Coal-fired power in a restructured electricity market

Duke Environmental Law and Policy Forum

Volumn 15, Issue 2, 2005, Pages 187-220

  Spence, David B ^a  

^a UNIVERSITY OF TEXAS AT AUSTIN   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

COAL; ELECTRICITY GENERATION; ENERGY MARKET; POLLUTION CONTROL;

EID: 27944497159     PISSN: 10643958     EISSN: 10643958     Source Type: Journal    
DOI: None     Document Type: Review

References (220)

1. Environmental Protection Agency, Particulate Matter, Chief Causes of Concern, at http://www.epa.gov/air/urbanair/pm/chf.html (last modified Dec. 20, 2004).
2. Environmental Protection Agency, Mercury Emissions and Electric Utilities, at http://www.epa.gov/ttn/oarpg/t3/fact_sheets/hg17th.pdf (Feb. 24, 1998).
3. Environmental Protection Agency, Sulfur Dioxide, Chief Causes of Concern, at http://www.epa.gov/air/urbanair/so2/chfl.html (last modified Dec. 20, 2004).
4. Environmental Protection Agency, NOx - How Nitrogen Oxides Affect the Way We Live and Breathe, available at http://www.epa.gov/air/urbanair/ nox/index.html (last updated Feb. 18, 2005).
5. Intergovernmental Panel on Climate Change, Climate Change 2001: The Scientific Basis, at http://www.grida.no/climate/ipcc_tar/wg1/index.htm (arguing that while there remains a healthy debate about the effects of global warming and the proper regulatory response, if any, there is something approaching consensus in the scientific community about the conclusion that human activity is hastening the rate of warming, in part through coal combustion.
6. For a good summary of the science of global warming, see Chapter 4, at http://www.grida.no/climate/ipcc_tar/wg1/127.htm.
7. See Barbara Freese, Coal: A Human History 148-56 (2003) (stating that this was particularly true where dirtier burning bituminous coal and lignite were used). The 1902 [coal] strike served to emphasize how the nation had divided into clean anthracite cities like New York, Philadelphia, and Boston, and dirty bituminous ones, like Pittsburgh, Chicago, St. Louis, Cincinnati, and Birmingham. In New York City, as the strike induced shortage caused anthracite prices to rise, more and more coal users turned to bituminous, violating city laws and alarming residents. *** Pure atmospheres were something most bituminous cities had not seen, and would not see, for a very long time.
8. Id. at 148-49.
9. The fog was the product of a temperature inversion that trapped pollutants from fossil fuel combustion (including coal) near the ground for several days. Freese, supra note 6, at 167-68.
10. Id.
11. Energy Information Administration, International World Energy Outlook, 2004, at http://www.eia.doe.gov/oiaf/ieo/electricity.html (last modified May 24, 2004) (stating that coal is projected to continue to retain the largest market share of electricity generation, but its importance is expected to be moderated somewhat by a rise in natural gas use).
12. Clean Air Act of 1970, 42 U.S.C. §§ 7401-49 (2000).
13. See e.g., Section 109 of the Clean Air Act, 42 U.S.C. § 7409 (2000) (obligating EPA to establish NAAQS for sulfur dioxide and nitrogen oxides).
14. 42 U.S.C. § 7409(a) requires NAAQS for all pollutants "for which air quality criteria have been issued prior to" December 31, 1970, a group that included sulfur dioxide;
15. and 42 U.S.C. § 7409(c), added in 1977, requires NAAQS for nitrogen oxides. See also remarks of Rep. Quillen in floor debate over the 1970 Act, 91 Cong. House Debates 1970; CAA70 Leg. Hist. 8.
16. 42 U.S.C. § 7409(b) (2000) (stating that NAAQS represent the maximum concentrations of these conventional pollutants in the outdoor air that EPA has determined will protect public health with an adequate margin of safety.)
17. 42 U.S.C. § 7409(C) (mandating a NAAQS for nitrogen oxidees.)
18. 42 U.S.C § 7407 (2000) (defining the geographic units by which compliance with NAAQS are measured.) Section 107 of the Act defines and describes the creation of air quality control regions.
19. Id.
20. 42 U.S.C. § 7407(d)(1)(A)(i) (2000). The Clean Air Act classifies all air quality control regions as either "attainment" or "non-attainment" areas for each conventional pollutant, depending upon whether the region is meeting the federal standard.
21. Environmental Protection Agency, Nonattainment Areas Map - Criteria Air Pollutants, at http://www.epa.gov/air/data/ nonat.html?us~USA~United%20States (last modified Dec. 16, 2004) (stating that as of this writing, a mere 13 counties in the United States are "nonattainment" (i.e., out of compliance with) for the sulfur dioxide standard, while 57 counties (mostly in the west) are nonattainment for particulate matter and more than 400 counties are nonattainment for the ozone standard.). This represents considerable improvement since the 1970s and 80s, particularly with respect to sulfur dioxide and particulates.
22. See infra notes 40-44 and accompanying text for a description of these emissions reductions since 1970.
23. See, e.g., National Acid Precipitation Assessment Program, Report to Congress (1990) (finding that a debate among scientists and policymakers through the 1980s produced a scientific consensus supporting the notions that sulfur dioxide contributes to acid rain, and that acid rain acidifies lakes and damages vegetation).
24. For a discussion of the 1990 amendments and the acid rain program, see infra notes 54-57 and accompanying text.
25. 42 U.S.C. §§ 7651-51o (2000) (outlining program in which acid rain allowances - each representing the right to emit one ton of sulfur dioxide in a calendar year - are bought and sold on several public commodities exchanges).
26. For a description of the program, including a description of market activity in the allowance market, see Environmental Protection Agency, Acid Rain Program, at http://www.epa.gov/airmarkets/arp/ (last modified Apr. 14, 2004).
27. 2: What is it? Where Does it Come From?, at http://www.epa.gov/air/urbanair/so2/what1.html (last modified Dec. 20, 2004).
28. Environmental Protection Agency. NOx: What is it? Where Does it Come From?, at http://www.epa.gov/air/urbanair/nox/what1.html (last modified Feb. 18, 2005). Power plants are the second leading producer category, after automobiles, which accounts for 55 percent.
29. Id.
30. For a discussion of regulatory initiatives in the United States and under the Kyoto Protocol on Global Warming, see infra notes 121-130 and accompanying text.
31. The principal greenhouse gases are carbon dioxide, nitrous oxide, methane, and various fluorocarbons. Their presence in the atmosphere helps trap heat near the earth's surface by inhibiting the radiation of heat from the sun back into space. See Intergovernmental Panel on Climate Change, supra note 5.
32. Environmental Protection Agency, Global Warming- Emissions, at http:// yosemite.epa.gov/oar/globalwarming.nsf/content/emissionsindividual.html (last modified Jan. 7, 2000).
