Cinergy Announces $700 Million Environmental Plan.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 25, 2000

The operating companies of Cinergy Corp. (NYSE:CIN) plan to invest more than $700 million in pollution control equipment and other methods to reduce emissions of nitrogen oxide (NOx), a gas that contributes to the formation of smog.

Cinergy expects to install up to 11 selective catalytic reduction units, or SCRs, at several of its generating stations to meet new regulatory requirements that begin in 2003. SCRs act as giant catalytic converters, using a chemical reaction to convert NOx to a harmless emission of nitrogen, water and oxygen. This technology is expected to reduce NOx emissions by 85 to 90 percent.

Cinergy also plans to install other pollution control technologies, make combustion improvements, and utilize market opportunities as part of its overall plan to reduce NOx emissions. This new program is designed to meet a series of state and federal Clean Air Act programs requiring coal-fired generating stations to reduce their NOx emissions.

"This is an ambitious program that addresses an important environmental issue associated with our continued use of coal as a fuel," James E. Rogers, president and chief executive officer of Cinergy, said. "This plan delivers on our on-going commitment to the environment and will result in a significant reduction in our NOx emissions."

SCRs are the most proven technology currently available for reducing NOx emissions produced in coal-fired generating stations. They must be installed at the top of the boiler in front of the stack, requiring structures of up to 20 stories high.

"The construction will be an engineering challenge and one of the biggest projects in the history of the company," William F. Tyndall, vice president of environmental affairs, said. "We expect to have NOx reduction projects at nearly every coal-fired generating station in the Cinergy system."

The installation of four SCRs has already begun at these Cinergy generating stations:

-- East Bend (Rabbit Hash, Ky.)

-- Gibson (Owensville, Ind.)

-- Miami Fort (North Bend, Ohio)

Future SCR installations also are being considered for these Cinergy generating stations:

-- Cayuga (Cayuga, Ind.)

-- Zimmer (Moscow, Ohio)

Other control technologies are under consideration for:

-- Beckjord (New Richmond, Ohio)

-- Gallagher (New Albany, Ind.)

-- Wabash River (West Terre Haute, Ind.)

While the SCRs will provide most of the NOx reductions, Cinergy will also install other types of controls including new computer software, known as "boiler optimization," at all generating stations. This software is similar to that used in cars to increase engine economy and efficiency, constantly making adjustments to the engine depending on conditions.

The SCR projects also will have economic benefits for the region with an estimated 2,000 construction jobs created. Most of those jobs are expected to come from the communities near the plant locations.

Since 1990, Cinergy has invested approximately $650 million on pollution control throughout its three-state service territory. In addition, Cinergy voluntarily installed the first selective non-catalytic reduction unit (SNCR) in this region three years ago at its Miami Fort Generating Station.

Since the 1990 Clean Air Act Amendments became effective, the company has significantly lowered its plant emissions, reducing its nitrogen oxide rate by more than 40 percent. The installation of low-NOx burners at most of the Cinergy stations has significantly helped to reduce NOx emissions.

In addition, the company has invested more than $260 million in the past several years on projects including wind, hydro and biomass generation as well as fuel cell and microturbine research and cogeneration projects where waste heat from the electrical generating process is efficiently used for manufacturing, heating and cooling.

Domestically and internationally, Cinergy owns or operates more than 16,500 megawatts of electrical and combined heat plant generation that is either operational or under development. Its largest operating companies, The Cincinnati Gas & Electric Company and PSI Energy Inc., serve more than 1.4 million electric customers and 478,000 gas customers in Indiana, Ohio and Kentucky.