Legislation pending on Capitol Hill that seeks to cut emissions of power plant pollutants would force electric utilities to jumpstart a “massive construction effort” in order to meet the compliance timeframe included in the measure, Gerard Anderson, president of DTE Energy Resources, told a Senate panel last Thursday. That construction effort, in turn, would hike the cost of power and in many regions impact the reliability of the overall electric grid, Anderson said.

At issue is legislation sponsored by Sen. Jim Jeffords (I-VT) that intends to dramatically cut aggregate power plant emissions of nitrogen oxides, sulfur dioxide, mercury and carbon dioxide by 2007. Under the measure, S. 556, nitrogen oxides would be slashed by 75%, sulfur dioxide emissions would be reduced by 87% and mercury emissions would be lowered by 90% from 1997 levels. Carbon dioxide emissions would be cut to 1990 levels. Jeffords is chairman of the Senate Environment and Public Works Committee.

Anderson, appearing before a hearing held by the panel last week, noted that the Edison Electric Institute (EEI) has developed a set of criteria that the association believes should underlie a multi-emissions approach.

Specifically, EEI believes that fuel diversity should be maintained for generating electricity, Anderson noted. “Coal is currently the backbone of our electricity production in this country, accounting for 50 to 55% of all electricity in our nation,” the DTE Energy executive added.

Another principle supported by EEI is that maximum flexibility should be provided to achieve emission reductions. “This bill, in our estimation, takes a step backward in terms of the need for regulatory flexibility and efficiency,” Anderson said.

“In addition to the stringent emission caps mandated by the bill, it also introduces a new concept, modernization, which would require every single power plant to install the most stringent controls,” the utility executive continued. “Many power plants would be forced to shut down due to the cost of emission control retrofits.”

Anderson also said the legislation requires “extreme levels” of reduction in mercury emissions, while explicitly excluding the trading of mercury. “Rejecting mercury trading does not make sense,” he said, arguing that such a move will “substantially increase” compliance costs.

EEI also believes that adequate time for compliance must be provided, according to Anderson. “Compliance within the timeframe set forth in this bill would leave companies like mine no choice but to begin a massive construction effort, essentially immediately.”

That, in turn, would have two practical consequences. “The first is that the ability for technology innovations to come into play would be all but eliminated,” Anderson told the Senate committee. “Second, the scale of the construction effort required by this bill would require large numbers of our power plants to be off-line for long periods of time,”he added.

“Put very simply, the required construction effort would dwarf anything our industry has seen previously,” the DTE Energy official went on to say. “This would certainly increase the cost of power and in many regions, I believe, would severely impact the reliability of the overall electric grid as well.”

Meanwhile, Jeffords used last week’s hearing to flesh out the timing on mark up for his bill. Specifically, Jeffords said that he thinks his bill is on track for a mark-up in the first part of February. “That’s my goal,” he said. The senator noted that such a timeframe “should give our staff plenty of time to work out all the details for a smooth mark up.”

Rep. Sherwood Boehlert (R-NY), one of the lead sponsors of companion legislation to S. 556 in the House of Representatives, earlier this month said that the chances of further House action on the measure were diminishing by the day. However, Boehlert also expressed optimism that the House will be able to advance the legislation sometime next year.

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