33. Environmental Protection Agency, Frequently Asked Question About Mercury, at http://www.epa.gov/mercury/faq.htm (last modified Jan. 19, 2005) (stating that coal-fired power plants represent 40 percent of mercury emissions in the United States.)
34. See Notice of Regulatory Findings, 65 Fed. Reg. 79,825-01 (Dec. 20, 2000) (announcing first EPA findings of dangers of mercury emissions from coal-fired power plants).
35. Environmental Protection Agency, Frequently Asked Question About Mercury, at http://www.epa.gov/mercury/faq.htm (last modified Jan. 19, 2005) (stating that as part of this process, microorganisms convert it to methylmercury, a highly toxic form of mercury).
36. Environmental Protection Agency, Frequently Asked Question About Mercury, at http://www.epa.gov/mercury/faq.htm#4 (last modified Jan. 19, 2005) (stating "[t]he effects of mercury exposure can be very severe, subtle, or may not occur at all, depending on the factors above. Mercury can affect the nervous system. Because fetuses, infants, and children are still developing, they are particularly sensitive to the effects of methylmercury on the nervous system. People are mainly exposed to methylmercury, an organic compound, when they eat fish and shellfish that contain methylmercury.").
37. Energy Information Administration, Electric Power Monthly, available at http://tonto.eia.doe.gov/ftproot/electricity/epm/02260410.pdf (Oct. 2004).
38. Coal is plentiful in the United States, unlike oil. It is easy to store, unlike natural gas. And it can be transported from its extraction point to its point of use by rail, without nearly as much additional processing as is required for oil and natural gas.
39. See Todd L. Cherry & Jason Shogren, The Social Cost of Coal. A Tale of Market Failure and Market Solution (Sept. 30, 2002), available at http://www.business.appstate.edu/departments/economics/papers/wp0105.pdf (discussing the non-economic costs of coal and comparing these to the economic expenses).
40. Energy Information Administration,, Electric Power Annual 2002, available at http://tonto.eia.doe.gov/FTPROOT/electricity/034802.pdf (Dec. 2003).
41. 42 U.S.C. § 7410(j) (2000).
42. The issue of when a source of pollution is a "new" source is discussed at length, infra, at section III. See also supra note 87.
43. The Act distinguishes stationary sources, like factories or power plants, from mobile sources, like cars and trucks. The term "stationary source" is defined in Section 111(a)(3) of the Act, 42 U.S.C. § 7411(a)(3) (2000).
44. EPA delegates permitting authority under the Clean Air Act to the states. 42 U.S.C. § 7410(a)(2)(c) (2000) ("Each [state implementation plan] shall include ... a program to provide for the ... regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved, including a permit program...");
45. and 42 U.S.C. § 7411(d) (2000) (requiring state permitting of major new sources).
46. These so-called "technology based standards" differ depending upon whether the plant is located in an attainment or nonattainment area for the pollution in question. In attainment areas, the emissions limitation must reflect the "best available control technology," 42 U.S.C. § 7475(a)(4) (2000).
47. In nonattainment areas, the limitation must reflect the "lowest achievable emissions rate," 42 U.S.C. § 7503(a)(2) (2000).
48. That is, what is "best available" or "lowest achievable" changes over time. Permit writers have access to information about emissions limits contained in permits issued to similar facilities, and may use that information as well as other information about pollution control technology to determine the level of emission control that meets the statutory standard in question.
49. These backstop limitations are found in EPA's "new source performance standards," which are minimum emissions limitations for new sources within particular industrial categories. Section 111 of the Act directs EPA to issue these standards, 42 U.S.C. § 7411 (2000).
50. According to EPA, emissions of sulfur dioxide have declined from 31.2 million tons per year in 1970 to 15.8 million tons per year in 2003, Environmental Protection Agency, National Air Pollution Emission Estimates for Conventional Pollutants, available at http://www.epa.gov/ airtrends/econ-emissions.html (last modified Feb. 14, 2005).
51. These data are based on particles of 10 microns in size, also known as "PM10." EPA's particulate matter NAAQS dates back to the 1970s. The agency promulgated a fine particle standard covering particles 2.5 microns in size ("PM2.5"), in the 1990s. EPA does not have historical emissions data for PM2.5. See Environmental Protection Agency, Summary of EPA's Strategy for Implementing New Ozone and Particulate Matter Air Quality Standards, available at http:// www.epa.gov/ttn/oarpg/naaqsfin/impfac.html (July 17,1997).
52. Emissions of particulates have declined from 12.2 million tons per year in 1970 to 2.3 million tons per year in 2003. See Environmental Protection Agency, National Air Pollution Emission Estimates for Conventional Pollutants, supra note 40.
53. Emissions of nitrogen oxides have declined from 26.9 million tons per year in 1970 to 20.5 million tons per year in 2003. See Id.
54. See Public Interest Research Group, Defending Our Air: An Overview, at http://cleanairnow.org/cleanairnow.asp?id2=9757&id3=cleanairnow& (last visited Mar. 10, 2005);
55. NRDC, Press Release, NRDC Blasts Bush Plan to Increase Reliance on Coal; Group Says Increased Coal Burning Will Accelerate Global Warming, at http://www.nrdc.org/media/pressReleases/010702a.asp (July 2, 2001).
56. See also David Aftandilian, Dying For Power: Clear Skies and Dirty Coal Plants, Conscious Choice, at http://www.consciouschoice.com/note/ note1506.html (June 2002) (calling coal-fired power plants a continuing "threat to public health").
57. See, e.g., Patrick Parenteau, Anything Industry Wants: Environmental Policy under Bush II, 14 Duke Envtl. L. & Pol'y F. 363, 368 (2004).
58. See Robert W. Hahn, The Politics and Religion of Clean Air, 13 Regulation, available at https://www.cato.org/pubs/regulation/ reg13n1-hahn.html (last visited Mar. 2, 2005).
59. See also R. Shep Melnick, Strange Bedfellows Make Normal Politics: An Essay, 9 Duke Envtl. L. & Pol'y F. 75, 90-91 (1998).
60. See Dennis D. Hirsch Globalization, Information Technology, and Environmental Regulation: An Initial Inquiry, 20 Va. Envtl. L.J. 57, 69-70 (2001)("In coming to the decision not to require existing plants to retrofit, Congress reasoned that pollution controls can be installed more efficiently when plants are constructed, rather than later.").
61. 42 U.S.C. § 7411(a)(2) (2000) (emphasis added). For a fuller discussion of the application of new source standards to "modified" older sources, see infra section III.
62. David B. Spence, Politics Versus Law in Regulatory Permitting (forthcoming, 2005) (stating that a review of the permit emissions limits for coal-fired power plants over the last two decades reveals that the NOx and particulate matter emissions limitations imposed on plants whose permits do not reflect federal new source standards are, on average, several orders of magnitude higher than those reflecting new source standards).
