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Wednesday,
April 15,
1998 You are invited to a briefing on the environmental impacts of electric utility restructuring. The briefing panel will include:
This event will focus primarily on implications of restructuring for air quality and climate change, amid concerns that increased competition in electricity markets will ultimately drive the market towards the 'dirtiest' power plants. This is a critical time to consider these questions: pressure has built on the states and the federal government to deregulate the $200 billion per year electric power industry, to provide greater competition and lower electricity rates. However, many have pointed out that unfettered competition could have significant impacts upon the environment. This particularly has been a major concern of the Northeastern states. A variety of legislative proposals have been introduced, some of which seek to address these issues. The Clinton administration's release of its restructuring proposal on March 25th has provided additional impetus for this discussion as Congressional committees prepare to act. A recently completed study by Public Service Electric & Gas Co. (PSE&G) and the Natural Resources Defense Council (NRDC) establishes benchmarks for the current levels of emissions from all major electricity generators in the Eastern United States, a reference which could be useful for tracking changes in ultility sector emissions under deregulation. The analysis covers emissions of criteria air pollutants that cause acid rain as well as emissions of carbon dioxide, the most significant greenhouse gas. The wide disparity of emission levels between individual generators illustrates the distinct possibility that if the cheapest power comes from the dirtiest sources, aggregate emissions of pollutants could increase in a totally unregulated market. Therefore, a question is often raised, particularly by those from the Northeast: what is the best way to protect air quality while still tapping the potential of the market to increase efficiency in production and sale of electricity? Some would say that current efforts to deregulate electricity markets present an unparalleled opportunity to address the problem of emissions of the greenhouse gas carbon dioxide. Approximately one-third of national carbon dioxide emissions come from the generation of electricity, and however the electricity markets are restructured now will likely set the stage for these markets for years and probably decades to come. One could say, therefore, that restructuring of the electric power sector is itself clean air and climate change policy, as well as energy policy. The US Environmental Protection Agency had advocated including a 'cap-and-trade' provision for carbon dioxide emissions in the Administration's restructuring plan. The 'cap-and-trade' concept has been highly praised for its effectivenss in reducing sulfur dioxide emissions at significantly lower costs than predicted. Despite the fact that the Administration's climate change policy calls for a national carbon 'cap-and-trade' provision to be in place by 2008, this provision was not included in the restructuring guidelines released by the US Department of Energy on March 25th. Even without such a provision, the Administration claims that if its guidelines are followed, US carbon emissions in the utility sector in 2010 will be cut by 25 to 40 million metric tons (about 6%) from what they would have been in a 'business-as-usual' scenario. This is the second briefing in a three part series on electric utility restructuring; the third briefing, scheduled for April 23rd, will cover consumer disclosure and net metering. EESI briefings are open to the public and require no reservations. Please contact EESI at (202) 662-1886 for more information. |