In a study expected to fuel the debate over federal plans to revamp stringent air pollution regulations, a report released Thursday found that fewer than 20 of the 100 largest U.S. public and private electric companies account for nearly 50% of the emissions from carbon dioxide (CO2), mercury (Hg), oxides of nitrogen (NOx) and sulfur dioxide (SO2). The report, which used publicly available company data provided in 2000 to the U.S. Environmental Protection Agency and the Department of Energy, noted that four to six companies alone accounted for 25% of emissions of each pollutant.

Not intended as an indictment of the power industry, the report instead is designed to encourage discussion about revisions to the country’s emissions rules, according to one of the lead authors, David Gardiner, who was the former director of climate change policy in the Clinton administration. “The very large disparity between the cleanest and the dirtiest companies demonstrates that a large number of companies are relatively clean, and a relatively small number are responsible for the vast portion of emissions,” he said. “It shows that clean electricity is both possible and profitable.”

“Benchmarking Air Emissions of the 100 Largest Electric Generation Owners in the U.S.– 2000” was published by the Coalition for Environmentally Responsible Economies (CERES), a national coalition of environmental and investor groups, in collaboration with the Natural Resources Defense Council (NRDC) and New Jersey-based utility Public Service Enterprise Group (PSEG). The report follows and parallels two previous reports that examined 1995 and 1996 electric industry air pollutant emissions. Like the previous reports, this one provides comparison rankings for evaluating corporate total emissions (tons) and average emissions rates, expressed in pounds per megawatt-hour. (The SO2 emissions and emissions rates are based on actual physical emissions — not accounting for emissions allowances purchased or sold.)

In gross terms, the largest polluters also were the companies with the most power plants and that generate the most electricity. The three largest U.S. electricity companies, American Electric Power (AEC), the Southern Co. and the Tennessee Valley Authority (TVA), together accounted for 17-24% of total industry emissions of the four pollutants tracked in the study. Relative pollution levels vary according to the types of power plants, with natural gas and nuclear fuel plants producing relatively smaller pollutant levels than those companies with mostly coal-fired plants.

Ranking companies based on the amount of pollution produced relative to their power output puts Basin Electric Power Cooperative, a small utility in Bismarck, ND, at the top. Basin relies primarily on coal-fired plants to supply more than 100 rural electric co-ops, and it is the leading emitter of CO2/MWh.

“This information helps us understand how our environmental performance compares to our competitors,” said Mark Brownstein, PSEG director of environmental policy and strategy. “Frankly, some of the data in the report convinced us that we have work to do, and was a factor in our decision to make significant additional environmental investments in our coal units in New Jersey.”

PSEG was ranked in the top 25 of companies with the highest rate of SO2 emissions. PSEG reached a settlement in January with EPA that requires the company to invest more than $300 million in the next 10 years to reduce emissions from its coal-fired plants in New Jersey (see Power Market Today, Jan. 25).

There are several proposals now being debated that would require plants to reduce air emissions. Last month, President Bush proposed an emissions reduction program for mercury, NOx and SO2, with a separate voluntary reduction program for CO2. A “four-pollutant” bill sponsored by Sen. James Jeffords (I-VT) would require reduction programs for all four pollutants, including CO2. PSEG, along with members of an industry coalition called the Clean Energy Group, also is advocating a comprehensive, four-pollutant proposal for federal legislation. Also, EPA is considering proposals to substantially revise or eliminate the New Source Review provisions of the federal Clean Air Act requiring utilities and other emitters to update pollution prevention equipment when modifying the facility.

According to the authors, the new report “provides context to the internal debate within the electric industry on how best to balance business interests while delivering needed emission reductions.” It said, “since most power plant investment decisions involve emissions creation or reduction, and power plants tend to last well over 30 years, small changes in corporate behavior can have significant implications for environmental quality over time.”

Noting that the United States had the second highest electricity consumption per capita in the world (behind Canada), more than 600 companies own power plants to generate electricity to meet the demand. However, “significant emissions rate disparities continue to exist in the electric industry, illustrating potential inequities in existing regulations and the ability of some companies to generate electricity with substantially lower-by-product air emissions than others.”

Dan Lashof, science director of NRDC’s Climate Center, said, “the high emission levels of many companies and the vast differences in emission rates among companies demonstrate the need for comprehensive power plant pollution clean-up legislation.” He believes that the Senate’s proposed Clean Power Act would “deliver the pollution reductions the public has a right to expect, while creating a level playing field for increasingly competitive electricity generators.”

CERES plans to mail the report to the CEOs of all the 100 companies named, with an invitation to participate in a series of “utility dialogues” on emissions reductions. The year-long debate would include companies, investors and environmental organizations, and would recommend financial incentives specifically to reduce CO2 emissions.

“In the wake of Enron, investors are anxious to have as much information as possible to hep assess a company’s worth and liability,” said Robert Massie, CERES executive director. “Air pollutant emissions are one of the most measurable, relevant and significant indicators of risk for this particular industry, while climate change could pose the single most devastating economic impact economy-wide. We know these emissions are harmful, and we can require their elimination over time in a way that’s fair to the entire industry. This is the piece of the puzzle that’s been missing.”

To read the entire report, visit CERES’ web site at www.ceres.org.

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