oil-fired plant. The Brayton Point 4 conversion is more similar to that, however. While it is not a new plant, neither is it antiquated, and there we are just substituting natural gas as the fuel.

The question, I think, is not the feasibility, and at current prices it is not even the economics, it is simply a matter of how large a portion of a region's fuel supply does one want to put on to one fuel, natural gas. We have scheduled increasing our gas commitment from 3 percent to 27 percent. If these projects go well, we are prepared to investigate going somewhat further.

Mr. STUDDS. And one final question, if I may, on renewables. You said that your RFP's generated interest from a couple of hundred developers. There clearly is no dearth of possibilities. You mentioned advanced wind, biomass, landfill methane, solar. Which of these do you think holds the most promise for New England?

Mr. Rowe. I think each of them is promising for a small niche. I understand, based on California experience, that the new generation of wind technology is economical in uses where being able to meet peak loads is not critical. As I have said previously this morning, I am a very big fan of the landfill methane projects. With biomass, it is an issue of whether you have a renewing wood base or fiber base for the use or whether you are, in fact, stripmining woods. But I think each of these technologies is promising for niche use. Fortunately or unfortunately, the technology that has the major impact on CO2 quickly tends to be the use of natural gas. Mr. STUDDS. I appreciate that. I just commend you for the initiative and imagination and hope that it is catching.

Mr. RowE. Thank you.

Mr. STUDDS. Thank you, Mr. Chairman.

Mr. SHARP. I thank the gentleman.

Mr. Rowe, our colleague, Claude Harris from Alabama, had some questions he wanted to ask you and needed to go on to another committee, and, if I might, I'll give these to you, and if you and your folks could respond to him and for our record, I would appreciate it.

Mr. Rowe. We will do that, sir.

Mr. SHARP. Fine.

[The responses to Mr. Harris's questions follow:]

Question 1. Mr. Rowe, I note in your testimony that you support a "no regrets" strategy on global climate change, are you against the use of environmental externalities, but support a carbon dioxide tax? Isn't this inconsistent?

Response. As scientific understanding of the global climate phenomena progresses, a "no regrets" strategy is prudent. This strategy merely means that we should now implement low-cost measures, such as conservation, that would not only reduce emissions of greenhouse gases, but would have additional benefits to society as well. We oppose the environmental externalities process because it is inconsistently applied by regulators and suffers from economic shortcomings including the piecemeal problem of only addressing externalities associated with regulated electric utilities. My recommendation to consider a carbon dioxide tax includes a number of conditions or assumptions: There must be an international agreement in place on global climate and greenhouse gases (this implies there must be at least some scientific consensus on the next steps to take); the conditions of the agreement must be verifiable; the tax must be broad-based; the tax must be modest and not exceed scientific evidence on the cost of damage and cost of control; and credits must be given for offsets. These conditions and assumptions should result in a scientifically justified program with a market-based lowest cost solution.

Question 2. How much would the carbon dioxide tax that you propose cost your customers in higher energy bills?

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Response. Currently, the generating units that supply our customers emit about 15 million tons of carbon dioxide annually. A carbon dioxide tax of $2 per ton would total at most $30 million annually. The resulting monthly cost to a typical residential customer using 500 kWh per month would be about $0.65.

However, this overstates the cost impact, for several reasons: By acquiring offsets at less than $2 per ton, which we believe is possible, the total tax would be lower; and by revising the dispatch of our units, taking the tax into account, we would also seek to reduce the tax's total cost. Most importantly, the tax would replace the hidden tax of externalities regulation.

Question 3. Have you calculated or do you know how much such a tax would cost the customers of other utilities in the country that are much larger than yours and may burn a lot more coal? Have you run your idea for such a tax by any other utilities?

Response. We have not calculated the cost of a carbon dioxide tax for customers of other utilities.

Question 4. The carbon dioxide tax you propose would obviously have an impact on the coal industry. Have you calculated or do you know how much such a tax would drive up the price of coal and thus the cost of electricity? Do you know how many coal miners would lose their jobs as a result of your tax?

Response. As a broad-based tax, it would apply to emissions from all types of fuels. At $2 per ton of carbon dioxide, the cost to burn a ton of coal would rise by about $5.46, the cost to burn residual oil would rise by about $1.07 per barrel, and the cost to burn natural gas would rise by about $124 per million cubic feet.

These figures do not include taxes on other greenhouse gases (e.g., methane) emitted during mining and transportation of the fuels. However, with credits for offsets, the coal industry would be in a position to reduce the tax's effects by reducing its coalbed methane emissions.

We believe the proposed tax would have far more modest impacts on the coal industry than other pending proposals to limit greenhouse gases.

Question 5. Considering the weak state of our economy, do you think we should be considering imposing another tax on the American people?

Response. The current environmental externalities process in place in a few states already operates as a "tax", and leads us to the selection of new electricity supplies from sources that may not be the most economical. The externalities "tax" particularly affects the coal industry, by making it virtually impossible to construct or purchase power from a new coal-fired facility. A broad-based modest carbon tax with allowances for offsets would provide less burden on the economy than an expansion of the use of environmental externalities as currently exists in a few states.

Question 6. I've heard from numerous investor-owned utilities, they are opposed to a carbon tax. Do you represent the industry, or just one utility in New England? Response. My testimony represents only my company's recommendations on ways to address the control of greenhouse gases at this time.

Mr. SHARP. Gentlemen, thank you very much for your time and attention to this very important matter, and we will look forward to hearing from you again. Thank you.

[Whereupon, at 12:23 p.m., the hearing was adjourned.]