The deal requires the state's largest coal-fired units to reduce their mercury emissions by 90-percent.
It applies to four Xcel Energy power units located in Becker and Stillwater. The agreement also applies to two power generation units at Minnesota Power's Clay Boswell plant in Cohasset. The utilities have until 2010 to install the first mercury control equipment. The projects must by completed in 2014.
In announcing the deal, Gov. Tim Pawlenty called it an aggressive approach that will establish Minnesota as the nation's leader in reducing mercury emissions from power plants.
"It's a watershed event in Minnesota's environmental history and progress. It's going to improve the health of our state, the health of our families," he said.
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Numerous environmental organizations were on hand to show their support for the bill.
Sierra Club lobbyist Brian Pasko spoke for the groups. He says the bill will reduce mercury emissions in the state by nearly 1200 pounds per year, about one-third of what goes into the air each year in Minnesota.
"I think it's a huge victory for the environment. It's a tremendous victory for the people of Minnesota. And this needs to go to the House and pass unammended. It needs to go to the Senate and pass unammended. And it needs to get to the governor's office and for his signature as soon as possible," he said.
Utilities applauded the bill, too.
Xcel Energy lobbyist Rick Evans says power companies needed a plan that gave them the flexibility to retrofit one plant at a time. And he says they needed to be able to recoup their costs quickly.
"The important thing for us is that we can pay as we go, so that as we're installing these devices and planning this and absorbing the costs, that we're able to build those things into our rates in a way that allows us to finance this," he said.
The agreement allows utilities to ask the Public Utilities Commission to expedite their utility recovery requests. That means Minnesotans will probably start noticing an increase in their utility bills in the next few years as power companies bring their first emissions control units online. But lawmakers say the PUC will review the utilities' mercury reduction plans before they start, to ensure that ratepayers aren't stuck with excessive costs.
The mercury deal is the result of a compromise among environmentalists, utilities and lawmakers. Sen. Scott Dibble, DFL-Minneapolis, authored a more aggressive bill that pushed for the addition of even more coal-fired plants. Still, Dibble says he's satisfied with the outcome.
"I think this bill maybe not get everything that I wanted in my original bill. It doesn't get the major utilities everything they wanted in their original bill. It's not the administration's bill. But it is the result of a lot of conversation, a lot of negotiation, a lot of flexibility," he said
Rep. Tom Hackbarth, R-Cedar, authored the original House legislation that gave utilities more time to complete their projects. But he thinks the compromise strikes a good balance.
"We've got a great common-sense bill that we can bring forward now and get this done for Minnesota. I really think this is the year for Minnesota and the environment," he said.
Lawmakers in both the House and Senate are expected to vote on the mercury emissions bill soon.