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Forbes: Time to Replace Eisenhower-Era Power Plants

Most of us won’t put up with decades-old technology. Yet when it comes to our electricity, we’re stuck with last century’s dirty and inefficient power plants—even though cleaner and newer technologies are available. It’s time for our electric power industry to embrace the 21st century with modern, cleaner power generation.
by Mindy S. LubberForbes Sustainable Capitalism Blog Posted on Jul 22, 2011

If you had to choose between a Model T and a new Ford Fusion, which would you buy? It’s a no brainer, isn’t it? You’d buy the Fusion, just as you’d choose a Blue Ray TV over a 1950s Black and White.

Most of us won’t put up with decades-old technology. Yet when it comes to our electricity, we’re stuck with last century’s dirty and inefficient power plants—even though cleaner and newer technologies are available.

It’s time for our electric power industry to embrace the 21st century with modern, cleaner power generation sources like wind and solar, natural gas and energy efficiency—and leave the 20th century’s increasingly uneconomic coal plants behind.

Rules to update the federal Clean Air Act this year are testing the power sector’s readiness to seize the future. After a long and heated debate, the Environmental Protection Agency (EPA) finally enacted the so-called “cross-state air pollution rule,” which limits sulfur dioxide and nitrogen oxide emissions, pollutants linked to asthma, bronchitis and heart attacks.

Now up for consideration is the “air toxics rule,” which limits mercury and other hazardous air pollutants from power plants.

Once again opponents are voicing the same tired argument that power companies need a lot more time to comply, even though they’ve known the rule was coming for more than a decade. Some—like American Electric Power—are pulling out all stops to delay the rule, which they say will destroy jobs, raise energy prices and slow economic growth.

That’s nonsense. Studies show the EPA rule is technologically feasible, provides clear economic benefits and offers power companies an opportunity to modernize their aging fleets.

The power plants most endangered by these air pollution rules are the nation’s smallest, dirtiest, least-efficient plants. Most are more than 50 years old.

Continuing to rely on these plants while giving the pollutants they belch a free ride is like driving around in that Model T Ford. Why accept such antiquated technology in the 21st century?  The time to modernize the nation’s generating fleet is now.

Dozens of power companies have been preparing.  Many have been making plant retirement decisions independent of the EPA rules due to lower natural gas prices and an understanding that the future lies with cleaner generating sources.

Take Duke Energy. Its CEO Jim Rogers told investors earlier this month, “We have really mitigated a lot of the risk and the cost associated with the [EPA] program by the early steps we took.”

Similarly, Xcel’s CEO Dick Kelly told his investors, “Pursuing emission reductions for several years positions us to meet future environmental goals, and we have a variety of tools which we can do that with.”

These companies can attest that complying with the air quality rules yields potential economic benefits, including job creation, while maintaining reliability of our electric system.

Studies back them up.

A recent report by the University of Massachusetts Political Economy Research Institute found significant job creation benefits from both the air toxics and cross-state rules, with an especially large boost—nearly 300,000 jobs annually nationwide over the next five years—as Eisenhower-era power plants are replaced with cleaner, more-efficient capacity.

Pipefitters, engineers, boilermakers, construction workers and others will be needed to build new, clean power plants and install pollution control devices on others.

And consider this.  Clean Air Act rules have yielded $4 to $8 in economic benefits for every $1 spent on compliance over the past 40 years. Navigant Consulting, in fact, pegs the net annual benefits of the air toxics rule at a staggering $52.5 to $139.5 billion.

As for fears that the rules will impact power providers’ ability to keep our lights on, recent reports by M.J. Bradley and Associates and the Bipartisan Policy Center conclude that the power sector is both well-prepared and has sufficient generation capacity to maintain the reliability of our electric system.

Finally, let’s not forget that the rule aims to protect our nation’s most vulnerable citizens.  Mercury is a nerve poison that is especially harmful to children and developing fetuses. Total healthcare savings from the rule are estimated at $3.4 to $4.5 billion, no chump change in this cost-conscious era.

The air toxics rule is a long time in coming. It will provide vast public health and economic benefits, while helping the nation clean and modernize its power fleet. EPA must find the fortitude to press forward with the rule, just as it did with the cross-state air pollution rule. The future is now.

Read the post at Forbes Sustainable Capitalism Blog

Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the president of Ceres and a founding board member of the organization. She also directs Ceres’ Investor Network on Climate Risk (INCR), a group of 100 institutional investors managing nearly $10 trillion in assets focused on the business risks and opportunities of climate change. Mindy regularly speaks about corporate and investor sustainability issues to high-level leaders at the New York Stock Exchange, United Nations, World Economic Forum, Clinton Global Initiative, American Accounting Association, American Bar Association and more than 100 Fortune 500 firms. She has led negotiating teams of investors, NGOs and Fortune 500 company CEOs who have taken far-reaching positions on corporate practices to minimize carbon emissions, water use and other environmental impacts. She has briefed powerful corporate boards, from Nike to American Electric Power, on how climate change affects shareholder value.

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