[Congressional Record Volume 144, Number 141 (Friday, October 9, 1998)]
[Senate]
[Pages S12177-S12178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LIEBERMAN (for himself, Mr. Dodd, Mr. Kerry, Mr. 
        Lautenberg, and Mr. Torricelli):
  S. 2610. A bill to amend the Clean Air to repeal the grandfather 
status for electric utility units; to the Committee on Environment and 
Public Works.


                  the clean electric power act of 1998

  Mr. LIEBERMAN. Mr. President, I am pleased to introduce today the 
Clean Electric Power Act of 1998, and to be joined by my colleagues 
Senators Dodd, Kerry, Lautenberg, and Torricelli.
  This legislation would address a gap in the Clean Air Act that 
exempts older power plants from strict environmental standards, 
allowing them to emit more pollutants than newer facilities and 
contributing to serious environmental problems. This disparity is of 
particular concern right now as we enter the new world of restructuring 
of the electric utility industry--a world that was never envisioned at 
the time of any of the Clean Air Act Amendments, including the 1990 
Amendments. Because most of the older plants don't have to expend the 
same amount of money on environmental controls that newer plants do, it 
is simple economics that these older plants will benefit under 
deregulation by increasing their generation of power and, therefore, 
their emissions of dangerous pollutants into the air. This situation is 
unfair to utilities that generate electricity while meeting stricter 
environmental standards, and it is unfair to the public whose health 
will be endangered.
  Electricity deregulation carries the promise of enormous benefits for 
the consumer in terms of reduced electric bills which I strongly 
support. But unless we do it right, electricity deregulation also can 
result in significant adverse environmental and public health effects. 
Some of the early results from the initial efforts at deregulation of 
wholesale power sales, as well as studies containing projections about 
what might occur, are very disturbing:
  In February, EPA projected increases of 553,000 tons of nitrogen 
oxides and 62 million tons of carbon by the year 2010 resulting from 
restructuring, without provisions in restructuring legislation to 
address pollution increases.
  THe Northeast States for Coordinated Air Use Management in January 
1998 found that several large Midwestern power companies substantially 
increased their wholesale electricity sales between 1995 and 1996. This 
meant substantially increased generation at several of the companies' 
highest polluting coal-fired power plants, large increases in the flow 
of power from the Midwest towards the east, and substantial increases 
in emissions from power plants.
  A 1995 Harvard University Study concluded that electricity 
restructuring could adversely affect environmental quality for a number 
of reasons, including increasing utilization of older, higher emitting 
coal facilities.
  A 1996 Resources for the Future Study examined the regional air 
pollution effects that could result from a more competitive market. The 
study concluded that in the year 2000, the Nation's NOX 
emissions would increase by about 350,000 tons and the carbon dioxide 
emissions would increase by about 114 million tons.
  Let me give a little background about how we got to where we are.
  A series of requirements in the 1970 and 1977 Clean Air Act and 
amendments thereto required that utility plants meet new source 
performance standards for pollutants, including nitrogen oxides and 
sulfur dioxide. The act defines these standards as emissions limits 
reflecting the degree of emission limitation achievable through the 
application of the best system of emission reduction, taking into 
account cost, as determined by the Administrator. However, these 
standards were only imposed on new generating plants, and did not cover 
existing plants, plants under construction, or in the permitting 
process or being planned for, unless they undertook major construction.
  At the time, the view was that it would be more cost-effective to 
impose stricter standards on new facilities than existing ones, and 
that many of the existing facilities would be retiring soon. But for a 
number of economic reasons, the anticipated retirement of plants did 
not occur. More than half of the power plants operating today were 
built before the new source standards went into effect.
  My legislation would require that power plants that generate 
electricity that flows through transmission or connected facilities 
that cross State lines comply with the stricter environmental 
standards. It would also require EPA to set up a market-based allowance 
trading program to allow utilities to comply in the most cost-effective 
manner.

  Electric power generating plants are among the largest sources of air 
pollution in the United States. According to EPA reports, power plants 
account for 67 percent of all sulfur dioxide emissions, 28 percent of 
all nitrogen oxide emissions, 36 percent of all carbon dioxide 
emissions and over 33 percent of mercury emissions. These pollutants 
contribute significantly to some of the most urgent public health and 
environmental problems in the United States, including smog, fine 
particles acid rain, excessive nutrient loads to important water bodies 
such as Long Island Sound, toxic impacts on health and ecosystems from 
mercury emissions, climate change, and nitrogen saturation of sensitive 
forest ecosystems.
  This is not to say that older plants do not have any pollution 
controls. Some controls are required on these plants under older 
standards, State Implementation Plans, and the requirements under the 
acid rain provisions of the Clean Air Act Amendments of 1990. But in 
many cases, the controls fall far short of levels that would be 
achieved under the new source performance standards. Some studies show 
that the older plants emit pollutants at rates that are often four to 
ten times higher than the cleanest operating plants, but there is 
significantly less disparity in areas where states have imposed tighter 
controls under the State Implementation Plans, state laws or regional 
programs such as California and parts of the Northeast. In addition, 
EPA's new regulation requiring 22 states to reduce 
NOx emissions will result in significant reductions at many 
power plants. The bill makes clear that nothing affects the obligations 
of sources to comply with that new regulation in the timeframe set 
forth by EPA or to comply with any other provision of the Clean Air 
Act.
  But we still have a situation where there is currently an 
unacceptably high level of power plant emissions and, in many cases, a 
disparity in emission requirements between different generators. On top 
of this, we have a new era of electricity deregulation and 
restructuring which we are entering at a rapid pace; in the foreseeable 
future, retail consumers all over the country may be able to choose 
their supplier of electricity. As I've noted, this era of deregulation 
was never envisioned at the time of either the 1977 Clean Air Act 
Amendments or the more recent 1990 Amendments. Increasing competitive 
markets provide opportunities for relatively low cost generators to 
increase generation; where cost differentials are due in part to 
differences in emission standards this will mean increases in 
generation at the highest emitting plants.
  Mr. President, the good news is that cost-effective technologies are 
available to meet these stricter standards. For example, the Northeast 
States for Coordinated Air Use Management and the Mid-Atlantic Regional 
Air Management Association have recently completed a report on the 
availability of controls for NOx and the cost-effectiveness 
of those controls. The report shows that a number of advanced emissions 
control technologies are available that can reduce NOx 
emissions from utilities by 85 percent or more, and that these controls 
are not only feasible but are highly cost-effective. The report looked 
at real world experience with the application of available technology 
at 19 coal fired facilities