63. This prohibition is found in Section 110 of the Act, which requires states to develop plans for achieving and maintaining compliance with NAAQS (known as "state implementation plans," or "SIPs"). 42 U.S.C. § 7410(a)(2)(D) (2000): Each implementation plan ... shall ... contain adequate provisions... prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard ...
64. See 42 U.S.C. § 7426 (2000).
65. Section 126 grants the petitioning power to "any State or political subdivision," who "may petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of [Section 110's prohibition against causing NAAQS violations in other states]." 42 U.S.C. § 7426(b) (2000). This section also makes clear that the possession of a valid permit by upwind sources is no shield to liability under this section: Notwithstanding any permit which may have been granted by the State in which the source is located... it shall be a violation of this section ... for any major proposed new (or modified) source with respect to which a finding has been made under subsection (b) [of this section] to be constructed or to operate in violation of the prohibition of section 110 (a)(2)(D)(ii) [of this title]...
66. 42 U.S.C. § 7426(C) (2000).
67. Courts established difficult to meet thresholds for making the finding required under Section 126(b). See, e.g., Connecticut v. EPA, 696 F.2d 147 (2d Cir. 1982) (requiring that the upwind source be responsible for at least 5 percent of emissions in the downwind community).
68. Acid rain precursors SO2 and NOx can travel long distances and return to the ground in dry form, thereby contributing to violations of SO2 and ozone NAAQS, respectively. But when they fall in liquid form, the damage they do to lakes and vegetation does not contribute to a NAAQS violation, and therefore cannot be addressed by the process described in sections 110 and 126.
69. See 42 U.S.C. §§ 7651-7651a (2000) (Title IV of the Clean Air Act).
70. See 42 U.S.C. § 7651 (2000) (The acid rain program will reduce sulfur dioxide emissions from covered plants by more than 50 percent).
71. See 42 U.S.C. § 7651b(a)-(b) (2000) (describing the system of allocating annual SO2 emissions allowances, and the trading system).
72. See also http://www.epa.gov/airmarkets/arp/ (summarizing data on the operation of the trading program to date) (last visited Apr. 15, 2005).
73. See State of Connecticut v. Browner, No. 98-1376 (S.D.N.Y., filed Feb. 25,1998) (Connecticut, Massachusetts, Maine, New Hampshire, New York, Pennsylvania, Rhode Island, and Vermont first submitted petitions to EPA under Section 126 of the Act seeking a finding that upwind states were violating the provisions of Section 110, which in turn prohibited states from allowing local emissions that caused NAAQS violations in another, downwind state. When action on the 126 petitions was not promptly forthcoming from EPA, the eight states filed a court action seeking the same remedy in federal district court. That suit was subsequently settled).
74. See generally Environmental Protection Agency, Regional Transport of Ozone: New Rule on Nitrogen Oxide Emissions (1998), available at http:// www.epa.gov/ttn/naaqs/ozone/rto/about_1.html
75. See supra note 58.
76. In its 1990 amendments to the Act, Congress had added Section 184, which added to the statute a regulatory structure within which EPA could study and address the problem of ozone transport. Specifically, section 184 created an ozone transport region in the eastern United States, and authorized the creation of an ozone transport commission to study the problem. 42 U.S.C. § 7511c (2000).
77. For a discussion of this chronology, see infra section II.A.
78. See infra sections II.A. and II.B.2 for a fuller description of this issue, its legal basis, and the changing interpretation of the relevant Clean Air Act provisions during the 1990s.
79. For toxic pollutants, the Section 112 of the Clean Air Act requires the imposition of emissions standards reflecting the "maximum achievable control technology," or "MACT." 42 U.S.C. § 7412d (2000). The Act defines MACT as: Emission standards promulgated under this subsection for existing sources in a category or subcategory may be less stringent than standards for new sources in the same category or subcategory but shall not be less stringent, and may be more stringent than - (A) the average emission limitation achieved by the best performing 12 percent of the existing sources (for which the Administrator has emissions information), excluding those sources that have, within 18 months before the emission standard is proposed or within 30 months before such standard is promulgated, whichever is later, first achieved a level of emission rate or emission reduction which complies, or would comply if the source is not subject to such standard, with the lowest achievable emission rate ... or (B) the average emission limitation achieved by the best performing 5 sources (for which the Administrator has or could reasonably obtain emissions information) in the category or subcategory for categories or subcategories with fewer than 30 sources.
80. Clean Air Act 112(d)(3), 42 U.S.C. § 7412(d)(3) (2000) (emphasis added). Note that for toxic pollutants, unlike conventional pollutants like SO2 and Nox, the Act's stringent permitting standards apply to new and existing sources of emissions.
81. See infra notes 115-124 and accompanying text for a fuller discussion of the scientific debate over the causes and consequences of global warming in the mid-1990s.
82. After the Rio Summit in 1992, the United Nations Environment Programme administered the United Nations Framework Convention on Climate Change, which eventually produced the Kyoto Protocol on climate change. See infra notes 115-124 and accompanying text.
83. 16 U.S.C. §§ 791-823c (2000).
84. The Federal Power Act requires that wholesale power purchase rates be "just and reasonable," a requirement that the FERC has traditionally enforced through rate cases. 16 U.S.C. § 824d(a): All rates and charges made, demanded, or received by any public utility for or in connection with the transmission or sale of electric energy subject to the jurisdiction of the Commission, and all rules and regulations affecting or pertaining to such rates or charges shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful.
85. See 66 PA. Cons. Stat. §§ 1301-12 (2000). Many state codes contain the same "just and reasonable" language as the Federal Power Act, along with guidelines for the state public utilities commission to conduct ratemaking proceedings. The Pennsylvania Code is fairly typical in this regard.
86. In rate cases, utility commissions typically make rate decisions using the following equation: R = Br + O, where R represents the company's total revenue requirements, B represents the rate base, r represents the permissible rate of return on investment, and O represents permissible operating expenses, Assets that are used and useful to the company's task of supplying electric service are includable within rate base, and are those on which the company is guaranteed a fair return. Most states treat any prudently made investment in such assets as properly includable in rate base.
87. See, e.g., 66 Pa. Cons. Stat. st§ 1501-02 (2000) (These obligations include the duty to provide reliable service to all qualified customers, rules against discrimination in the provision of the service, and more.).
88. See, e.g., Cal. Pub. Util. Code § 454.5(b)(9)(B)(11) (2005) (requiring utility power purchase plans to reflect "diversity of fuel supply");
89. N.H. Rev. Stat. Ann. § 362-A:1 ("It is found to be in the public interest to provide for small scale and diversified sources of supplemental electrical power to lessen the state's dependence upon other sources which may, from time to time, be uncertain.");
90. Iowa Utilities Board, Reliability: Emerging Competition in the Electric Power Industry A Staff Analysis (Docket No. NOI-95-1, Mar. 1999), at http://www.state.ia.us/government/com/util/docs/Restructuring/ reliability_rpt.pdf (last accessed Apr. 18, 2005)("A traditional "diversified generation portfolio" smoothes out any variations in load profiles, fuel prices (as long as these fuel prices are not directly correlated), and available capacity of transmission interconnections.").
