Report Also Shows Wide Disparity in Emission Rates; High Percentage of Pollution from Three Companies, Five States
BOSTON (April 14, 2004) - A new report rating air pollution emissions performance of America's 100 largest electric power producers reveals important trends in the industry, and sharp contrasts between the best and worst emissions performers. The report shows overall emissions of nitrogen oxide (NOx) and sulfur dioxide (SO2) are dropping, thanks largely to standards created in the Clean Air Act of 1990. Meanwhile emissions of carbon dioxide (CO2), which remain unregulated, are soaring.
The report found that wide disparities in pollution rates persist industrywide, with some companies responsible for far higher pollution rates than their total electricity production would account for, and that few power plants use currently available, state-of-the-art emissions control technologies to lower their emissions. A decade after the Clean Air Act Amendments mandated SO2 and NOx reductions from the electric power industry, the researchers say coal plants -- many of which are not required to install state-of-the-art controls -- are being used more intensively, contributing to a rise in CO2 emissions.
The report comes at a time of intensifying debate over the future of regulation in the electric power industry, increasing uncertainty for the companies over future regulation of pollutants mercury and carbon dioxide, and rising investor concern about risk exposure of companies with continued high emissions. Public awareness of the dangers of power plant pollution has also been on the rise with increasing bans on fish consumption for fear of mercury poisoning, and rising asthma rates among children in urban areas.
Benchmarking Air Emissions of the 100 Largest Electric Generation Owners in the U.S. - 2002, was released by Ceres, a national coalition of environmental and investor groups, the Natural Resources Defense Council (NRDC), and Public Service Enterprise Group Incorporated (PSEG), one of the electric power generation companies included in the report.
The report analyzes 2002 data submitted to the U.S. Environmental Protection Agency (EPA) and the Energy Information Administration (EIA) by the 100 largest power companies in the United States. These companies account for about 90 percent of all power plant air emissions in the nation. The report includes mercury emissions data reported to government agencies in 1999, the only year for which power plant mercury emissions have been reported. Environmental and public health impacts associated with the emissions evaluated include: acid deposition in forests, lakes, and streams (NOx, SO2); ground-level ozone, or "smog," a lung irritant (NOx); fine particulates implicated in lung disease (NOx, SO2); regional haze (NOx, SO2); and global warming (CO2). In addition, mercury is a neurotoxin that can collect in tissues of fish and is especially dangerous to pregnant women.
The study found that a small number of companies produce a relatively large amount of electric power industry emissions, with three companies -- American Electric Power, Southern Company, and Tennessee Valley Authority -- responsible for 25 percent of the SO2 emissions, 21 percent of the NOx emissions, 18 percent of the CO2 emissions, and 24 percent of the mercury emissions from the electric power industry. Less than 20 companies account for half of the industry's total SO2, NOx, CO2, and mercury emissions.
The benchmarking effort also found wide disparities in emission rates--the amount of pollution generated for every kilowatt-hour of electricity produced -- reflecting differences in both management strategies and generating assets.
Power plant air emissions are concentrated in states along the Ohio River Valley and in the South. Five states -- Indiana, Ohio, Pennsylvania, Texas, and West Virginia -- are the source of 30 percent of the electric power industry's NOx and CO2 emissions, and nearly 40 percent of its SO2 and mercury emissions.
The report also found disparities in pollution rates unaccounted for by the amount of electricity generated. For example, although Southern Company produced four times more electricity than Calpine, the company was responsible for 6,300 times more SO2 emissions. American Electric Power produced 28 times more electricity than Panda Energy, but 436 times more NOx emissions. Xcel Energy produced 18 times more electricity than Avista, but emitted 52 times more CO2. The Tennessee Valley Authority produced 24 times more electricity than Cogentrix, but 377 times more mercury emissions.
According to the report's sponsors, this kind of comparative analysis is useful for financial analysts and investors assessing company risk exposure in emerging regulatory scenarios and even potential legal actions.
David Gardiner, Senior Advisor, Ceres, and former Assistant Administrator of the EPA in the Clinton Administration, said, "It is clear from this report that when emissions standards are set and enforced, pollution goes down, and companies are less exposed to financial, legal, and regulatory risk. It's a win for the public and a win for investors. For an industry that is generally short on cash, the disparities could translate into significant losses for individual companies and their investors if proactive measures are not taken to set standards that will lower emissions industry-wide."
In addition to Congressional power industry-specific proposals, both the House and Senate are considering a nationwide limit on carbon dioxide emissions that would be enacted in a "cap and trade" scenario. Similar measures enacted to limit SO2 and NOx resulted in reductions of those pollutants.
Dr. Daniel Lashof, Science Director, Climate Center, Natural Resources Defense Council, said: "This report shows that not enough is being done right now to protect the public health, ensure the long-term viability of this industry and prevent global warming. We have the technology now to reduce pollution, but polluters need to stop staving off pollution controls and get to work fixing the problem."
Investor concern has been particularly focused on carbon dioxide, the major greenhouse gas that causes global warming and is not currently regulated at the federal level. Some of the nation's largest CO2 emitters -- American Electric Power, Southern Company, TXU, Xcel, and Cinergy -- received shareholder resolutions this year requesting reports on their preparedness for regulation, and some have agreed to report to shareholders as requested.
A number of electric power companies have worked with the investors and other groups seeking a near-term decision on carbon dioxide regulation.
Ronald Drewnowski, Director of Environmental Strategy and Policy, PSEG, said, "The comparative emissions information included in the report helps us understand how our environmental performance stacks up against competitors and also helps us integrate environmental targets into comprehensive business strategies. We share the view that our industry requires clarity and certainty about future environmental requirements so that we can rationalize investment decisions on behalf of shareowners. The report provides important context for the public policy process that will determine what these requirements will be."