[[Page S12178]]

and found that NOx emissions nearly 50 percent stricter than 
EPA's new standard for NOx can be achieved at the vast 
majority of coal utilities. Of course, under the bill grandfathered 
utilities would have the option of purchasing allowances as an 
alternative method of meeting the performance standards.
  Mr. President, as we enter the era of deregulation we have a unique 
opportunity to provide great benefits for the consumers and reduce air 
pollution, which I strongly support. But we need to ensure that proper 
pollution safeguards are in place to rectify the current disparity in 
standards and to ensure that air pollution does not increase in a 
competitive market.
  Mr. President, I ask unanimous consent that the full text of my 
legislation be included in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2610

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. STANDARDS OF PERFORMANCE FOR ELECTRIC UTILITY 
                   UNITS.

       (a) Findings.--Congress finds that--
       (1) older electric utility units are exempt from strict 
     emission control requirements applicable to newer facilities, 
     allowing some older units to emit greater quantities of 
     dangerous pollutants;
       (2) this disparity in regulatory treatment is of particular 
     concern in the new era of electric utility restructuring, 
     which was never envisioned at the time of enactment of the 
     Clean Air Act (42 U.S.C. 7401 et seq.) or amendments to that 
     Act;
       (3) in an era of electric utility restructuring, utilities 
     that spend less money on environmental controls will be able 
     to increase their generation of power and emissions of 
     dangerous pollutants;
       (4) this situation results in an unfair competitive 
     disadvantage for utilities that generate electricity while 
     meeting strict environmental standards; and
       (5) electricity restructuring can result in enormous 
     benefits for consumers and the environment if done right.
       (b) Standards.--Section 111 of the Clean Air Act (42 U.S.C. 
     7411) is amended by adding at the end the following:
       ``(k) Standards of Performance for Electric Generating 
     Units.--
       ``(1) Definition of grandfathered unit.--In this 
     subsection, the term `grandfathered unit' means a fossil 
     fuel-fired electric utility unit that, before the date of 
     enactment of this subsection, was not subject to the 
     standards of performance set forth in subpart D of part 60 of 
     title 40, Code of Federal Regulations, or to any subsequently 
     adopted standard of performance under this section applicable 
     to fossil fuel-fired electric utility units.
       ``(2) Applicability.--Notwithstanding any other provision 
     of law, in the case of a fossil fuel-fired electric utility 
     unit, a standard of performance under this section that 
     applies to new or modified electric utility units shall also 
     apply to a grandfathered unit that--
       ``(A) has the capacity to generate more than 25 megawatts 
     of electrical output per hour; and
       ``(B) generates electricity that flows through transmission 
     or connected facilities that cross State lines (including 
     electricity in a transaction that for regulatory purposes is 
     treated as an intrastate rather than an interstate 
     transaction).
       ``(3) Deadlines for compliance.--Each grandfathered unit 
     shall comply with--
       ``(A) a standard of performance established under this 
     section before the date of enactment of this subsection, not 
     later than 5 years after the date of enactment of this 
     subsection; and
       ``(B) a standard of performance established under this 
     section on or after the date of enactment of this subsection, 
     not later than 3 years after the date of establishment of the 
     standard.
       ``(4) Alternative compliance.--
       ``(A) In general.--To provide an alternative means of 
     complying with standards of performance made applicable by 
     this subsection, the Administrator shall--
       ``(i) establish national annual limitations for calendar 
     year 2003 and each calendar year thereafter for each 
     pollutant subject to the standards at a level that is equal 
     to the aggregate emissions of each pollutant that would 
     result from application of the standards to all electric 
     utility units subject to this section;
       ``(ii) allocate transferable allowances for pollutants 
     subject to the standards to electric utility units subject to 
     this section in an annual quantity not to exceed the 
     limitations established under clause (i) based on each unit's 
     share of the total electric generation from such units in 
     each calendar year; and
       ``(iii) require grandfathered units to meet the standards 
     by emitting in any calender year no more of each pollutant 
     regulated under this section than the quantity of allowances 
     that the unit holds for the pollutant for the calendar year.
       ``(B) Calculation of limitations.--In calculating the 
     limitations under subparagraph (A)(i), the Administrator 
     shall apply the standard for the applicable fuel type in 
     effect in calendar year 2000.
       ``(5) No effect on obligation to comply with other 
     provisions.--Nothing in this subsection affects the 
     obligation of an owner or operator of a source to comply 
     with--
       ``(A) any standard of performance under this section that 
     applies to the source under any provision of this section 
     other than this subsection; or
       ``(B) any other provision of this Act (including provisions 
     relating to National Ambient Air Quality Standards and State 
     Implementation Plans).''.
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