Public Service Electric and Gas Co. (PSE&G) and Merck & Co. have announced a trade of emission reduction credits as part of a broad initiative to develop a market-based response to combat the ozone nonattainment problems in the Northeast. PSE&G will sell a minimum of 10 and a maximum of 75 tons of nitrogen oxide (NOx) pollution reductions, called "surplus discrete emission reductions" (SDRs), to Merck in 1995. Merck will use the SDRs to comply with environmental requirements at two industrial boilers. At a price of $1,600 per ton of SDRs, Merck expects to save 50 percent of what the compliance costs would have been. The SDRs were created when PSE&G switched from coal to natural gas at its Mercar Generating Station Unit 2.
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