Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Wirth

ORIGINAL DATE

LAST UPDATED

2-2-07

2-24-07 HB 318/aHENRC/aHBIC

SHORT TITLE Power Plant Mercury Emission Controls

SB

ANALYST Aubel

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

(.01)

See Fiscal Impact

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 16 and HB 481

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

New Mexico Environment Department (NMED)

Energy, Minerals, Natural Resources Department (EMNRD)

SUMMARY

Synopsis of HBIC Amendment

The House Business and Industry Committee Amendment strikes the HENRC Amendment,

which established an effective date for the new rules affecting coal burning power plants

constructed after July 1, 2007. The HBIC Amendment then reinstates this effective date under an

expanded concept of what would be required under the regulations regarding control technology

for mercury emissions, as follows:

“the greater of what is achievable with the best available control technology or ninety percent of

the mercury from input fuel for all coal-fired power plants."

New coal processing techniques, such as Inte-grated Gasification Combined Cycle technology,

which converts coal to gas that is burned in a turbine to produce electricity, are considered

progress in “clean-coal plants." In a conventional power plant, coal is pulverized and burned in a

boiler to produce electricity. Emissions are caught and filtered at the back-end of the process.

Thus, this amendment appears to address mercury reduction related to coal-burning power plants

from the input side, versus simply from the emissions side.

House Bill 318/aHENRC/aHBIC – Page

2

Synopsis of HENRC Amendment

The House Energy and Natural Resources Committee amendment to House Bill 318 would

impose “Best Available Control Technology" requirements for construction of new coal-fired

power plants that may be more stringent than federal standards, but would exempt the two

existing coal-fired plants in New Mexico that the state has jurisdiction over: San Juan Generating

Station, operated by the Public Service Company of New Mexico (PNM,) and the Escalante

Generating System. According to NMED, PNM is currently installing controls for mercury on

the San Juan Generating Plant that should result in reduced mercury emissions and the Escalante

Generating does not emit as much mercury.

Synopsis of Original Bill

House Bill 318 amends the Air Quality Control Act to allow the Environmental Improvement

Board (EIB) and local boards to adopt rules to require “best available control technology" for

mercury emissions from power plants that may be more stringent than federal requirements.

FISCAL IMPLICATIONS

There are no direct fiscal impacts for state government. However, indirect cost savings may

accrue. NMED reports that an estimated 4.0 thousand newborns in New Mexico are affected by

mercury each year and suggests that reductions in mercury exposure will reduce state health care

costs related to mercury-related health problems. Substantiation for this claim is found in a study

peer-reviewed study by the Mt. Sinai School of Medicine's Center for Children's Health and the

Environment, which calculated that the United States loses $8.7 billion annually due to the

impact of mercury on children's brain development.

SIGNIFICANT ISSUES

Mercury is a persistent, bio-accumulative (which means it undergoes chemical magnification up

the food chain) neurotoxin. DOH notes that mercury exposure is a potential health issue for New

Mexicans and that even very low levels can pose a concern, particularly for pregnant women,

infants, and children. The toxicity manifests in a variety of conditions including learning

disabilities, tremors, muscle in-coordination, loss of memory, personality changes, deafness, and

loss of vision and is also toxic to the kidneys. Many of the adverse effects of mercury are

reversible, therefore minimizing or eliminating certain exposures can have a beneficial effect on

the exposed individual.

According to the findings of the Mercury Exposure Reduction Task Force, which was

established by the 2006 Legislature through House Memorial 5, coal-fired power plants are a

large generator of mercury releases. The task force report, New Mexico Mercury Reduction

Action Plan, includes an Executive Summary and recommendations, which are included as

Attachment 1.

According to NMED, by requiring “best available control technology" (BACT) for mercury

emissions from power plants, HB 318 strives to ensure that the mercury emissions from power

plants within New Mexico are the lowest possible to minimize the adverse health effects on its

citizens.

House Bill 318/aHENRC/aHBIC – Page

3

NMED defines BACT as follows:

Best Available Control Technology is a term used in federal regulations that defines a

site-specific process for determining the maximum degree of control technology that can

be installed at a facility to reduce air pollution while taking into consideration impacts to

energy, the environment and the economy. The process is case-by-case and begins with

the most effective control technology, allowing for elimination of technologies based on

prohibitive costs or inefficiency.

Such technology may be more stringent than required under federal standards. NMED states that

current statute limits the state to require more stringent standards than federal standards, except

for regulations pertaining to solid waste incinerators.

This limited state authority was identified as one of the five most important issues for NMED in

the Transition Task Force report of December 9, 2002.

PERFORMANCE IMPLICATIONS

EMNRD states HB 318 will most likely result in less mercury emissions since the bill would

allow for regulations to require more efficient air pollution control technology for mercury

emissions from power plants.

ADMINISTRATIVE IMPLICATIONS

HB 318 will likely have some administrative impact on NMED during the drafting of rules for

mercury emissions controls to propose to the EIB and local boards,

although NMED states that

current resources are adequate to develop and propose such regulations.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB 318 related to House Bill 16, which proposes to establish a multi-organizational effort to

implement the findings of the Mercury Exposure Reduction Task Force.

