Air Pollution Control Equipment Services

EIA testifies demand growth to outweigh FERC rule impact

Issue 1 and Volume 101.

EIA testifies demand growth to outweigh FERC rule impact

Dr. Jay Hakes, Energy Information Administration (EIA) administrator, has testified before the Senate Committee on Energy and Natural Resources that growing demand for electricity will have a greater impact on the environment than the recent Federal Energy Regulatory Commission (FERC) rule, which opens access to the electric transmission system to all electricity generators.

Speaking before the Senate committee`s hearing on “Competitive Change in the Electric Power Industry–Regional Implications,” in Burlington, Vt., Hakes provided results of an EIA study which supports the conclusion of FERC`s Environmental Impact Statement that the open access rule will have minimal impact on the environment. “Transmission lines into the northeastern states are already used to the maximum extent possible,” Hakes said.

“Without the availability of transmission lines to bring in electricity generated in coal-fired plants outside the region, the open access rule will have only small impacts on pollutant levels.” The study also found that excess coal-fired generating capacity in other regions that is currently available to wheel electricity into the Northeast will diminish over the next few years. EIA projects that increasing demand in local markets will require the use of this coal-fired capacity to serve those markets.

For the cases considered by EIA, NOx and carbon emissions from electric power generation are expected to increase no more than 3 percent in response to the FERC rule. Most of the additional interregional electricity flows stemming from the FERC order are expected to be from states centered around Ohio into the southeastern states. Increased power flows will occur over the next couple of years and then begin to decline as demand pressures increase in the local markets.

The growth in NOx emissions will be offset somewhat by the Environmental Protection Agency`s (EPA) plan to implement more stringent standards on many electric generators in 1996 and even more plants in 2000. The installation of control devices on electric generators will slow the upward climb of NOx emissions for several years but won`t help reduce carbon emissions which are the basis for climate change concerns.

Copies of the EIA service report, “An Analysis of FERC`s Environmental Impact Statement for Electricity Open Access and Recovery of Stranded Costs,” are available from the National Energy Information Center, Room 1F-048, Forrestal Building, 1000 Independence Ave, SW, Washington, D.C. 20585, at (202) 586-8800 (phone) or via the World Wide Web at http://www.gifia.doe.gov.