As a landmark air pollution bill heads for a critical vote today, a flash point for debate is a loophole that would allow power plants to avoid penalties if the cost of adding filters "may significantly increase electric rates."
Senate Finance Committee Chairman Thomas M. Middleton, who has a power plant in his Southern Maryland district, inserted the language into the Healthy Air Act before it was approved 33-14 last week by the Senate.
Middleton, a Democrat who has received at least $7,750 in campaign contributions from the power industry since 1999, said he added the "safety valve" to protect customers, given the uproar over a large rate increase expected this summer because of the deregulation of electric utilities.
"One of the things we keep hearing about is the cost of [the proposed legislation] to consumers and the impact on our electrical system," Middleton said. "It has to make environmental and economic sense."
Del. James W. Hubbard, the measure's sponsor on the House side, said he opposed weakening the legislation, which would require an 80 percent reduction in mercury air pollution by 2010, among other limits.
"If people can't be fined, there is no enforcement mechanism to make them meet the emissions goals," said Hubbard, a Democrat from Prince George's County.
But Hubbard and the Senate sponsor, Sen. Paul G. Pinsky, also a Prince George's Democrat, said they didn't want disagreement over the amendment to scuttle the bill.
`A good bill'
"I am concerned" about the loophole, Pinsky said. "But it's still a very good bill. It addresses four major pollutants, and it will make major improvements to the quality of our air and the Chesapeake Bay."
The bill is scheduled for a vote today by the House Economic Matters Committee.
Similar legislation died in the committee a year ago after a coordinated lobbying campaign against it by the Ehrlich administration and Constellation Energy, the state's largest owner of power plants.
The Healthy Air Act would require coal-fired power plants to add at least $1 billion in pollution-control equipment.
The plants would have to cut carbon dioxide emissions, which cause global warming and sea-level rise, by 10 percent by 2018; reduce sulfur dioxide pollution by 78 percent by 2010; and cut nitrogen oxide emissions by 69 percent by 2009.
The Middleton amendment leaves enforcement to the discretion of the Maryland Department of the Environment.
The agency - which has been run, during the Ehrlich administration, in part by two former Constellation Energy officials - would have the authority to waive penalties for pollution violations.
The amendment says the MDE may "waive or reduce any penalty" if a power plant demonstrates that required pollution control equipment "has significantly increased in cost to due to the limited amount of supply, and as a result, may significantly increase electric rates."
"It will certainly matter a lot who's running the MDE," said Brad Heavner, executive director of the Maryland Public Interest Research Group. "We've seen that in the department, over many years, enforcement is a problem."
Decisions on waivers
Julie Oberg, a MDE spokeswoman, said any decisions about waivers would not be made by the former Constellation employees at the agency.
"Air policy decisions are made by Tad Aburn, a nationally respected expert on air quality issues," Oberg said. "He's an engineer and 23-year employee of the department."
David Schoengold, a power industry analyst who worked for the Wisconsin Public Service Commission from 1975 to 1990, said Maryland's Healthy Air Act shouldn't raise electricity rates because, under the state's new deregulated system, the plants can't set rates and must sell power to distributors for prices that compete with plants outside the state.
`Will save money'
"In a societal sense, the act will save money, because of the health benefits from reduced emissions, including saving 96 lives a year," said Schoengold, who consults for the National Wildlife Federation. "The economic value of saving those 96 lives is $600 million a year."
Industry representatives have argued that power companies, in rushing to comply with new air rules, will create a bottleneck of demand for the expensive filtration devices called scrubbers.
"It's impossible for me to conceive of $1 billion in investments being put on power plants without some or all of these costs being passed on to consumers," John Quinn, chief engineer for Constellation Energy, said recently.