You indicated, I believe, that there was no authority in EPA requiring you to install scrubbers. You also indicated that it would cost $200 million a year to put the scrubbers on. I didn't hear any discussion of the Tennessee standards. Is there any requirement as you interpret the Tennessee standards or State implementation plan that would require different standards? Mr. WAGNER. May Dr. Montgomery respond to that? Dr. MONTGOMERY. In the State implementation plans for the States of Alabama, Tennessee and Kentucky, where we operate, the States have adopted essentially new source performance emission standards that, by the present State implementation plan as approved by EPA, must be met by mid-1975. Senator BAKER. By what? All existing plants? Dr. MONTGOMERY. All existing plants. Senator BAKER. You are saying that the State implementation plan standards in the valley States are equal or equivalent to the Federal new source requirement? Dr. MONTGOMERY. That is true, sir, for Alabama and Tennessee, which is 1.2 pounds. Senator BAKER. Is that the reason, then, that you say you have to have scrubbers, because of the State implementation plan? Dr. MONTGOMERY. Yes, sir, that is correct. The State implementation plan which has been approved by EPA requires emission limitations the same as new source performance standards for Alabama and Tennessee, and a standard almost that stringent for the State of Kentucky. So when you look at the State implementation plans as approved by EPA, we would have to meet very stringent SO2 emission standards, and since low sulfur fuel is not available the only way this could be done in many cases would be by installing scrubbers. Senator BAKER. We won't get into that. Chairman Wagner and I argue about that from time to time. I want to clarify the point that you are not dealing with a direct requirement by EPA but, rather, the indirect effect of EPA's approval of the State implementation plans which apply the new source standards to all of your steam powerplants. Dr. MONTGOMERY. Yes, sir, that is correct. Senator BAKER. Thank you. Senator MUSKIE. I am being asked to go into this executive session. I wonder, Senator Baker, if we could go on to the next witness, Mr. Pfister. I would like to get into questioning Dr. Montgomery. Senator BAKER. Why not stand in recess for a few minutes, Mr. Chairman. Senator MUSKIE. We have five long statements. If the executive session is prolonged, we will have a recess. Senator BAKER. But it would be shorter if you stayed here. Senator BAKER. Thank you, Mr. Chairman. Senator MUSKIE. Thank you. Senator BAKER [presiding]. Mr. Pfister, would you proceed with your statement? STATEMENT OF A. J. PFISTER, ASSOCIATE GENERAL MANAGER FOR POWER, SALT RIVER PROJECT, PHOENIX, ARIZ. Mr. PFISTER. Mr. Chairman, I am A. J. Pfister, associate general manager for power of the Salt River project, a publicly owned utility in Phoenix, Ariz. I am directly responsible for providing the electric energy resources for Salt River project's 225,000 electric customers in Central Arizona. Among my responsibilities are all aspects of construction, maintenance and operation of the electric system facilities of the Salt River project, including its interest in the Navajo Generating Station, the Mohave Generating Station and the Four Corners Generating Station, among others. The Salt River project is the project manager and operating agent for participants in Navajo Generating Station located approximately 5 miles east of Page, Ariz. The station consists of three coal-fired electric generating units, each having a rating of 750 mega watts. Unit No. 1 is presently in operation with Units No. 2 and No. 3 to follow in 1976 and 1977, respectively. Although I will deal principally with the impact of the Clean Air Act of 1970 on the Salt River project and its customers, I believe that my testimony is equally applicable to other utilities in Arizona and in other Western States. The Salt River project is joint participant in four coal-fired generating stations located in the States of Colorado, New Mexico, Arizona, and Nevada and has signed participation agreements to participate in additional coal-fired generating stations in Utah and Colorado. Salt River project is also completing the site selection studies for a 1.050 megawatt coal-fired generating station that will be located in Northeastern Arizona and will be solely owned by the Salt River project. Installation of flue gas desulfurization equipment is required in each of the large coal-fired generating stations in which Salt River project has an interest. The reason is State or Federal implementation plans, including the new source standards, have been adopted by the Environmental Protection Agency pursuant to the Clean Air Act. Since 1970 the Salt River project has participated in the development of flue gas desulfurization technology, and we have employed some of the Nation's foremost authorities on the subject. We have participated in an extensive research and development. program to perfect the technology of flue gas desulfurization in generating stations burning low sulphur coal under conditions that are unique to the Southwest. I will summarize our more significant involvements in the development of flue gas desulfurization technology later in this statement. Although we have made a substantial investment in flue gas desulfurization, we are nevertheless concerned about the Environmental Protection Agency's administration of the Clean Air Act; concerned about existing interpretations by the courts of that act; and concerned about deficiencies which we feel 4 years' experience with the act has demonstrated. My testimony will cover the following areas: 1. The problem of quantifying the concept of significant deterioration. 2. The time limits imposed by Congress in the Clean Air Act, and the promulgation of regulations thereunder. 3. The necessity for Congress to resolve the apparent contradictions between environmental and energy goals. 4. The need to permit greater flexibility in application of alternative techniques for achieving air quality control, such as TVA's sulfur dioxide emission limitations system. 5. The need to recognize the totality of environmental considerations in administering the Clean Air Act with a balancing of costs and benefits. You are all familiar with the U.S. Supreme Court decision in Sierra Club, et al. v. William D. Ruckelshaus, Administrator, EPA, in which the Supreme Court, without written opinion, affirmed the lower court judgment of the U.S. District Court for the District of Columbia. The district court had interpreted the Clean Air Act to require the nondegradation of air quality and to prohibit any significant deterioration of air quality which is better than the secondary ambient air quality standards established by the Administrator of the Environmental Protection Agency. The language of the Clean Air Act does not preclude deterioration, significant or not, in any area where air quality is better than the secondary standards. In our judgment the district court was incorrect. However, assuming for the purpose of discussion that the concept of significant deterioration criteria is proper, the criteria are imposed by the courts. Being "court-made" it is a meaningless term unless and until the Administrator is given definitive, workable guidelines from which he may promulgate regulations. The