Deregulation of electricity adds to pollution, study says More outdated plants in use seen as cause

Utilities

October 07, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The deregulation of the electric industry is increasing air pollution, as utilities forced to slash costs to compete turn to outdated plants for cheaper power, a new study contends.

"Utilities have been competitively buying and selling power among one another in an effort to be more marketable," said Jonathan Birdsong, the southeast regional representative for the Izaak Walton League of America, which compiled statistics from data gleaned from the U.S. Department of Energy.

"In this effort, they have been cutting energy-efficient programs and buying the cheapest power available; mostly from outdated 'grandfathered' coal-burning plants that are exempt from modern Clean Air Act standards."

The Izaak Walton League contends that the older coal plants are responsible for more than 90 percent of the poisons attributable to harmful ozone haze and acid rain.

But the group admits that without the cheap power, prices could go up. In Virginia, the group determined monthly bills would increase between $3 and $7.

Still, the Gaithersburg-based environmental protection group is hoping to change environmental law to force the 500 or so plants -- mostly in Ohio, Michigan and Indiana -- to comply with Clean Air Act laws.

At the same time, electric utilities -- including those in Maryland -- are investing significantly less in energy-efficient equipment and programs than they did five years ago, according to a study of 268 U.S. utilities by the Environmental Working Group (EWG) and the World Wildlife Fund (WWF), two Washington-based conservation groups.

Utilities between 1993 and 1997 slashed energy conservation and efficiency programs nationwide by 45 percent, the report states. Since 1993, energy-efficient investments at 52 utilities with revenue of more than $1 billion shrank to less than 0.5 percent of their total revenue, the WWF and the EWG claim.

The Potomac Electric Power Co., which serves Marylanders in Montgomery and Prince George's counties, slashed its energy-conservation programs by 44 percent between 1993 and Baltimore Gas and Electric Co., which serves more than 1 million residents in the metropolitan area, cuts its programs by 2 percent.

Both utilities devote less than 2 percent of their revenue to energy-efficient programs, the groups contend. Pepco last year invested $29.5 million, although in 1992 it had projected it would invest $63.4 million. The Washington-based utility in 1995 spent $99.6 million on energy-conservation programs.

BGE invested $27.8 million last year, down from a high of $35.9 million three years ago. It had projected it would devote $68.5 million to energy-efficient programs in 1997.

Despite the drop in the figures, the state's two major utilities are unapologetic.

"We've made no secret of the fact that we're cutting back on rebate programs and other conservation measures, but that's because they've been successful," said Nancy Moses, a Pepco spokeswoman. "We're entering an era of competition, and conservation programs cost hundreds of millions of dollars to implement. So if a portion of our price per kilowatt hour goes to energy conservation, that's a cost our potential competitors won't have."

Still, Pepco said it intends to spend $136 million on energy conservation in the next five years.

"If anything, though, we're spending more on efficient equipment HTC to comply with the Clean Air Act," Moses added.

"The only thing we've done is to phase out rebates," said Mike Delaney, a BGE spokesman. "They have done their job and raised awareness. We don't expect any drop off in energy conservation as a result."

Pub Date: 10/07/98

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