US electric utility executives testify against multipollutant bill

By the OGJ Online Staff

HOUSTON, Nov. 15, 2001 — Electric utility officials Thursday testified a Senate bill that would require additional cuts in sulfur dioxide, nitrogen oxides, and carbon dioxide emissions is too costly and doesn’t take into consideration regional differences.

They called for a “properly” structured approach to controlling multiple pollutants that would achieve critical environmental, energy, and economic objectives during a US Senate Environment & Public Works Committee hearing on S. 556, sponsored by Sen. James Jeffords (I-Vt.), committee chairman.

Jeffords said it is time for the next installment on reducing emissions — a multi-pollutant bill — and to start on climate. “We’ve learned substantially more about the overwhelming threat of global warming. We know this threat is growing because of manmade carbon emissions. The power sector generates a third of US carbon emissions and must make reductions.”

Jeffords said the bill will hold the electric power sector responsible for reducing its share of carbon emissions.

Gerard Anderson, president of DTE Energy Resources, a unit of DTE Energy Co., Detroit, Mich., complained the electric power industry faces multiple, uncoordinated, and overlapping emission control requirements as it tries to develop plans to build new generation capacity, upgrade plants, and add pollution controls.

“In lieu of the current regime, a reasonable and integrated multi-emissions strategy would streamline the regulatory process, accomplishing meaningful air quality benefits at a much lower cost, while protecting electric reliability,” he said.

Anderson called for a multi-emissions strategy that would provide maximum flexibility for achieving reductions, reasonable compliance deadlines, and regulatory certainty. Anderson said any legislation should substantially reform the Clean Air Act’s “new source review” (NSR) program, which requires that existing power plants undergo review for additional controls before undertaking a major modification that would result in a significant emissions increase.

As currently interpreted by the US Environmental Protection Agency, Anderson said the NSR program could prevent power plant operators from making necessary improvements and undertaking routine maintenance.

Legislation also must maintain fuel diversity and use of domestic resources, including coal, Anderson said. He noted coal could meet the nation’s energy needs for 250-350 years, while claiming natural gas reserves appear adequate for only about 40 years.

Anderson said government forecasters have predicted coal-based electric generation will decline by 38-42% if S. 556 is enacted. He said this could result in short-term supply disruptions and reliability concerns as facilities convert from coal to natural gas or go off line to install new emission controls.

Jeffry Sterba, chairman of Public Service Co., called for legislation that would require utilities to reduce emissions of SO2, NOx, and mercury, and provide operational certainty needed to meet the growing demand for electricity. “There are several reasons, however, why PNM cannot support a uniform, one-size-fits-all program as proposed in S. 556,” he said.

He said emissions reduction targets mandated in S. 556 “appear to be a policy response to conditions that simply do not exist in our part of the country.” The main air quality issue in the West related to power plant emissions, he said, is visibility impairment in national parks.

Western regional differences
The Western Regional Air Partnership (WRAP), consisting of state and federal regulators, environmental groups and industry representatives, has developed new SO2 limits to address this issue, he said. At the same time, Sterba noted, there is not a single non-attainment designation for ozone or fine particles resulting from power plant emissions.

Any multi-emissions bill should take western differences into account, he said. Legislation should incorporate the WRAP recommendations for SO2 reductions, and ensure the costs associated with NOx reductions are proportional to the potential benefits of those controls. Sterba also called for elimination or reform of NSR and other “overlapping and burdensome” Clean Air Act programs.

Anderson and Sterba pointed to the particularly severe impacts of S. 556’s requirements for mercury and CO2. Citing a recent government analysis, Anderson pointed out that mercury emission control technologies are relatively new and untested on a commercial scale.

While both companies use low sulfur, sub-bituminous coal to produce electricity — which contains less mercury than other forms of coal — the mercury present in this type of coal is extremely difficult to remove, the utility executives said.

“In some cases, it would be impossible for PNM’s plants to comply with the bill’s requirements given the present and near-term state of demonstrated control technology,” Sterba said.

With respect to CO2, the utility officials said they supported voluntary efforts to address global warming, modeled after the utility industry’s Climate Challenge program. Through this voluntary partnership with the Department of Energy, electric companies were projected to reduce, avoid, or sequester 174 million tonnes of CO2-equivalent in 2000.

“Because there is currently no effective control technology for greenhouse gas emissions, compliance with stringent, mandatory targets and timetables such as those in the Kyoto Protocol would cause massive fuel-switching in the electric utility industry from coal to natural gas,” Anderson said.

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