American Electric Power
Signs Contracts to Install SCR
COLUMBUS, Ohio, April 19, 1999 -- American Electric Power (NYSE: AEP) has signed an umbrella agreement with Babcock & Wilcox, DB Riley and Siemens Westinghouse Power Corporation and separate agreements with each company to initiate engineering, design and construction planning for selective catalytic reduction (SCR) technology at a number of its coal-fired power plants. SCR will reduce emissions of nitrogen oxides (NOx) from AEP´s coal-fired generating plants.
AEP estimates that, to meet the NOx limits established by the U.S. Environmental Protection Agency, capital costs could be up to $1.2 billion.
"Even though we do not know the final scope of emission reductions we will have to make, we must conduct the engineering, design and planning work now if we have any hope of meeting EPA´s 2003 deadline for NOx reductions," said James J. Markowsky, executive vice president - Power Generation, AEP. "The umbrella agreement ensures that the work will be highly coordinated among the companies. As it is, SCR suppliers will be under significant stress to fulfill the demands of the coal-fired electricity industry as we all work diligently to meet EPA´s stringent timeline."
The individual contracts and the Umbrella Agreement provide a mechanism for the four diverse companies to use a team approach to implement SCR systems and set safety, performance, quality, schedule and cost standards for the industry.
E. Linn Draper Jr., chairman, president and chief executive officer of AEP, said, "This is a project of significant importance, but it´s accompanied by significant uncertainties regarding its final scope. We appreciate the maximum flexibility that each company has built into the contracts, given that we do not know yet how extensive the work will have to be."
"Babcock & Wilcox has been a leader in environmental technologies for nearly three decades, and we are extremely proud to be selected by American Electric Power for the construction of these SCR systems," said James S. Kulig, vice president and general manager, Babcock & Wilcox Power Generation Group. "We appreciate AEP´s confidence in our ability to perform to aggressive schedules, and we´re looking forward to working closely with them and the other team members to develop innovative and economical solutions for these projects."
John J. Halloran, president and CEO of DB Riley, Inc., said, "This is a significant step by AEP to take this initiative. Coming forward to form an agreement with major suppliers of technology, products and construction in the air pollution control industry established AEP´s commitment to implement environmental controls within their system."
"We are extremely pleased that AEP chose us as a partner in this very important program for our catalyst technology and engineering capabilities. As a leader in the market, we see this program as a significant milestone by one of the nation´s largest electric utilities in providing reduced NOx emissions across the country," said Kevin Sullivan, vice president Diverse Businesses, Siemens Westinghouse Power Corporation.
NOx, when it reacts with volatile organic compounds in the presence of heat and sunlight, can contribute to the formation of ground-level ozone. SCR uses a chemical reaction to break down the NOx present in the flue gas that has been released by the coal-combustion process. Ammonia is added to the flue gases, which are then channeled through a catalyst that breaks down the gases into elemental nitrogen and water.
AEP, a global energy company, is one of the United States´ largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio. On Dec. 22, 1997, AEP announced a definitive merger agreement for a tax-free, stock-for-stock transaction with Central and South West Corp., a public utility holding company based in Dallas.
The Babcock & Wilcox Company is an operating unit of McDermott International, Inc. (NYSE: MDR), a leading worldwide energy services company. McDermott and its subsidiaries manufacture steam-generating equipment, environmental equipment, and products for the U.S. government. They also provide engineering and construction services for industrial, utility and hydrocarbon processing facilities, and to the offshore oil and natural gas industries.
DB Riley, Inc. of Worcester, Mass., is a division of Babcock Borsig AG, formally Deutsche Babcock AG, of Oberhausen, Germany. For 85 years, DB Riley has been a leading supplier of steam generating, fuel firing and environmental equipment for electric utilities and industry. Babcock Borsig is a world leader in installed SCR capacity on coal-fired boilers.
Siemens Westinghouse Power Corporation is a Siemens Company headquartered in Orlando, Fla. Within Siemens global Fossil Power Generation business, Siemens Westinghouse is the regional business division for the Americas, and operates engineering and manufacturing centers in North America. In the U.S. and Canada, the company is also responsible for the Industrial Turbines, Instrumentation & Control, and Hydroelectric businesses.
For More Information, Contact:
Senior Media Representative
American Electric Power
Manager, Public Relations
Babcock & Wilcox
Brian M. Kennedy
Director of Marketing
DB Riley, Inc.
Manager, Public Relations
Siemens Westinghouse Power Corporation