. As early as 1892, the Indianapolis Light & Power Co. built a coal-fired plant at Kentucky and West streets in the Hoosier capital city and supplied it with coal mined in Southwest Indiana. The proximity of Indiana coal has made it the fuel of choice for Indiana utilities. Though there are some small hydroelectric plants in Northern Indiana, the state's relatively flat topography for the most part rules that source out. And Indiana is one of the few states in the Midwest not served by a nuclear plant.

Today, Indiana utilities generate about 90 percent of their electric power at coal-fired steam electric stations. More than 80 percent of the coal mined in Indiana is steam coal, destined for the boilers in Indiana utility generating stations.

The problem is that Indiana coal tends to have a higher sulfur content than does much of the coal mined elsewhere in the country. That makes it harder to meet the new Clean Air Act standards. To do so, Indiana utilities have two basic options: "scrub" sulfur dioxide with a fairly expensive add-on called a "flue gas desulfurization unit," or retrofit their plants to burn lower-sulfur coal from other states.

So far, for the...