By Dan Klepal
Enquirer staff writer

Cinergy will spend $1.8 billion on air pollution controls over the next four years at its power plants in Ohio, Indiana and Kentucky - a move the energy giant hopes will bring its plants into compliance with proposed federal rules aimed at reducing the amount of mercury, sulfur dioxide and nitrogen oxide from utility smokestacks.

All of those chemicals are deemed health threats. Mercury is a powerful neurotoxin that affects babies and can be passed on from mother to child. Sulfur dioxide and nitrogen oxide inflame respiratory systems and can bring on asthma attacks and other problems.

Those new federal rules aren't final. After the rules are set, Cinergy will announce a second round of construction that will reduce its pollution even more and push the total investment over $2 billion.

Cinergy president and chief executive officer James Rogers said the construction will generate more than 1,000 jobs.

"This will be our company's largest environmental construction program," Rogers said.

"Importantly, this plan enables us to burn coal more cleanly and to continue using a low-cost source of generating electricity for our customers."

The money will be spent on scrubbers that use a chemical reaction to remove sulfur dioxide from exhaust gas in smokestacks and catalytic reduction equipment that works like a catalytic converter on an automobile and removes nitrogen oxide.

In addition, Cinergy will test a new technology that has been successful at reducing mercury emissions at small plants. Cinergy wants to find out if the technology - called activated carbon injection with baghouse technology - will work on a larger scale.

Environmental groups applauded the announcement, but say the government's new rules don't go far enough.

Kurt Waltzer, clean air strategist with the Ohio Environmental Council, said the original draft of the rule capped the amount of sulfur dioxide from most states at 2.25 million tons by 2010. After working its way through the political system, the cap changed to 3.5 million tons by 2015. The Ohio Environmental Council, along with the U.S. Justice Department, is part of on-going settlement negotiations with Cinergy that allege the company for decades expanded its older power plants without installing the latest pollution control technologies, as required under the Clean Air Act.

"We maintain the rule needs to be strengthened in terms of deeper pollution cuts, and happen in a faster time line," Waltzer said. "Cinergy is acknowledging what they know they'll have to do - and that's very prudent. If the rule gets stronger, that's what phase 2 is for."

Waltzer said it is unclear how the investment will affect those ongoing talks.

Of the first $1.8 billion invested, about 40 percent will be in Cinergy's plants in Ohio and Kentucky, with the rest going to its plants in Indiana.

Cinergy spokesman Steve Brash said the investment is just the latest example of Cinergy being an environmental leader among energy companies.

"This demonstrates a forward-looking planning process and a desire to do these projects in a way that minimizes the cost to our customers," Brash said. "Rather than waiting until the rules are finalized, and then beginning the construction process, we have decided to proceed with those parts that we feel are going to occur no matter what way the regulations come out.

"That way, we can get started in a way that will spread out the construction, acquisition of equipment and materials."

All of the counties in Greater Cincinnati are deemed to be out of compliance with other new federal rules that limit the amount of smog and particulate matter in the air. Each state has three years to come up with plans to get its counties into compliance, and another two years to implement the plans.

Heidi Griesmer, spokeswoman with the Ohio Environmental Protection Agency, said it's too early to say how Cinergy's investment will affect Ohio's plan. The rules OEPA must comply with have a 2008 deadline, while the new rules Cinergy's investment is aimed at have a 2010 deadline.

E-mail dklepal@enquirer.com