91. While interruptions it the supply of coal seem unlikely, the political risk of interruptions - or significant increases in cost due to regulation - might be less unlikely.
92. Generation investments deemed by the public service commission to be "imprudent" can be, and sometimes are, excluded from the rate base, thereby reducing utilities' revenues correspondingly. The prudent investment standard was articulated in Justice Brandeis' seminal dissent in Southwestern Bell Telephone Co. v Public Service Comm'n, 262 U.S. 276 (1923).
93. For an illustrative discussion of the question of whether a very expensive plant investment was prudently made, and therefore includable within the rate base, see Duquesne Light Co, v. Barasch, 488 U.S. 299 (1988).
94. Throughout the 1980s and 1990s, state utilities' commissions and courts permitted companies to include expensive nuclear plants within rate base, sometimes on fuel diversification grounds.
95. See 16 U.S.C. §§ 2601-03 (2000). At the federal level, the Public Utilities Regulatory Policies Act of 1978 established a number of financial incentives for the development of "alternative" sources of power, including more efficient sources and renewables, like solar, wind, hydro, geothermal, and biomass power.
96. While the FERC has done little to encourage cleaner sources of power, state commissions have done quite a bit in this area. [Summary of PSC orders]
97. See Brent M. Haddad & Paul Jeferiss Renew, Forging Consensus on Nationalal Renewables Policy, 12 Electricity L.J. (1999) (describing renewable portfolio standards requiring retail sellers of power to secure a specified percentage of that power from renewable sources).
98. See Ralph C. Cavanagh, Least Cost Planning Imperatives for Electric Utilities and Their Regulators, 10 Harv. Envtl. Rev. 299 (1986) (describing integrated resources planning programs offering utilities a variety of financial incentives to consider the environmental costs of generation and to employ cleaner generation sources).
99. California's restructuring was commenced by California Assembly Bill 1890, enacted into law in 1996, available at http://www.leginfo.ca.gov/ pub/95-96/bill/asm/ab_1851-1900/ab_1890-bill_960924_chaptered.html (last accessed Apr. 18, 2005);
100. New York and Pennsylvania followed suit later that year: New York's Public Service Commission issued its Opinion and Order Regarding Competitive Opportunity for Electric Service, Opinion No. 96-12, Case 94-E-0952, (May 20, 1996);
101. and Pennsylvania's legislature passed its Electricity Generation Customer Choice and Competition Act, 66 Pa. Cons. Stat. § 2801 (2000).
102. Order 888: Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities. 75 FERC 61,080 (Apr. 24, 1996).
103. See California Assembly Bill 1890, supra note 79,
104. New York PSC, Opinion and Order Regarding Competitive Opportunity for Electric Service, supra note 79;
105. and Texas SB 7, now Tex. Util. Code Ann. §§ 39.001-39.050 (2004).
106. FERC's order 888 opened up wholesale market to competition by forcing owners of transmission lines to offer transmission service at nondiscriminatory terms. This made it much easier for wholesale buyers and wholesale sellers to transact business, since delivery of power was no longer an impediment to these transactions. Likewise, state restructuring programs treated the distribution grid in just the same way, permitting retail buyers to purchase power from new sellers, sellers who were previously prohibited from competing in the former incumbent utility's service area.
107. William G. Rosenberg, Restructuring the Electric Utility Industry and Its Effect on the Environment, 14 Pace Envtl. L. Rev. 69,73 (1996).
108. See, e.g., U.S. Public Interest Research Group Education Fund, Up in Smoke: Congress' Failure to Control Emissions from Coal Power Plants (1999) at 1-2: Deregulation of the wholesale power market helped increase the demand for power from existing coal-fired facilities, while simultaneously discouraging the construction of new, cleaner power plants. Retail deregulation is likely to compound this effect unless accompanied by strong environmental standards. available at http:// www.ewg.org/reports_content/upinsmoke/upinsmoke.pdf.
109. See also Union of Concerned Scientists, "Backgrounder" on Electricity Restructuring, at http://www.ucsusa.org/clean_energy/ renewable_energy/page.cfm?pageID=92 (describing a shift toward coal-fired power as a "likely result of some deregulation proposals").
110. See, e.g., Shi-Ling Hsu, Reducing Emissions from the Electricity Generation Industry: Can We Finally Do It?, 14 Tul. Envtl L.J. 427 (2001): Additional emissions reductions may be even more difficult to achieve in a deregulated U.S. energy environment. A market-driven energy environment will probably lower energy costs in the long run, but will probably offer little or no incentives for electricity generation firms to reduce or eliminate emissions. In particular, market conditions may push the renewable energy industries to the brink of extinction.
111. 14 Tul. Envtl. L.J. at 428 (citations omitted).
112. See also David Mallery, Clean Energy and the Kyoto Protocol: Applying Environmental Controls to Grandfathered Power Facilities, 10 Colo. J. Int'l Envtl L. & Pol'y 469 (1999) ("Recent deregulation of the electric utility industry significantly favors [grandfathered coal-fired power plants]");
113. Kirsten Engel, The Dorman Commerce Clause Threat to Market-Based Environmental Regulation: The Case of Electricity Deregulation, 26 Ecology L. Q. 243 (1999) ("Deregulation creates incentives to use cheaper, yet more polluting, coal ..");
114. );
115. Justin M. Nesbit, Note, Commerce Clause Implications of Massachusetts Attempt to Limit the Importation of "Dirty" Power in the Looming Competitive Retail Market for Electricty Generation, 38 B.C. L. Rev 811 (1997) (lamenting increased pollution in the northeast due to coal's "cost-competitive advantage"). Indeed, these concerns led the FERC to prepare an environmental impact statement ("EIS") in conjunction with Order 888, analyzing the environmental effects of restructuring. When it finalized Order 888, it summarized the key findings of the EIS as follows: The FEIS finds that the relative future competitiveness of coal and natural gas generation is the key variable affecting the impact of the Final Rule. If competitive conditions favor natural gas, the Rule is likely to lead to environmental benefits. Both EPA and the Commission staff believe this projected scenario is the more likely one. If competitive conditions favor coal, the Rule may lead to small negative environmental impacts.
116. 61 Fed. Reg. 21, 540, 21, 542 (May 10, 1996).
117. See Annual Report of the Council on Evnrionmental Quality, 1996, at http://ceq.eh.doe.gov/reports/1996/part1.pdf (reflecting the concern in EPA's dispute with FERC over the latter's analysis of the environmental impacts of restructuring in the EIS accompanying the FERC's restructuring rule, Order 888. This disagreement was referred to the Council on Environmental Quality in May of 1996, which reported that it was able to resolve the disagreements through negotiation).
