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Roundtable: The Future Of Generation

Fortnightly Magazine - December 2004

by far. We are pursuing something like 27,000 MW of opportunities.

California is far and away the hottest market. We are really in short supply in California. But Texas is always a good market, and with direct open access we continue to see an attractive future in Texas. New York also clearly needs power.

Fortnightly:What directions do you see environmental regulations heading?

Howard A. Learner, Executive Director, Environmental Law & Policy Center: The peculiar grandfathering provisions of the Clean Air Act have created an unequal playing field in favor of coal-fired power plants. Old coal plants that were expected to die their death under the Clean Air Act have continued to operate for three decades. Their owners desire to run them as cheaply and as hard as possible to make money off them before they shut them down.

Part of the problem is that public policy hasn't caught up with modern technology. Over time, modern, cleaner energy technology will begin driving public policy.

The United States cannot stay out of step with the rest of the world forever. The science of global warming is no longer seriously in dispute. The debate now is what to do about it. American energy companies are divided. Some are stepping forward and others are not. We think those that step forward will have an advantage by addressing the issue sooner.

The fact is, whether the United States ratifies the Kyoto Protocol or not, multinational companies will be forced to reduce their carbon emissions because of requirements being applied in Europe and other parts of the world. Those companies will demand a level playing field and will make sure they get credit for being early adopters.

If most of the rest of the world is adopting carbon reductions, eventually the U.S. will have to follow.

Cartwright,Calpine: I'm convinced there will be increasing pressure on CO 2, whether in the form of a carbon tax or emissions trading or something else that brings the United States into the whole global warming picture. It's going to happen. If the federal governent doesn't take the lead, we'll see more state-level action to push emissions controls.

We are trying to promote the concept that improving the efficiency of gas-fired generation is the same as adding emission-free capacity. We have a program to improve the heat rate of gas-fired power plants, through new component designs and through optimizing operations across our fleet of power plants. That is establishing a strong position for our company.

Blake Geoghagan, Principal, Deloitte Consulting: There will be increased focus on carbon emissions. Many organizations are positioning themselves to have better performance on emissions in general. TVA undertook a huge project to install scrubbers on their facilities, and Southern Co. is doing the same.

McKenzie, Southern Co.: We have a well thought-out plan to spend money wisely to clean up plants that are needed to serve load. We're spending significant dollars, and complying with all the laws and regulations. At the Bowen plant in Cartersville [Ga.], we are spending half a billion dollars on environmental