Environmentalists Fear for Air Quality in New Climate

WASHINGTON — The rush toward competition in the electricity industry has environmentalists worried about increased air pollution and the survival of an already-wavering energy conservation movement.

The ability of consumers to choose where to buy electricity could open new niches for “green” electricity generated from less polluting power plants, but it also could end up as an environmental nightmare, activists say.

“Competition poses environmental risks--and some possible benefits, but only if it’s handled right,” said Dan Becker of the Sierra Club.

Not in years, thanks to all the talk about competition, has the opportunity been better to clamp tighter pollution controls on the scores of old, dirty coal-burning power plants that dot the Midwest and parts of the South, environmentalists say. But if emissions controls are not tightened, the plants that produce the cheap power--and thousands of tons of smog-causing pollution that is blown into the Northeast--could make it even more difficult for states from Maryland to Maine to get rid of dirty air, according to the Environmental Protection Agency.

Many of these plants now operate at only 60% of capacity, so under competition, they could be revved up to meet increased demand, said Ned Helme, executive director of the Center for Clean Air Policy, an environmental consulting group.

“Those plants will be very attractive,” he said.

An open electricity market is viewed as a two-edged sword on other environmental fronts as well. For example:

* Cheaper power may doom energy conservation. Utilities have already cut back on incentive programs that helped people buy more efficient light bulbs, appliances and air conditioners.

* It would become even tougher to address global warming. As more power is produced, much of it by burning fossil fuels, more carbon dioxide would be put into the atmosphere.

* Solar, wind and other renewable energy industries may be stifled as utilities shy away from investments in more expensive energy sources.

* Increased demand for the low-cost hydroelectricity in the Northwest may make it more difficult to protect salmon and other threatened fish as more water is pushed through the turbines at federal dams.

But many supporters of deregulation argue that in the long run, the environment will benefit. Competition will make it easier for the industry to exploit less-polluting power sources. Surveys consistently show that many customers are willing to pay more for such electricity if it is readily available.

“There are customers who want cleaner energy and businesses that want to brand themselves environmental,” said Scott Sklar, executive director of the Solar Energy Industries Assn.

And as competitive pressures hasten the shift from coal to natural gas, more electricity will be produced with less pollution, maintains Betsy Moler, chairman of the Federal Energy Regulatory Commission and one of the leading proponents for opening electricity markets.

“The overall impact of competition on the environment will be positive” she said.

“Betsy is an optimist,” countered Ralph Cavanagh, an energy specialist with the Natural Resources Defense Council. “She thinks emission standards will be tightened, natural gas prices will stay low, and gas will beat coal.”

Cavanagh and other environmentalists argue that the environment can benefit, but only if the government requires industry to support renewable energy sources and efficiency programs while it imposes tougher controls on the coal plants.

Environmentalists want the federal government to require companies to produce at least some of their electricity from renewable sources, and they want customers and states to pay into a fund that promotes efficiency programs.

Without such requirements, incentives for conservation and some renewable energy industries might disappear. Already, investment in wind energy has suffered from the turmoil and uncertainty.

“Nobody wants to invest. Until the rules of the game are clarified, investors will hold off making a lot of decisions,” said Randy Swisher, executive director of the American Wind Energy Assn.

Most of the environmental debate has focused on the coal plants of the Midwest. Northeast utilities, viewing cheap electricity from the plants as unfair competition, have joined environmentalists in calling for tighter emission controls.

“Dirty power plants are cheaper power plants. It’s that simple,” argued Lawrence Codey, president of the Public Service Electric & Gas Co., New Jersey’s largest utility.

The Washington-based Center for Clean Air Policy estimates that Midwestern coal plants would generate tens of thousands of additional tons of smog-causing nitrogen oxide emissions. The 19 coal plants of Ohio-based American Electric Power Co. alone would release 35,000 additional tons of nitrogen oxide, about the same amount that federal air-quality restrictions will allow all New Jersey utilities to release between now and 2003, a study by the clean-air policy group said.

American Electric officials say the estimates are exaggerated and assume an impossible level of production at the plants. They also argue that no scientific evidence shows that the plants contribute substantially to the smog problem in the Northeast.

“The principal problem [in the Northeast] is cars,” said Lynn Draper, American Electric’s chairman. He then accused critics of trying to make his plants the scapegoat for the Northeast’s failure to control pollution.