118. See Michael, Kantro, Shall it Be Said that My Dusk Was in Truth My Dawn?, 25 Wm. & Mary Envtl. L. & Pol'y Rev. 533 (2000) (summarizing and analyzing the EPA-FERC dispute on air pollution effects of restructuring).
119. See Clean Air Act, 42 U.S.C. § 111(a) (2000) (defining a "new source" (to which new source permitting standards apply) to include sources which have been constructed or "modified").
120. See Clean Air Act, 42 U.S. C. § 7411 (a)(4) (2000) (defining modification to include: any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted).
121. 40 CFR 51.166(b)(2)(iii)(a). This section was subsequently repealed.
122. See Alabama Power v. Costle, 204 U.S. App. D.C. 51,200 (D.C. Cit. 1980)("the provisions concerning modifications indicate that this is not to constitute a perpetual immunity from all standards under the [new source review] program").
123. See Wis. Elec. Power Co. v. Reilly, 893 F.2d 901, 908 (7th Cit. 1990)("any physical change means precisely that"). There was also considerable EPA-generated confusion over when a physical change actually increases emissions. EPA sometimes made this determination by comparing the pre-change actual emissions (which could be far below the plant's potential emissions) with the post-change potential emissions (which could be far greater than the plant's actual emissions).
124. See Id. at 918 (The Wisconsin Electric court disapproving of EPA's application of the "potential to emit" test).
125. The Clinton EPA's retroactive application of a new interpretation of the statutory language raises possible due process issues. See Gen. Elec. Corp v. EPA, 53 F.3d 1324, 1328, 1333 (D.C. Cir. 1995) (holding that because "due process requires that parties receive fair notice before being deprived of property," EPA could not penalize General Electric for asserted regulatory violations when General Electric lacked "fair warning of [EPA's] interpretation of the regulations");
126. see also Shell Offshore Inc. v. Babbitt, 238 F.3d 622 (5th Cit. 2001) (concluding that because the Interior Department's change in the way it calculated offshore oil leases constituted a change in a longstanding interpretation of the Department's existing rules, the new policy required notice and comment). The boundaries of this prior notice rule are unclear, however. General Electric is in accord with some prior case law.
127. See, e.g., Energy West Mining Co., 17 FMSHRC 1313, 1317 (Aug. 995) (due process requires that a regulation give "fair warning of the conduct it prohibits or requires.")
128. (quoting Gates & Fox Co. v. Occupational Safety & Health Review Comm'n, 790 F.2d 154, 156 (D.C. Cir. 1986)).
129. See also Phelps Dodge Corp. v. Federal Mine Safety & Health Review Comm'n, 681 F.2d 1189, 1193 (9th Cir. 1982) (a regulation cannot be construed ""to mean what an agency intended but did not adequately express."')
130. (quoting Diamond Roofing Co. v. Occupational Safety & Health Review Comm'n, 528 F.2d 645, 649 (5th Cir. 1976)). However, one can argue that despite EPA's 1978 regulatory exemption, the statute itself is clear about what constitutes a modification, and that plant owners therefore did have fair notice of what the statute means. Furthermore, it is not clear how the GE decision and these lower court opinions fit the Supreme Court's Chenery rule, which seems to give agencies latitude to apply new interpretations retroactively without prior warning.
131. SEC v. Chenery Corp., 332 U.S. 194 (1947). While Chenery involved policies developed through adjudication rather than interpretive rulemaking, some commentators see the chenery trumping the General Electric rule even in the latter context, as long as the agency is not applying "quasi-criminal" sanctions for violating the new interpretation.
132. See, e.g., Harold J. Krent, Reviewing Agency Action for Inconsistency with Prior Rules and Regulations, 72 Chi.-Kent. L. Rev. 1187, 1222 (1997);
133. Albert C. Lin, Refining Fair Notice Doctrine. What is Reguired of Civil Regulations, 55 Baylor L. Rev. 991 (2003).
134. The judicial enforcement actions were filed against American Electric Power Co. (S.D. Ohio), Ohio Edison and First Energy (S.D. Ohio), Cinergy Corp. (S.D. Ind.), Southern Indiana Gas & Electric Co. (S.D. III.), Illinois Power Co. (S.D. Ind.), Southern Company affiliates including Alabama Power Co. and Georgia Power Co. (N.D. Ga.), Duke Power, and 7) Tampa Electric Co. (M.D. Fla.).
135. In re Tennessee Valley Authority, No. 00-6 (Envtl. App. Bd. Sept. 15., 2000), available at http://www.epa.gov/eab/disk11/tva.pdf.
136. One of the judicial enforcement actions was settled, with the defendant agreeing to make a variety of pollution control upgrades. See United States v. Tampa Elec. Co., No. 99-2524, CIV-T-23F (M.D. Fla., filed Nov. 3, 1999). With respect to the other judicial enforcement actions, the Bush Justice Department concluded that continuing these actions was "consistent with the Clean Air Act and its regulations."
137. See U.S. Justice Dept. Office of Legal Policy, New Source Review: An Analysis of the Consistency of Enforcement Actions With the Clean Air Act and Implementing Regulations.
138. White House, Report of the National Energy Policy Group (May 2001), at ch. 3 and app. 1, at http://www.whitehouse.gov/energy/ National-Energy-Policy.pdf.
139. Environmental Protection Agency, New Source Review Reform Rule, 67 Fed. Reg. 80,186 (Dec. 31, 2002). Whereas the old policy would treat any physical change that increased emissions as a "modification" triggering new source standards, the new policy would deem projects that represent capital spending of less than 20 percent of plant value to outside the scope of new source review.
140. This proposal took the form of the proposed Clear Skies Act, described infra at notes 128-129 and accompanying text.
141. See, e.g., Press Release, U.S. Dept. of Justice, U.S. Files Motion to Lift Stay in Alabama Power Litigation (Feb. 17, 2004).
142. The Justice Department has filed an additional new source review enforcement suit against a power Plant whose plant upgrades triggered new source review under the Bush Administration standards. See Press Release, U.S. Files Suit Against Eastern Kentucky Power Cooperative (Jan. 28, 2004), at http://www.usdoj.gov/opa/pr/2004/January/ 04_enrd_052.htm.
143. See also BNA, EPA to File New Lawsuits for Violations Of New Source Review, EP A Chief Says, 35 Env't. Rep. 158 (Jan. 23, 2004).
144. See States, Enviros Seek End Run Around Bush NSR Policy, Greenwire (July 29, 2004) (describing these suits against a wide variety of plant owners across several states).
145. Many of these suits adopt essentially the position advanced by the court in the wisconsin Electric case, supra note 91, that EPA cannot use regulation to change the plain meaning of a statutory term They argue that since gthe Clean Air Act defines a "modification" to include "any physical change," the Bush Administration's attempts to establish a size threshold for physical changes runs contrary to the statute.
