From: Subject: EPA suits against utilities counterproductive - The Clarion-Ledger Date: Mon, 5 Aug 2002 14:55:12 -0500 MIME-Version: 1.0 Content-Type: multipart/related; boundary="----=_NextPart_000_0000_01C23C90.19C5B620"; type="text/html" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2600.0000 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01C23C90.19C5B620 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.clarionledger.com/news/0204/27/l01.html EPA suits against utilities counterproductive - The = Clarion-Ledger
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Home |=20 Mississippi=20 News | Opinion=20 | Letter

April 27, 2002=20

EPA suits = against utilities=20 counterproductive

  • Newer technology not being used because of regulations = involved

    By = William F.=20 Shughart
    Guest Columnist

    Imagine that the federal government decided that = when you=20 replace the muffler in your car, you should be taxed as if = you now=20 have a new car.

    Surely such an arbitrary approach to regulation would = trigger=20 substantial public debate, especially if federal authorities = required detailed descriptions of the work every time you = took your=20 car in for routine maintenance or repair.

    Something resembling this is happening to electric = utilities that=20 operate older coal-fired power plants. The Environmental = Protection=20 Agency is targeting 19 electric utilities, including the = Southern=20 Company and the Tennessee Valley Authority, for failing to = upgrade=20 pollution controls in the 1980s and 1990s when routine = repairs and=20 maintenance were made on aging coal plants.

    If the EPA succeeds, the utilities could face hundreds of = millions of dollars in fines and would be required to = install=20 expensive pollution controls at 51 power plants in the = Southeast and=20 Midwest. This would result in mandated capital expenditures=20 amounting to tens of billions of dollars that would, in = turn,=20 require higher electricity rates. Clearly, for many people = living in=20 Mississippi, as in Alabama, Georgia and other targeted = states, this=20 would hurt pocketbooks.

    What's more, this latest exercise in environmental = vigilance is=20 counterproductive. Some targeted plants are experiencing = regulatory=20 delays in undertaking maintenance, repairs and part = replacements=20 that would reduce air emissions.=20

    These older plants, which admittedly emit more pollution = than new=20 facilities, may owe their continued existence to this and = other=20 onerous Clean Air Act programs, which have rendered new = plants=20 prohibitively expensive to build. The end result is = unnecessarily=20 high electric bills.

    Coal-fired plants last many years, and it is customary = for=20 utilities to provide extensive maintenance over the 40 years = or more=20 that such units are in operation. Over that time, utilities=20 typically take advantage of new technologies as they become=20 available.

    Utilities in the Southeast, for example, will want to = replace the=20 original turbine blades, as they wear out, with more modern = designs.=20 This work is carried out during routine maintenance. = Similarly, coal=20 pulverizers that are more than 20 years old can be replaced, = when=20 they wear out, with better designs. New designs increase = efficiency=20 while reducing costs for utilities and their customers and = reducing=20 pollution.

    However in 1999, during President Clinton's second term, = the EPA=20 began treating normal plant maintenance as a major plant=20 modification under the Clean Air Act. By this definition, if = a=20 utility undertakes a major overhaul at a power plant, = extensive and=20 costly permitting requirements are triggered.

    To be sure, reducing emissions of sulfur dioxide and = nitrogen=20 oxides, which may contribute to acid rain and smog, are = necessary to=20 achieve cleaner air, but the EPA's policy toward maintenance = of=20 older plants is accomplishing just the opposite.

    The EPA's policy simply encourages utilities to replace = worn-out=20 parts with exactly the same old-technology parts. Not taking = advantage of the best available technology is inefficient = and it=20 wastes resources. It also may result in higher = emissions as new=20 technology would be more efficient and less polluting. This = helps=20 neither customers nor the environment.

    It is hard to imagine a policy that could have a more = chilling=20 effect on investment in needed new power-generating = facilities,=20 since coal accounts for 56 percent of the nation's = electricity. Why=20 would anyone want to invest in an industry that operates in = such a=20 risky and arbitrary regulatory environment?=20

    U.S. electricity-generating capacity is now strained = because of=20 economic growth; few new plants have been built in the past = decade.=20 This is hardly the time for such ill-conceived policies.=20

    President Bush should rein in the EPA and put an end to = its=20 nuisance lawsuits against utilities.

    William F. Shughart II is an F.A.P. Barnard distinguished = professor=20 of economics and holder of the Robert M. Hearin chair in = business=20 administration at the University of Mississippi.

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