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Cleaner Coal Plants Would Send Energy Costs Soaring, U.S. Says

November 02, 2001|From Associated Press

WASHINGTON — Reducing carbon dioxide and other emissions blamed for global warming from coal-burning power plants would raise the cost of electricity an average of $9 billion a year over the next 20 years, the Energy Department said Thursday.

By 2020, electricity from those plants, most of them in the South and Midwest, will cost 33% more than it would if carbon dioxide continues to be treated as an unregulated nonpollutant, Mary J. Hutzler, acting head of the department's Energy Information Administration, told the Senate Environment and Public Works Committee.

The panel's chairman, Sen. James M. Jeffords (I-Vt.), accused the Bush administration of disregarding the estimated $59 billion in health benefits and $1 billion in visibility benefits from cleaner air that would accompany reducing carbon dioxide emissions.

Jeffords is the author of pending legislation that would treat carbon dioxide as a pollutant, a position that President Bush advocated during his campaign but abandoned once in office. Jeffords dropped his lifelong Republican affiliation in May, citing Bush's switch on the issue as one of the reasons.

The Energy Department said its analysis indicates that Jeffords' proposal would raise the nation's total electric bill over the next 20 years to $2.208 trillion, compared with $2.031 trillion if the law is unchanged.

A separate analysis by the Environmental Protection Agency said electricity prices would increase by 32% to 50% and coal-fired electric generation would decline by 25% to 35% by 2015.

Overall costs, measured by the decline in household consumption of goods and services, would be between $13 billion and $30 billion annually, or 1% to 3% of total consumption.

Jeff Holmstead, an EPA assistant administrator, said the administration strongly opposes including carbon dioxide cuts in any bill dealing with multiple pollutants.

Holmstead said the Bush administration believes the bill "would unnecessarily raise energy costs and jeopardize our energy supplies" and that the carbon dioxide provisions, in particular, "will cost consumers too much and endanger our energy security by causing too much electricity generation to switch from coal to natural gas."

Jeffords discounted the figures, saying they failed to account for clean air requirements now in the law but yet to be implemented, such as new limits on mercury and dust.

"Without that information, it's impossible to determine the true incremental costs of any additional control requirements," he said.

Environmental groups such as the Natural Resources Defense Council and the National Environmental Trust said the White House misrepresented the EPA analysis that Holmstead used in testifying before Jeffords' committee.

"EPA's internal analysis did not show substantial increases in electricity costs and the White House rewrote Holmstead's testimony over the past few days," said NET president Philip Clapp, whose group filed a Freedom of Information Act request to find out more.

EPA spokeswoman Tina Kreisher said it would not be unusual for the White House's Office of Management and Budget to review any proposed regulations or economic analysis, but none of the figures were altered. "No numbers for the analysis were changed from previous analyses or from previous versions of the testimony," she said.

Sen. George Voinovich (R-Ohio) described the bill as "a disaster for my state and for the manufacturing base of the United States," particularly in the coal-dependent Midwest, already in recession.

Sen. Barbara Boxer (D-Calif.) sparred with Voinovich and Holmstead, challenging them to consider other factors. "The gloom and doom we have heard in every single environmental fight over the last 30 years has never happened," she said.

Holmstead acknowledged that "there would be significant environmental benefits" from the bill. But he said the EPA had analyzed costs, not benefits, because "quantifying benefits is a difficult thing to do."

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