146. West Virginia v. EPA, 362 F.3d 861 (2004).
147. See also BNA, Appeals Court Blocks EPA Implementation of Rule on Routine Maintenance Exemptions, 35 Env't. Rep. 5 (Jan. 2, 2004).
148. See National Ambient Air Quality Standards for Ozone; Final Rule, 62 Fed. Reg. 2 (July 18, 1997) (The existing standard was expressed in terms of a one-hour average limit. That standard was replaced by an 8-hour standard at a level of 0.08 parts per million (ppm), which was generally considered to be a more stringent standard).
149. This rule is known as the "NOx SIP Call," because it required states to submit revised "state implementation plans," or "SIPs" to describe how they planned to implement these additional restrictions on emissions of ozone precursors. Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone. 63 Fed. Reg. 57,356 (Oct. 27, 1998).
150. 63 Fed. Reg. 57,356 (Oct. 27, 1998) (setting forth that 22 covered states were required to have submitted plans for implementing the new requirements by May of 2004. and showing that the rule will cover NOx emissions from coal-fired electric generating units).
151. See Michael Janofsky, Clean Air Change is Built Into Bill, N.Y. Times, Apr. 15, 2005, at A1.
152. 42 U.S.C. § 7412(b)(2000).
153. See 42 U.S.C. § 7412(n)(1)(2000) (requiring that "the Administrator shall perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units of [toxic] pollutants... [and] a study of mercury emissions from electric utility steam generating units, municipal waste combustion units, and other sources....").
154. Specifically, the Sierra Club sued EPA for missing the statutory deadline for submitting its mercury report to Congress; the NRDC sued EPA for failing to include coal-fired power plants on its list of sources to be regulated under Section 112 of the Act. The suits were settled in 1994. For a short chronology of the dispute between EPA and environmental groups over regulation of mercury emissions from power plants, respectively, see Environmental Protection Agency, Controlling Power Plant Emissions: Decision Process and Chronology, at http:// www.epa.gov/mercury/control_emissions/decision.htm (last accessed Apr. 18, 2005),
155. and Sierra Club, Mercury and the Bush Administration: Making Matters Worse, at http://www.northstar.sierraclub.org/campaigns/air/mercury/ national.html (last accessed Apr. 18, 2005).
156. See Environmental Protection Agency, Mercury Study: Report to Congress (EPA-452/R-97-003, Dec. 1997) (evidencing an EPA study of the effects of mercury required by section 112(n)(1)(B) of the Act submitted to Congress on this issue in the late 1990s);
157. Environmental Protection Agency, Study of Hazardous Air Pollutant Emissions from Electric Steam Generating Units: Final Report to Congress (EPA-453/R-98-004a, Feb. 1998) (evidencing a second EPA study focusing specifically on power plant emissions, required by section 112(n)(1)(A) also submitted to Congress on this issue in the late 1990s).
158. Environmental Protection Agency, Mercury Study, supra note 109.
159. Environmental Protection Agency, Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units, 65 Fed. Reg. 79825, 79826 (Dec. 20, 2000) (stating "The Administrator shall perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units of [toxic] pollutants... [and] a study of mercury emissions from electric utility steam generating units, municipal waste combustion units, and other sources....").
160. Section 112 of the Act directs the EPA to regulate a long list of toxic emissions by industrial source category. EPA had not yet initiated regulations for coal-fired power plants under this section. The December 2000 notice committed EPA to doing so, triggering the imposition of strict MACT standards to such emissions. See infra note 64 for an explanation of MACT standards.
161. See 65 Fed. Reg. 79,825, 79,830 (Dec. 20, 2000) (stating there is no way to know precisely what emissions level this standard would have represented);
162. 65 Fed. Reg. 79,831 (Dec. 20, 2000) (stating EPA speculation about the pollution control methods that might have been required: "Potential strategies for controlling mercury and other HAP emissions include the use of: precombustion controls (e.g., fuel switching, coal switching, coal cleaning); combustion modification methods used to control NOX emissions; flue gas cleaning technologies that can be used to control emissions of criteria pollutants and HAP; and nontraditional controls such as demand side management and energy conservation).
163. See Environmental Protection Agency, Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources. Electric Utility Steam Generating Units; Proposed Rule, 69 Fed. Reg. 4,652 (Jan. 30, 2004) (proposing reversal of the Clinton EPA's earlier finding that regulating mercury emissions from coal-fired power plants under Section 112 was appropriate and necessary);
164. 69 Fed. Reg. 4,652, 4,686 ("There is considerable interest in an approach to mercury regulation for power plants that would incorporate economic incentives such as emissions trading. Such an approach can reduce the cost of pollution controls by allowing for least-cost solutions among a universe of facilities that face different control costs."). EPA finalized its proposed rule on March 15, 2005. A copy of the final rule can be found at http://www.epa.gov/air/mercuryrule/ pdfs/camr_final_preamble.pdf.
165. The scientific community had not reached a consensus on this point, but a strong majority of climatologists shared this view. The Intergovernmental Panel on Climate Change and the National Academy of Sciences reached this conclusion in the late 1990s.
166. See IPCC's Climate Change 2001: Working Group I: The Scientific Basis, ch. 10, at http://www.grida.no/climate/ipcc_tar/wg1/339.html (last assessed Feb. 27, 2005) (giving a fairly technical discussion of the uncertainty involved in making these projections).
167. Kyoto Protocol of the United Nations Framework Agreement on Climate Change, available at http://unfccc.int/resource/docs/convkp/kpeng.html (last accessed Mar. 2, 2005);
168. see also http://unfccc.int/files/essential_background/convention/ status_of_ratification/application/pdf/ratlist.pdf. (showing that the U.S. also signed the earlier United Nations Framework Agreement on Climate Change ("UNFCC") endorsing the general objective of reducing global warming).
169. The actual emission limitations imposed on the developed world are specified in Annex B to the agreement, and represent reductions of 5 to 8 percent below each nation's historical (1990) emissions levels. Kyoto Protocol To The United Nations Framework Convention On Climate Change, available at http://unfccc.int/resource/docs/convkp/kpeng.html.
170. See Memorandum, EPA's Authority to Regulate Pollutants Emitted by Electric Power Generation Sources (1998), from Jonathan Z. Cannon to Carol M. Browner, at http://www.law.umaryland.edu/faculty/bpercival/ casebook/documents/EPACO2memo1.pdf.
171. See Memorandum, EPA's Authority to Impose Mandatory Controls to Address Global Climate Change under the Clean Air Act, from Robert E. Fabricant to Marianne L. Horinko (Aug. 28, 2003), at http://www.eesi.org/ publications/Fact%20Sheets/co2petitiongcmemo8-28.pdf.
172. Several states sued EPA to try to force it to regulate carbon dioxide emissions under the act. Commonwealth of Massachusetts v. EPA, No. 03-1361 (D.C. Cir. Oct. 23, 2003).