HB 318 relates to House Bill 481, which proposes to reduce mercury releases into the

environment through limiting dental amalgam disposal into wastewater.

TECHNICAL ISSUES

HB 318 would amend Section 74-2-5 NMSA 1978.

OTHER SUBSTANTIVE ISSUES

NMED states that the United States Environmental Protection Agency (EPA) federal regulation

for power plants puts in place a cap-and-trade program to control mercury emissions instead of a

performance standard, which allows mercury emission "credits" be bought and sold by power

plants. According to NMED, in practice this means that power plants can emit any amount of

mercury as long as they purchased sufficient emission “credits."

NMED states that EPA’s cap-and-trade program has been heavily criticized as based on

House Bill 318/aHENRC/aHBIC – Page

4

manipulated scientific and economic analysis. On February 3, 2005, the EPA Inspector General

reported that the EPA intentionally biased its scientific analysis to make the cap-and-trade

program look more effective than control technology. On March 7, 2005, the Government

Accounting Office reported that EPA manipulated the data to make the cap-and-trade program

appear to be more economical than installation of control technology.

NMED concludes that if facilities in New Mexico take this approach, mercury emissions in New

Mexico - which NMED claims are already among the highest in the western United States -

could increase. NMED reports that the state has joined a multi-state legal proceeding to oppose

the federal mercury program.

Twenty-four states in the nation are not precluded from adopting rules more stringent than EPA,

and several states have already adopted or are in the process of developing their own rules for

mercury emissions from power plants because the federal program does not go far enough in

requiring air pollution control technology for mercury.

Federal regulations require that BACT be implemented for new facilities with large emissions of

air pollution and existing facilities with large emissions of air pollution that modify their facility.

Thus, NMED states that the EPA maintains a national “clearinghouse" of BACT and other

control technology parameters that can serve as a support source for defining the BACT at a

facility.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Without the original HB 318, New Mexico will not have authority to adopt mercury-emission

regulations that require installing any technology that is more stringent than federal regulations.

The federal requirements that allow power plants to purchase mercury credits in lieu of installing

more advanced mercury-pollution-control technology would continue. All three responding

agencies cautioned that mercury pollution would probably increase, affecting public health.

Without the amended HB 318, to the extent that new coal-fired power plants are constructed in

New Mexico, the more stringent “Best Available Technology" could not be applied.

POSSIBLE QUESTIONS

1.

Would current power plants be required to re-permit under these new rules, or would they

be “grandfathered".

2.

What BACT technologies what be economically viable for New Mexico that are not in

current use.

3.

Would these regulations apply to power plants on tribal lands.

MA/mt

House Bill 318/aHENRC/aHBIC – Page

5

Attachment 1

Executive Summary: New Mexico Mercury Reduction Action Plan

Executive Summary

During the 2006 legislative session, Representative Peter Wirth introduced memorials asking the

New Mexico Environment Department and the Department of Health to look at mercury issues

facing the state. House Memorial 5 required the departments to develop a Mercury Reduction

Plan for New Mexico. A Mercury Reduction Plan Task Force worked in collaboration with the

Dental Mercury Workgroup, convened pursuant to House Memorial 13, to develop a state

Mercury Reduction Action Plan. The two working groups

1

have completed a Mercury

Reduction Action Plan that includes this executive summary, the recommendations, and the

supporting report.

The Task Force proposes the following state policy regarding mercury and asks that this policy

be adopted by the State of New Mexico:

It is the policy of the State to minimize harm from exposure to mercury in New Mexico by

reducing or eliminating emissions, discharges, and use of mercury and/or mercury-

containing products to the greatest extent possible, when such measures are technically

and economically feasible, taking into account the health and environmental costs of

exposure to mercury.

This report and its recommendations provide mechanisms for implementing this policy.

Legislative Recommendations for Mercury Reduction

The Task Force recommends that the State of New Mexico:

a.

Adopt the mercury policy recommended above:

“It is the policy of the State to minimize harm from exposure to mercury in

New Mexico by reducing or eliminating emissions, discharges, and use of

mercury and/or mercury-containing products to the greatest extent possible,

when such measures are technically and economically feasible, taking into

account the health and environmental costs of exposure to mercury."

b.

Allocate $200,000 to NMED and DOH (through an appropriation to NMED) to fund:

i.

staffing and resources to implement the reduction strategies that can be done

immediately;

ii.

a mercury study including

1.

a comprehensive and quantitative inventory of mercury sources, waste

and emissions;

2.

a comprehensive mercury exposure study on pathways for mercury

exposure; and

3.

a monitoring program to assess air, water, soil and biota for mercury

contamination.

iii.

to educate the public on the hazards of mercury exposure; and

1

A list of the members of the Mercury Reduction Plan Task Force and Dental Mercury Workgroup is attached as

Attachment 1. In addition, the two memorials, House Memorial 5 and 13, which convened the two working groups

are attached as Attachment 2. Please note that there is a separate report for House Memorial 13.

