|
Press Releases | |
|---|---|
U.S. ENERGY INFORMATION ADMINISTRATION WASHINGTON DC 20585 FOR IMMEDIATE RELEASE MARCH 25, 1997
Lower Sulfur Coal, Emission Allowances Play Key Roles Electric utilities brought 261 generating units named in Title IV of the Clean Air Act Amendments of 1990 and their substitution and compensating units into compliance with the Phase I sulfur dioxide emission requirements. The 1995 emissions from these units (5.3 million tons) accounted for 45 percent of total utility emissions, compared with 62 percent in 1990. In a study released today, The Effects of Title IV of the Clean Air Act Amendments of 1990 on Electric Utilities: An Update, the Energy Information Administration (EIA) concludes that the annualized $836 million cost for achieving compliance with the Phase I requirements in 1995 represents only about 0.6 percent of the $151 billion operating expenses of investor-owned utilities in 1995. In addition, a detailed look at six utilities found that their compliance strategies did not cause an increase in their electricity prices in 1995 as compared to 1990 prices in real terms. The EIA report discusses other effects of compliance with Phase I of the Acid Rain Program in 1995, developments since Phase I in controlling nitrogen oxide emissions and air toxics, and strategies for compliance with Phase II, which begins in 2000. The major findings are: Most utilities used fuel switching and blending of higher and lower sulfur coal to reduce sulfur dioxide emissions (Figure 1). Competitive prices of low-sulfur coal and lower-than-expected costs for the boiler modifications needed to burn it were among the reasons. Switching from high-sulfur to low-sulfur coal by utilities has impacted coal distribution patterns. Between 1990 and 1995, sales of low-to-medium sulfur coal increased 78 million tons from the Powder River Basin, 15 million tons from the Central Appalachian Region, and 10 million tons from the Rockies. In contrast, sales of high-sulfur coal decreased 29 million tons from the North Appalachian Region and 40 million tons from the Illinois Basin (Figure 2). Some utilities used allowances authorized under the Act to continue burning higher sulfur coal and defer the cost of boiler modifications or scrubber retrofits. Because the recent decline in coal prices is reflected in the price of allowances, this option is economically attractive. Because of expected competition in the electric power industry, utilities are reluctant to invest in capital modifications. A number of utilities that planned to install scrubbers for Phase II have either deferred installation or canceled them altogether in favor of fuel switching or purchasing allowances. Utilities have also elected to overcomply with Phase I requirements, building a reserve of excess allowances that can be used to comply with the more stringent Phase II emissions requirements and delay further expenditures until beyond 2000. Copies of The Effects of Title IV of the Clean Air Act Amendments of 1990 on Electric Utilities: An Update are available from the U.S. Government Printing Office or through EIA's National Energy Information Center, Room IF-048, Forrestal Building, Washington, DC 20585. The report also will be available on EIA's Internet Web Site http://www.eia.doe.gov by later March 1997. The figures referenced above may be viewed along with this press release in the press release section of EIA's Web Site. They are also available from EIA's Press Contact.
EIA Press Contact: Thomas R. Welch, 202/586-1178 EIA-97-10 Contact:
|