173. More recently, eight states have brought nuisance claims against owners of coal-fired power plants, charging that their carbon dioxide emissions constitute a public nuisance. BNA, Eight States File Public Nuisance Suit Against Utilities for Carbon Dioxide Gases, 35 Env't. Rep. 1565 (July 23, 2004).
174. See Juliet Eilper, Administration Shifts on Global Warming, Wash. Pt., Aug. 27, 2004, at A19 (describing this evolution).
175. The agreement does too little because it does not obligate the developing world to reduce or even limit its greenhouse gas emissions. Critics say trends in the developing world - such as the explosive growth of the Chinese economy and coal-fired power production there, or the rapid deforestation in places like Brazil and Indonesia - will overwhelm any gains to be had by reducing developed world emissions. The treaty's proponents answer that the Kyoto Agreement addresses this problem by allowing the developed world to meet some of its obligations by helping the developing world to develop in ways that reduce the presence of greenhouse gases in the atmosphere. David M. Driesen, Free Lunch Or Cheap Fix?: The Emissions Trading Idea And The Climate Change Convention, 26 B.C, Envtl. aff. L. Rev. 1, 31 (1998).
176. For a discussion of the cost impacts of the treaty on the American coal-fired power industry, see infra notes 154-156 and accompanying text.
177. See Directive 2003/87/ec of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/ 61/EC, available at http://europa.eu.int/eurlex/pri/en/oj/dat/2003/1_275/ 1_27520031025en00320046.pdf (last accessed Mar. 2, 2005) (illustrating the EU's establishment of a cap and trade system for carbon dioxide irrespective of whether the Kyoto Agreement takes effect)..
178. The Jeffords Bill was designated S.366, 108th Cong. (2003), the Clean Power Act of 2003.
179. The Clear Skies Act of 2003 was designated S.1844, 108th Cong. (2003).
180. Another bill, designated S.843, the Clean Air Planning Act of 2003, proposes a compromise approach. Its emissions targets are less stringent than the Jeffords bill's, but more stringent than the Clear Skies Act's. It would address carbon dioxide emissions, but less stringently than the Jeffords bill. S. 843, 108th Cong. (2003).
181. See, NRDC, The Bush Administration's Air Pollution Plan, at http:// www.nrdc.org/air/pollution/qbushplan.asp#clearskies (last revised Sept. 5, 2003) (saying that Clear Skies will "weaken and delay" pollution reductions that would have occurred under existing law);
182. Sierra Club, Clean Air: Facts About the Bush Administration's Plans to Weaken the Clean Air Act, at http://www.sierraclub.org/cleanair/ clear_skies.asp (last assessed Feb. 27, 2005) (making the same arguments, asking why "the Administration [is] bragging about a plan that will actually result in more pollution than if we simply enforced the existing Clean Air Act?").
183. Different states define "renewable" differently, with the major points of contention being whether to include within the definition hydroelectric power or biomass combustion facilities that burn non-waste organic material. However, all such definitions exclude coal-fired power. For good summaries and comparisons of state renewable portfolio standards, see Energy Information Administration, Renewable Energy Annual 2000 (With Data For 1999)(Mar. 2001), at http://www.eia.doe.gov/ cneaf/solar.renewables/page/rea_data/;
184. Democratic Energy's web site on renewable portfolio standards, at http:// www.newrules.org/electricity/rps.html (last accessed Apr. 18, 2005);
185. Energy Justice Network, Promoting Green Energy: The Free Market Approach vs. the Public Policy Approach, at http://www.energyjustice.net/rps/ (last accessed Apri. 18, 2005),;
186. and the State Environmental Resource Center's renewable portfolio standards web site, at http://www.serconline.org/RPS/fact.html (last accessed Apr. 18, 2005).
187. Ryan Wiser & Ole Langniss, The Renewable Portfolio Standard in Texas: An Early Assessment (Nov. 2001) at http://eerd.lbl.gov/EPA/EMP/.
188. SB 1078 (2002).
189. "By Order issued September 24, 2004, the Public Service Commission of the State of New York (Commission, PSC) adopted a policy of increasing to at least 25 percent the percentage of electricity used by retail consumers in New York State that is derived from a renewable resources." Case 03-E-0188, Order Regarding Retail Renewable Portfolio Standard (issued & effective Sept. 24, 2004), at 4, at http://www3.dps.state.ny.us/pscweb/WebFileRooms.ns/Web/ 85D8CCC6A42DB86F8526F1900533518/$File/ 301.03e0188.RPS.pdf?OpenElement.
190. See Energy Information Administration, Electric Power Annual - Table 1.1 - Net Generation by Energy Source by Type of Producer, at http:// www.eia.doe.gov/cneaf/electricity/epa/epat1p1.html (last modified Dec. 22, 2004 (showing that nationally, nonhydro renewables constituted less than one half of one percent of an power generated by electric utilities and independent power producers in 2002).
191. Minnesota and Iowa, for example, initiated renewable portfolio standards within the last decade without simultaneously restructuring.
192. Neither the FERC nor the Congress seems close to enacting a national renewable portfolio standard. The Union of Concerned Scientists and other interest groups have lobbied for such a standard. See Union of Concerned Scientists, Clean Energy FAQ, at http://www.ucsusa.org/ clean_energy/renewable_energy/page.cfm?pageID=46 (last accessed Apr. 15, 2005).
193. See also Sierra Club, Myths vs. Reality About a 20% Renewable Portfolio Standard, at http://www.sierraclub.org/globalwarming/cleanenergy/ renewables.asp (last accessed Feb. 27, 2005).
194. See also, Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market, at http://www.europa.eu.int/smartapi/cgi/ sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc= Directive&an_doc=2001&nu.doc=77 (last accessed Feb. 27, 2005) (showing how the European Union, by contrast, has established an EU-wide goal of providing more than 20 percent its electricity from renewable energy sources by the year 2010).
195. Energy Information Administration, U.S. Natural Gas Markets: Recent Trends and Prospects for the Future ch. 3, available at http:// www.eia.doe.gov/oiaf/servicerpt/naturalgas/chapter_3.htm (last modified May 17, 2001).
196. Id.
197. Energy Information Administration, Form EIA-860, "Annual Electric Generator Report," at http://www.eia.doe.gov/cneaf/electricity/epa/ epat2p4.html (last accessed Mar. 2, 2005) (also showing that natural gas plants (102,000 megawatts) represent about 90 percent of that total).
198. The International Energy Agency estimates typical construction costs for coal-fired plants of between $1000 and $1500 per kilowatt. The comparable range for natural gas plants is between $400 and $800. See Energy Information Administration, Projected Costs of Generating Electricity - 2005 Update, Executive Summary, at http:// www.iea.org/textbase/npsum/ElecCostSUM.pdf (last accessed Apr. 18, 2005). Since coal-fired plants have a larger capacity, typically, than natural gas-fired plants, the corresponding investment required is larger.