House Bill 318/aHENRC/aHBIC – Page

6

iv.

to develop a state fish consumption advisory program, including both commercial

and locally caught fish advisories, which will provide public information and

outreach.

c. Make a statutory change to require that all dental facilities in New Mexico be equipped

with amalgam separators to assure that little or no solid mercury drains into municipal

wastewater or septic systems and that the separators be properly maintained by the

dental facilities.

d. Fully support the Solid Waste Bureau legislative request to refund the grant and loan

fund to safely remove and recycle mercury from the waste stream, where possible; to

educate the public on mercury removal from the waste stream; and to assist local

governments in conducting household hazardous waste collection programs.

e. Give preference to power generating plants that use renewable sources of energy, and

evaluate economic incentives to promote sources of energy that emit minimal or no

mercury emissions, such as renewable energy sources and advanced coal emission

reduction technologies.

Recommendations to NMED

The Task Force recommends that the New Mexico Environment Department:

a.

Conduct a comprehensive and quantitative inventory of mercury sources, waste and

emissions, initiate action steps identified and report back to the Legislature with

recommendations, if necessary, regarding statutory changes suggested by NMED.

b.

Create initiatives to recover and recycle mercury-containing equipment and products,

including but not limited to, automotive switches, fluorescent lights, relay switches and

measuring devices. These initiatives should include increasing public awareness of the

hazards of mercury, encouraging the public to buy non-mercury-containing products,

and informing the public of the proper disposal of mercury-containing products.

c.

Increase business and governmental awareness regarding the hazards of mercury,

mercury-containing equipment, alternatives to this equipment and proper disposal of

mercury-containing materials.

d.

Work with states, tribes and at a national and international level to reduce airborne

mercury emissions.

e.

Provide adequate staffing and resources for enforcement of mercury-related

regulations, including NM wildlife habitat standards, and promotion of storm-water

best management practices.

f.

Consider crematoria initiatives, including adoption or adaptation of the best

management practices being developed by Colorado for crematoria.

Recommendations to DOH

The Task Force recommends that the New Mexico Department of Health:

a.

Conduct a comprehensive mercury exposure study on pathways for mercury exposure

and report back to the legislature with recommendations, if necessary, regarding statutory

changes suggested by DOH after input from stakeholders;

b.

Identify and publish a list of all products containing mercury that are ingested or applied

to the body, provide education to the public and medical community, and consider a ban

on mercury-containing products, where appropriate. The list shall include:

•

Dietary supplements, herbs, homeopathic and Ayurvedic medications that contain

mercury

•

Medications marketed in New Mexico that contain mercury

House Bill 318/aHENRC/aHBIC – Page

7

•

Any cosmetics sold in New Mexico that contains mercury

c. Avoid use of dental mercury amalgam in vulnerable patients in the following ways:

1.

Avoid placing, removing or polishing amalgam in the teeth of pregnant women, or

women who may become pregnant, as the developing brain of the fetus is the most

sensitive receptor to mercury toxicity;

2.

Avoid using mercury to restore children’s teeth as their developing central nervous

systems are particularly susceptible to mercury impairment;

3.

Avoid using mercury in other vulnerable patients including those with kidney disease,

central nervous system disorders, autoimmune disorders, and allergic/chemical

hypersensitivity, and breastfeeding women; and

4.

Avoid placing amalgam in patients with other kinds of metal surfaces in their mouths.

d. Minimize exposures to airborne mercury in dental offices.

1.

Promote the use of methods and equipment to reduce the exposure to mercury vapor

in dental patients and staff; and

2.

Inform dental practitioners of the health and environmental risks of mercury

exposures.

e. Reduce exposures to mercury from vaccines containing mercury preservative by:

1.

Implementing a plan to make influenza vaccine that contains no mercury preservative

available for pregnant women, with support from health care providers;

2.

Educating providers who care for pregnant women on the availability and benefits to

their patients of influenza vaccine that contains no mercury preservative;

3.

Continuing to promote the production and use of vaccines that contain no mercury

preservative; and

4.

Introducing a resolution at the Association of State and Territorial Health Officers

meeting calling on vaccine manufacturers to move toward all vaccines that contain no

mercury preservative.

f. Educate the public on the risks and benefits of dental mercury amalgam and vaccine

containing mercury preservatives.

Recommendations to NMED and DOH

The Task Force recommends that the both departments:

a.

Reduce exposures from food containing mercury, including fish, by developing a

state fish consumption advisory program for both commercial and locally caught

fish, providing public information and outreach, and studying the feasibility of

requiring mercury labeling of food products and posting warnings at all commercial

establishments and restaurants that sell fresh, frozen, packaged or cooked fish.

b.

Create an ongoing Mercury Reduction Advisory Committee that is similar in

structure and function to the Task Force established by House Memorial 5.

c.

Create a comprehensive fact sheet on mercury that includes exposures from fish,

dental amalgam, vaccines, and other common sources.