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SOUTHERN INDIANA GAS AND ELECTRIC COMPANY PETITIONS APPROVAL OF ITS CLEAN AIR ACT COMPLIANCE PLAN

 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY PETITIONS APPROVAL
 OF ITS CLEAN AIR ACT COMPLIANCE PLAN
 EVANSVILLE, Ind., Jan. 3 /PRNewswire/ -- Southern Indiana Gas and Electric Company (NYSE: SIG) (SIGECO) has petitioned the Indiana Utility Regulatory Commission (IURC) for an order to approve its Clean Air Act compliance plan. The plan is filed voluntarily under the provisions of an Indiana law which provides for advance approval by the IURC. Title IV of the 1990 amendments to the Act mandates strict new emission standards that require dramatic reductions of sulfur dioxide and nitrogen oxide emissions from coal-fired generating plants in 1995 (Phase I) and 2000 (Phase II).
 In 1991, SIGECO employed the services of Black & Veatch, a major engineering services company, to evaluate the economics of alternative strategies for compliance with the Act. The major objective was to create a least-cost compliance plan that continues to provide reliable and efficient electrical service to our customers. Their analysis evaluated more than 25 different technologies serarching for the most economical method. The results of their study indicated that the most economical methods for SO2 reduction were switching to low sulfur coal or installation of flue gas desulferization systems (scrubbers) to clean the flue gases. The cost impact of the various strategies consisting of fuel switching, scrubbing, and combinations of the two were evaluated to determine the least cost compliance plan.
 SIGECO's least cost compliance plan calls for the installation of a single scrubber facility on Untis 2 and 3 at the Culley Generation Station by Jan. 1, 1995 to remove approximately 95 percent of the sulfur dioxide from the flue gases. The boilers on these units will also be retrofitted with low nitrogen oxide (low-NOx) burners. These changes will meet or exceed the requirements of Phase I of the Act that becomes effective Jan. 1, 1995. Additional generating units will be affected in Phase II, effective Jan. 1, 2000. Phase II will require retrofitting Culley Unit I and Warrick Unit 4 boilers with low-NOx burners. In the year 2000 it may also be necessary to switch fuels to a medium sulfur coal at Warrick Unit 4. This decision is contingent upon further review and analysis of other technologies which may be available at that time.
 Proposals for supplying and constructing the scrubber for Culley Units 2 & 3 have been obtained from five companies. After a stringent evaluation process, two companies remain under consideration. They would utilize German technology to remove more than 95 percent of the SO2 from the flue gas and would produce a commercial grade synthetic gypsum by-product. SIGECO is investigating the marketing of the synthetic gypsum for wallboard manufacturing and other commerical uses. Although German technology will be used, a U.S. company will utilize the local labor force, and materials and equipment manufactured in the U.S. in the construction of the scrubber.
 The entire Phase I project, including the installation of the scrubbers, low-NOx burners and other required auxiliary equipment on Culley Units 2 and 3, is estimated at approximately $120 million. The cost of this compliance plan is expected to result in an electric rate increase of about 10 percent that will be phased in over three years beginning in 1993. The average electric residential customer using 1000 kWh including fuel cost adjustment currently pays $71.98. With a 10 percent increase, the bill would be $79.06. This investment will achieve a drastic reduction in SO2 and NOx emissions, while allowing SIGECO to continue using high sulfur coal.
 -0- 1/3/92
 /CONTACT: Mary Beth Reese of SIGECO, 812-464-4525/
 (SIG) CO: Southern Indiana Gas and Electric ST: Indiana IN: UTI SU:


LC -- CL012 -- 6585 01/03/92 16:43 EST
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Date:Jan 3, 1992
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