Power Struggle: Will Utility Deregulation Finally Unplug 'Dirty' Electricity?

Article excerpt

At United Illuminating Company's harborside Unit 3 in Bridgeport, Connecticut, built in 1969, Kentucky coal rides in on a conveyor belt to five huge blue silos that can each hold 700 tons. When pulverized to the consistency of talcum powder and burned in UI's huge boilers at 2,500 degrees, the product is steam, which turns a humming General Electric turbine at 3,600 revolutions per minute, generating 400 megawatts of electricity for county consumers.

In the plant's control room, a constantly moving printout takes note of the emissions from Unit 3's 500-foot smokestack. Power plants account for 36 percent of U.S. emissions of carbon dioxide, the most damaging greenhouse gas. Sulfur dioxide is also an environmentally damaging byproduct of burning coal (along with mercury, lead, cadmium, selenium and hydrochloric acid). Where do those emissions go? "It depends on which way the wind is blowing," says Wayne Barrett, Power Supply Support Engineer. Midwestern coal stack emissions end up as pollution in the Northeast, so the wind can carry particulate matter quite a long way. Unit 3 can also burn fuel oil, which produces far less fly ash, but prices for minimum-sulfur "compliance" coal are so low these days that UI has leased out its oil tanks.

Unit 3 is old technology, and it could well become obsolete in the new millennium, when consumers are likely to be able to choose their own utilities. As a sign of the times, UI is collaborating with Duke Energy Power Services of Houston and Siemens Power Ventures of New York to build an environmentally advanced $260 million natural gas-burning turbine on a grassy site now occupied by UI picnic tables. UI is a small utility, dwarfed by Connecticut's Northeast Utilities (NU), and it's preparing for a brave new world, full of both challenges and opportunities, that will end forever the days of cozy monopolies and captive customers.

Utility deregulation is a national movement. Six states have passed deregulation bills in their local legislatures (Rhode Island, California, New Hampshire, Montana, Maine and Pennsylvania) and bills are pending in more than 40 others.

The momentum for deregulation comes from large utility customers who want to "shop around" for the best electricity rates. For the last 100 years, utilities have operated as local monopolies, with varying degrees of price and practice regulation from the state and federal governments. In a deregulated environment, consumers could choose an electric company the way they now do a long-distance telephone service.

Deregulation presents both challenges and opportunity for the environment. As Rob Sargent of Massachusetts Public Interest Research Group points out, "Without the right protections in place before we 'restructure' the industry, there could be a rush to dirty electricity sources like coal and oil, which might be cheaper in the short run."

Coal and oil plants like UI's - and many in the Midwestern "rust belt" - are "grandfather" protected against the tougher standards imposed by 1977 amendments to the Clean Air Act. A growing number of environmental leaders are raising their voices to ensure that when deregulation does come, it includes stringent safeguards for renewable technologies and energy efficiency. They're also vigilant against utility efforts, as part of deregulation, to pass along to rate payers all the costs of their"stranded assets" - the increasingly uneconomic, white elephant nuclear power plants that most of them have on their books. Nationally, these stranded assets amount to an astonishing $250 billion.

Scott Denman, executive director of the Washington-based Safe Energy Communications Council, notes that Wall Street - not noticeably friendly to renewable energy - is calling nuclear power "an economic dinosaur. Companies like Bear Stearns and Prudential have issued reports saying that nuclear reactors are not going to be able to compete economically. Given Wall Street's two thumbs down, we should not be throwing good money after bad with any more nuclear investment. …