Eight Energy Companies Wrote Weaker Cleanup Requirements into Bill

WASHINGTON (February 10, 2005) -- A secret utility industry lobbying document recently obtained by NRDC (Natural Resources Defense Council) reveals that corporate polluters helped draft a White House legislative proposal that weakens the Clean Air Act. The proposal is now known as the Clear Skies Act of 2005 (Senate bill 131). (For a pdf file of the industry document, click here.)

In April 2003, Generators for Clean Air (GCA), a coalition of eight power plant companies, reviewed the first version of the Bush administration's air pollution plan and requested "essential" changes to undermine the bill's already lax cleanup provisions. A comparison of this previously undisclosed industry wish list and the version of the administration's air pollution legislation currently before Congress shows that the utilities succeeded in significantly weakening the bill.

(Last week NRDC released a transcript of an April 2001 talk given by a top utility industry lobbyist to coal industry representatives in which he boasted that he and his colleagues had a plan for the White House to allow coal plants to emit more pollution for a longer period of time than allowed under the Clean Air Act. The plan resulted in the Bush administration's air pollution legislation. For more information, click here.)

The members of GCA -- Ameren (St. Louis), American Electric Power (Columbus, Ohio), Cinergy (Cincinnati), DTE Energy (Detroit), PacifiCorp (Portland, Oregon), TransAlta (Calgary), Wisconsin Energy (Milwaukee), and Xcel Energy (Minneapolis) -- were able to:

UNDERMINE STATES' ABILITY TO PROTECT THEMSELVES FROM UPWIND POLLUTERS: The Bush administration's original air pollution legislation in 2002 (Senate bill 485) would have weakened the Environmental Protection Agency's authority to help downwind states combat power plant pollution from upwind states. The bill would have prohibited the agency from regulating upwind power plants unless it first determined that regulating those plants would be as cost-effective as regulating pollution from all other upwind sources (including cars and off-road vehicles) -- a nearly impossible analytical task. The bill also would have shielded the power industry, prohibiting EPA from further regulating upwind power plants before 2012.

These impediments to cleanup did not satisfy the utilities, however. Seeking more certainty that its members would not be regulated further, GCA requested an even more burdensome cost-effectiveness analysis and a three-year extension of the prohibition on new regulation.

The companies got what they wanted: The latest version of the administration bill would greatly expand the list of sources EPA must study before regulating power plants, and would prohibit further regulation until 2015. This would cripple downwind states' ability to protect their residents from power plant pollution and force them to wait until 2015 before taking action against out-of-state polluters.

"GRANDFATHER" THE DIRTIEST PLANTS: The Bush administration's original legislation would have required EPA to distribute some pollution "allowances," or rights to pollute, through an elaborate auction system. This market mechanism would have created incentives for the least efficient plants to undertake the most significant cleanup efforts to avoid paying more for allowances. But GCA complained that such an auction would "increase" polluting power plants' "compliance costs unnecessarily."

Again, the companies got what they wanted: The current bill does not include the auction provision. Instead, pollution allowances would be allocated according to how much fuel plants burned and how much pollution they emitted in the past, giving less efficient plants more (free) allowances, and eliminating any incentive to clean up.

RELAX MERCURY CONTROLS: The first administration bill would have required power plants to take steps to reduce their mercury emissions; they would not be able to get "credit" for mercury emissions reductions resulting from other cleanup efforts. This sensible requirement would have created incentives for power plants to make further, cost-effective mercury emissions reductions. But GCA wanted the bill to give its members "credit for early mercury reductions," including so-called "co-benefit reductions" that result entirely from unrelated activities at a plant, such as cutting emissions of other pollutants.

The companies got what they wanted: The latest version of the bill would allow power plants to count early and co-benefit reductions of mercury, including those otherwise required by state law or achieved incidentally from federally required cutbacks for other pollutants. GCA succeeded in weakening and delaying the bill's mercury control requirements, guaranteeing that the bill's mercury reductions would occur much later than advertised by the administration.

GET TAXPAYER SUBSIDIES FOR POLLUTING: Under the Bush administration's first legislative version, the proceeds from sales of emissions allowances would go into the U.S. Treasury -- that is, back to the taxpayers. But GCA labeled that use of the funds "a new tax on energy."

Again, the companies got what they wanted: The latest bill would send the money right back to the polluters by creating a largely unregulated Department of Energy account to fund industry efforts to develop pollution control technologies. In sum, it would pay industry to comply with preexisting laws -- at the taxpayers' expense.