legal issue before the court was an interpretation of the Clean Air Act based upon legislative history and the precise language of the act. The court was asked to decide the narrow question of whether the Administrator could approve a State implementation plan which does not prohibit significant deterioration. The court was not requested to discuss, and did not choose to consider, either quantification of significant deterioration or methods for its prevention. If no definitive legislative guidelines are forthcoming relating to significant deterioration, litigation will surely ensue. Such litigation, we submit, will make the already multitudinous litigation of the Clean Air Act seem inconsequential in comparison. Perhaps the best example I can cite to you concerns the still pending Environmental Protection Agency's proposal of July 12, 1973, which appeared in the Federal Register July 16, 1973. In direct response to the Sierra Club case, the Administrator proposed four alternative methods of preventing significant air quality deterioration. The very same day the proposal appeared in the Federal Register the Sierra Club issued a news release saying it intended to return to the courts to contest all of the proposals. 35-497 74 pt. 1-2 The quantification of the term "significant deterioration," must be the responsibility of Congress. This is because the courts have mandated nondegradation and prohibited significant deterioration. The courts have done so in mere reliance upon one of the stated purposes of the act, which is "to protect and enhance the quality of the Nation's air resources. The courts have overlooked another stated purpose which is to promote the public health and welfare and the productive capacity of its population...." The "court-made" tertiary standard of significant deterioration must be quantified, not through the tedious, time-consuming manpower-wasting process of unnecessary litigation, but through a con- . gressional determination. I implore you to assess the effect that delay in quantification will have on the national economy, an economy which can ill-afford further disruptive influences. Under the "court-made" rule, economic considerations, the balancing of costs and benefits as mandated by NEPA are ignored. If nondegradation and significant deterioration are to be the exclusive bases for determining tertiary standards, then the public could well be required to pay increased costs for energy as a result of abatement measures for which the cost far exceeds the benefits gained. In the act, there is no clear directive to the Environmental Protection Agency to consider whether the cost-benefit relationship is appropriate. If the requirement is proper to have emission standards more stringent than the national primary and secondary standards, then there should be a clear, convincing demonstration that the environmental benefits justify the incurred costs. Amendment directed to this problem is urgently needed. A second area for amendment deals with the time limits imposed by Congress in the Clean Air Act, and by the Administrator in his promulgation of regulations. Information available, subsequent to passage of the act, indicates that numerous factors bear upon how quickly compliance with its requirements are capable of accomplishment. These factors include: (1) The availability of experienced and qualified craft labor; (2) The ability of industry to produce large quantities of yet unproven air quality control equipment; (3) The shortage of trained personnel to operate highly sophisticated equipment; (4) The lack of knowledge of sufficient means of disposal of waste products that are the byproduct of air quality control efforts; (5) The ability to locate large supplies of reagents, such as limestone, that are necessary in removal of sulfur dioxide; and (6) The necessary limitations upon curtailment of generating units during installation of equipment. Please consider the last factor. The ability of a utility to remove from service large generating units, which are a major part of its resources for meeting customer load, is limited by factors over which the utility has little or no control. As stated in the "Report of the Hearing Panel-National Public Hearings on Power Plant Compliance with Sulfur Oxide Air Pollu tion Regulation," U.S. Environmental Protection Agency, January, 1974, at pages 63-64: An important consideration in scheduling is the restriction on when systems can be tied into the generating facility. The actual time required to tie-in an FGD (flue gas desulfurization) system to a boiler unit is only a few weeks. However, because the boiler must be out of operation during tie-in, timing would have to be planned carefully so that the overall generating system could still produce adequate power. For a utility company which must install FGD systems at several plants the tie-in operations at each plant would have to be properly sequenced. Already long leadtimes, on pumps, transformers, switch-gear, steel, motors, wire, and other necessary equipment are extended even further, until the meeting of what may have once been realistic deadlines becomes impossible. In a time of economic dislocation, such as has been experienced in the United States during this past 6 months, due to price controls and the energy crisis, the problems are compounded. The problem of availability of craft manpower, manufacturing facilities, and trained equipment operators are magnified substantially when several major coal-fired steam electric generating stations all on the same interconnected system are on the same or similar completion schedules. This is our situation which is shared by a number of utilities in the Southwest. The Environmental Protection Agency schedules resulting from the requirements of the Clean Air Act create tremendous problems in attempting to coordinate outages of large units in order to tie in air quality control equipment and avoid outages causing inability to serve customers. The act should be amended so that the Environmental Protection Agency has the ability to direct plants not be on uniform schedules. Mr. Chairman, there is no mechanism in the Clean Air Act as it presently exists that requires the Administrator to consider the factors to which I have referred in establishing time limits for compliance. We suggest that amendment is necessary. An amendment which would direct the Administrator to consider such factors, and permit him, in his discretion, to defer compliance realistically rather than require compliance arbitrarily. As an example of the very real time problems faced by utilities in the Southwest, I would like to relate our immediate concern. The Salt River project, joining with the participants in the Navajo and Mohave Generating Stations, has spent and committed an enormous amount of money on a "front-end" module testing program in order to place final, full-scale sulfur dioxide removal equipment on these generating units and provide both adequate removal performance and practical reliability. We believe full-scale test modules, 150-160 megawatts in size, must be constructed and tested for a period of time that is sufficient to prove-up designs and operational procedures before designs of the final systems are frozen. After protracted adversary proceedings the Environmental Protection Agency has concurred with our assessment of the need for these tests. |