Utility Deregulation Called Threat to Cleaner Air in East

Article excerpt

The impending deregulation of utilities may bring lower electric bills, but it also is likely to worsen air pollution along the East Coast, says a coalition of environmental groups and state officials.

Deregulation is expected to take place this summer, when the Federal Energy Regulatory Commission issues a final rule allowing utilities open access to power markets nationwide.

Under the system outlined in the rule proposed, coal-fired power plants in the Midwest, now producing electricity at a cheaper rate than their nuclear or oil-burning competitors on the eastern seaboard, would be free to increase their output and market their power more widely in the Northeast and other regions with high electric rates.

But by burning more coal, the plants probably will increase their emissions of nitrogen and sulfur oxides and other air pollutants, warned Ned Helme, executive director of the Center for Clean Air Policy, an environmental organization based in Washington.

To illustrate its point, the center recently analyzed how deregulation would affect American Electric Power, a major utility operating mainly in the Ohio Valley that generates 83 percent of its power from coal.

The utility produces electricity at 1.2 cents per kilowatt hour and operates many of its coal plants at less than 70 percent of capacity, the study says.

Deregulation would encourage the utility to increase production and sell its power in areas such as New York, where utilities can sell electricity for as much as 2.9 cents a kilowatt hour.

"The increased production would inevitably bring more pollution," Helme said. …