Cinergy Corp. executive praises ‘Clear Skies’ approach to Congress

WASHINGTON, April 8, 2003 — Multi-emissions legislation such as the Clear Skies Initiative would benefit the environment, consumers and industry in a manner that existing air quality programs could never match, a utility executive told lawmakers on Tuesday.

“A few years ago, we initiated the debate over a multi-emissions approach under the premise that the electric power industry can do more to reduce emissions,” said Jim Rogers, chairman, president and CEO of Cincinnati-based Cinergy Corp. “But we need to do it the right way – a way that provides greater certainty for the environment, for the industry, and our customers. “We’ve come a long way under existing Clean Air Act programs,” Rogers acknowledged, “but the 30-year-old law is ill-suited to help us meet the challenges we face today.”

Rogers spoke on behalf of Cinergy and the Edison Electric Institute during a Senate Environment subcommittee hearing on the Clear Skies Act of 2003 (S. 485).

The U.S. electric power sector has reduced air emissions substantially under existing programs. The industry has cut sulfur dioxide emissions by 40 percent so far, and will have achieved similar reductions in nitrogen oxides emissions by 2004.

The power sector also has cut emissions of particulate matter by more than 90 percent, and mercury by about 40 percent through efforts to reduce other pollutants. Industry has achieved these reductions despite enormous increases in electricity use and economic growth over the last three decades.

Nonetheless, the current approach to air quality regulation is laced with problems that threaten the reliability and affordability of the nation’s electric supply. Low-cost, reliable electricity results, in part, from the power sector’s ability to utilize a variety of energy sources, including coal – which represents just over 50 percent of our generation and is our most abundant source for the future. But coal-based electric generators face emission control requirements that are duplicative, contradictory, costly and complex, creating enormous uncertainty for future investment.

“The net result of the current system is a planning nightmare that makes it virtually impossible for electric generators to have any stable notion of what requirements will be in place in the future,” Rogers said.

In addition, he said, the current approach places more pressure on natural gas supply and delivery systems, which already are yielding gas prices of great concern to the nation’s industrial users and electric customers. Rogers noted that spikes in natural gas prices this past winter forced the Wheeling-Pittsburgh Steel Corp. to reduce or halt operations at three plants in Ohio.

Moreover, the current regulatory system is so cumbersome and contentious – fraught with administrative delays and legal challenges – that it often delays the air quality progress it is designed to achieve.

In contrast, a multi-emissions approach along the lines of Clear Skies, comprising an integrated set of emission reduction targets and timetables for sulfur dioxide, nitrogen oxides, and mercury, would provide a clear and aggressive roadmap for the future.

“The Clear Skies Initiative would require the most ambitious emissions reductions ever from power plants, ensuring air quality results that are cleaner, sooner, and cheaper than under the current approach,” Rogers said. “Clear Skies also would reduce costs and increase business certainty by combining multiple, overlapping regulations into a single set of requirements.”

In addition, the utility official said, establishing a more reasonable timetable for achieving emissions reductions would give industry a chance to attract the necessary capital, while saving and creating jobs. More than 100 gigawatts of electric generation – the equivalent of about 250 medium-sized units – would be retrofitted with advanced emissions controls under Clear Skies, with each installation costing anywhere from $60 million to more than $200 million.

“With the electric power industry facing enormous uncertainty on all fronts, and with federal and state policymakers confronting tough economic choices, it makes sense now more than ever to advance multi-emissions legislation that reduces the overall costs of improving air quality,” Rogers said. “While no easy task, Congress will never have a better opportunity to create a new chapter of clean air progress.”

Edison Electric Institute (EEI) is the association of U.S. shareholder- owned electric companies, international affiliates and industry associates worldwide. Our U.S. members serve roughly 90 percent of the ultimate customers in the shareholder-owned segment of the industry, nearly 70 percent of all electric utility ultimate customers in the nation, and generate nearly 70 percent of the electricity produced in the United States.

Source: Edison Electric Institute


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