199. Wholesale prices in the California market experienced extreme volatility in the winter of 2000-01, reaching peaks that were several orders of magnitude above historical prices. Short term markets in the Midwest experienced similar volatility the previous winter. The inability to store electricity, imbalance of supply and demand in California (and the manipulation of that market by sellers), lack of investment in transmission capacity in many parts of the country, and the influence of weather factors on both supply and demand all contribute to that price volatility.
200. See discussion of these rules, supra notes 87-102 and accompanying text.
201. See Energy Information Administration, Electric Power Monthly - Table ES2B Summary Statistics: Reports and Costs of Fossil Fuels for the Electric Power Industry by Sector, btus, 2004 and 2003, at http:// www.eia.doe.gov/cneaf/electricity/epm/tablees2b.html (last modified Feb. 28, 2005) (stating that the average price electric utilities pay for coal increased by about 5 percent over the last year, according to the U.S. EIA).
202. We can infer this from the fact that the percentage of electricity from coal-fired generation each year routinely exceeds the percentage of plant capacity that comprises coal-fired plants. This could reflect increased reliance on cheaper coal power as electricity markets liberalize. On the other hand, coal-fired plants have always been base load plants, and therefore tend to have higher capacity factors even under traditional regulation.
203. As described in supra notes 18-19 and accompanying text, the only Clean Air Act provisions that grandfathered plants face are those contained in the acid rain program, limiting sulfur dioxide emissions. Since that program allows plants to buy and sell pollution rights, it is possible for individual plants to continue to pollute at high levels while total pollution decreases, simply by purchasing the necessary pollution rights. EPA's inspector general has recently concluded that the Administration's approach to new source review is weakening ongoing enforcement actions against grandfathered plants.
204. U.S. Dep't of Energy, Office of Fossil Energy, DOE's Innovations for Existing Plants - Helping Achieve Clear Skies, at http:// www.fossil.energy.gov/programs/powersystems/pollutioncontrols/.
205. See supra notes 131-133 and accompanying text.
206. See the description of this process, supra note 91 and accompanying text.
207. Recall that the technology-based standards in the Clean Air Act are stated in relative terms, and that the Act leaves the establishment of actual emissions limits up to permit writers. See supra notes 38-39 and accompanying text.
208. See, e.g., A Danny Ellerman, Are Cap and Trade Programs More Environmentally Effective than Conventional Regulation?, MIT Working Paper, 2003, at http://web.mit.edu/ceepr/www/2003-015.pdf (last accessed Mar. 2, 2005);
209. A. Danny Ellerman & Paul L. Joskow, Clearing the Polluted Sky, N.Y. Times, May 1, 2002, at 25.
210. See, e.g., Natural Resources Defense Council, Dirty Skies: The Bush Administration's Air Pollution Plan, at http://www.nrdc.org/air/ pollution/qbushplan.asp#clearskies ("if Congress passes the Clear Skies bill, the result will be to weaken and delay health protections already required under the law")(last accessed Apr. 19, 2005);
211. Sierra Club, Facts About the Bush Administration's Plan to Weaken the Clean Air Act, at http://www.sierraclub.org/cleanair/clear_skies.asp ("[W]hy is the Administration bragging about a plan that will actually result in more pollution than if we simply enforced the existing Clean Air Act?")(last accessed Apr. 19, 2005).
212. See Energy Information Administration, Reducing Emissions of Sulfur Dioxide, Nitrogen Oxides, and Mercury from Electric Power Plants 11-12 (Sept. 2001), available at http://www.eia.doe.gov/oiaf/servicerpt/mepp/ pdf/sroiaf(2001)04.pdf. Although fossil fuel use is expected to grow over the next 20 years, SO2 and NOx emissions are not projected to be higher in 2020 than they are today .... As a result of the emission reduction programs established in the Clean Air Act ... SO2 and NOx emissions are expected to be lower in 2020 than they were in 1999.
213. Environmental Protection Agency, Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units, 65 Fed. Reg. 79825, 79826 (Dec. 20, 2000) (The Clinton EPA proposed to regulate mercury as a toxic pollutant under section 112 of the Clean Air Act, which calls for a stricter technology-based standard than that applicable to conventional pollutants like sulfur dioxide and nitrogen oxides, and applies that standard to old and new plants alike.).
214. See Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units; Proposed Rule, 69 Fed. Reg. 4652 (Jan. 30, 2004) (showing the preamble to EPA's 2004 proposed mercury rule which estimates that the rule would reduce nationwide emissions of mercury by 14 tons (29 percent) by the end of 2007);
215. see Press Release, NRDC, June 29, 2004, at http://www.nrdc.org/media/ pressreleases/040629.asp (citing an internal EPA analysis, and disputing those numbers, contending that the reductions achieved by the rule will be far less).
216. Energy Information Administration, Analysis of Strategies for Reducing Multiple Emissions from Power Plants. Sulfur Dioxide, Nitrogen Oxides, and Carbon Dioxide xv-xvii (Dec. 2000), at http://www.eia.doe.gov/oiaf/ servicerpt/powerplants/pdf/sroiaf(2000)05.pdf
217. Id. at xvii (stating that these projections depend upon a number of assumptions, including estimates of the likely cost of pollution allowances for all three pollutants, future technological changes, and the effect of increasing coal-fired power prices on prices of other fuels and that the EIA's analysis means that while coal-fired power plants could comply with stricter regulation of SO2 and NOx by installing pollution controls, strict CO2 emissions caps would drive roughly a third of the nation's coal-fired power plants out of business).
218. See Office of the Press Secretary, Press Briefing by Ari Fleischer, March 28, 2001, at http://www.whitehouse.gov/news/briefings/ 20010328.html#KyotoTreaty (transcript discussing why the Bush Administration opposed joining the Kyoto Protocol).
219. This discussion has taken the Bush Administration proposals at face value. A cynic might suggest that the Administration's Clear Skies Act might be a proposal designed only for public consumption, and that the Act has not moved forward in Congress because the Administration would prefer the status quo. It is impossible to prove or disprove that conjecture, but it is worth noting that some of the Congressional opposition to the Act comes from proponents of the Jeffords bill or other alternative bills. Presumably, those members of Congress oppose Clear Skies not because they prefer the status quo, but because they prefer more radical changes to the status quo.
220. There are several promising technologies on the horizon. Some involve pre-combustion preparation of the coal to reduce its ash content. Others such as improved flue gas desulphurization, electrostatic precipitation, and selective catalytic reduction, reduce sulfur dioxide, particulate matter, and nitrogen oxides emissions. Fluidized bed combustion produces fewer emissions than traditional pulverized fuel combustion, and an even more promising technology - integrated coal gasification combined cycle ("IGCC") generation - would transform coal into a fuel gas that burns efficiently and produces less emissions of sulfur dioxide, nitrogen oxides and carbon dioxide. Brenda Buchan & Christi Cao, Office of Market Monitoring and Strategic Analysis, Florida Public Service Commission: Proven and Developing Technologies 2-3 (2004).