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Generation Roundtable: Power Flux

Generators struggle to plan for the future as they cope with an unstable present.
Fortnightly Magazine - December 2003

and the price per ton of the entitlements you can buy will be about $2,400 a ton. We will do some trading around those. Unless something comes out of left field, we will be OK.

Wehland: Clear Skies is a move forward, but it's not as much of a move forward as the environmental community would like because it doesn't include greenhouse gas emissions among the pollutants being controlled.

Also the environmental community is historically suspect and wary of plant-wide applicability limits. That's what Clear Skies would do, telling generators to do whatever they need to do and achieve the given limits, as opposed to the re-examination of emissions limits or controls every time a repair goes on at a facility. That is a rollback, but from a utility perspective it gives you certainty. You have new pollutants regulated, but it's a good trade-off.

At the end of the day emissions won't increase as a result of Clear Skies as opponents say it will. I don't think in substance it will change a whole lot regarding what facilities are doing, but it will simplify their permit structures and give them more flexibility. In many respects, that's a better approach because it focuses on air-quality impacts that people really feel, rather than specific projects at specific plants.

Zimmer: The offset credits of Clear Skies are a fair proposition, but they have already been part of the fabric of EPA air regulation in the past. And the need to look at emissions from integrated operations, as opposed to facility-by-facility, is a fair comment. But we still need standards in terms of the results we are looking for. It also could include a richer array of other options, including fuel blending and development of renewable facilities that would provide credits you could use to offset outputs from dirtier facilities.

Fortnightly: Greenhouse gas emissions might be regulated under other legislation. The Climate Stewardship Act (S.139) recently garnered a surprising 43 votes in the Senate, across party lines. What does this portend?

Wehland: It's hard to predict. The administration has not given any indication that it will accept a bill that has climate-change elements to it. Bush believes voluntary measures and those with some economic growth element are necessary to address climate change. I don't think S.139 does that, but if you have a compromise that lets you get most of what you want in Clear Skies but adds climate change as another pollutant, maybe at the end of the day that turns out to be an acceptable compromise.

Markell: We are seeing increasing national concern over greenhouse gases. Early this year, Gov. George Pataki in New York and some New England governors issued a compact at the state level to impose state-mandated restrictions or taxes on emissions of greenhouse gases. And in early October, Gov. Gary Locke of Washington announced support for limits like those in Oregon.

The punch line is that state policy-makers have grown tired of Washington, D.C.'s, inability to come to closure on this as a national concern, and are trying to address