On the Brink: Avoiding a Canadian California
Ontario's government has imposed substantial burdens on customers, with no benefits....
restock the fisheries. Many attribute these declines to instream dams that block the natural flow of fish up and down the river. While considerable evidence suggests that dams play a role in the declines, dams also are likely to be the focus of political efforts to address the decline in fish stocks because (1) it is always easier to go after a single, highly visible contributor to a problem than thousands of smaller contributors, and (2) hydropower companies have revenues that can be tapped to pay for projects.
Utilities are likely to be heavily involved in the "fish wars" for some time to come. To date, the most effective approach has not been to oppose or resist addressing the decline in fish stocks, but to work in active partnership with regulatory agencies to help solve the problem. This process often involves extensive public participation.
FERC relicensing is an issue for a growing number of utilities as the 50-year license period ends for plants built to accommodate the economic growth that followed World War II. Hydro relicensing is an opportunity for the public to raise questions that the utilities have not been forced to address for years (e.g., concerning late summer operations that can leave neighbors with a view of a mud flat). Fish and wildlife agencies also may force consideration of impacts on fisheries that were not recognized at the time the license was granted. That can result in conditions or operating regimens that can materially affect the value of the facility.
Plant closures are another issue of public interest. One implication of deregulation is that many older plants will be shut down because they are no longer economic. That holds the potential for public controversy in two areas. First, communities for whom generating plants are a significant source of employment will be concerned about economic implications. Second, plant closures often force utilities to rush the process of cleaning up toxic discharges or other environmental hazards. It is not unusual for new environmental problems to come to light during closure. Local governments will be fearful of getting stuck with cleanup costs or an unusable site.
The closure of nuclear plants, in particular, raises some thorny issues. The Nuclear Regulatory Commission has identified these potential challenges, including stranded costs for decommissioning plants shut down before the end of their licenses, funding for decommissioning deregulated facilities, and plant safety after shutdown.
Regulators are speculating more about plant safety in the deregulated world. They worry that less regulation coupled with competitive prices will cause some utilities to operate plants less safely. As much as utilities complain about the costs of regulation, regulation often provides a "Good Housekeeping Seal of Approval" behind which they can hide. If regulations no longer provide safety assurances, utilities may find themselves having to deal with the public more directly on these issues.
In deregulated markets, environmental impacts such as air quality are supposed to be addressed by "price signals" reflecting the cost of meeting certain environmental standards. At a fundamental level, most environmentalists do not accept the philosophy of the