We had initially hoped to use pilot tests leading directly to design of all of the scrubber units. Our pilot plant test program showed that we were on the right track in selecting a system, but also exposed numerous problems that mandated a module test program.

Pilot tests have generally shown disappointing to disastrous results when attempting to extrapolate from a pilot model to a full-sized system of 200 times the model size. Certainly it is standard practice among manufacturers to build and test full-scale prototypes prior to a commitment to final design in order to insure a reliable product.

Without front-end modular testing, neither Congress, the Environmental Protection Agency nor the utilities can be even minimally assured that the equipment will operate to its specifications. Equally important is the criteria of reliability.

Assuming the equipment does remove substantial amounts of sulfur dioxide, full-scale module testing is required to assure that at full size the system will operate reliably without substantial downtime.

The conclusion that a module test program was necessary was reached in February 1972. By August 1972 we had developed a module program, and committed to that program. It was under way by October, and an agreement was finalized in November 1972 to proceed with the test module program. The program, located at the Mohave Generating Station, is testing sulfur dioxide removal of stack gases, at an estimated expense now set in excess of $36 million.

The basic element of our plan for compliance is the testing of a full-size module. This has sometimes been referred to as a "front-end" test. It involves the operational testing of one complete module, nearly identical to each of 15 such modules which will comprise the eventual, full-scale sulfur dioxide removal system for the Navajo Generating Station.

In order to assure that a successful system will be demonstrated and that a failure will not force a long delay in the program, two quite different types of modules are being built and tested at the Mohave Generating Station.

A so-called horizontal spray tower module was scheduled for testing beginning in December 1973. It was delayed 1 month due to the forced outage of the boiler that is its source of flue gas. The shakedown testing of the horizontal module began on January 2, 1974, and, aside from the usual difficulties of starting up a new facility of this type, the equipment has been functioning well.

The vertical Turbulent Contact Absorber, or TCA, module, was scheduled for start-up on January 2, 1974, with testing to begin March 1. Up to January 23, 1974, it was on schedule.

However, on January 24, an accident occurred in which a spark ignited the rubber lining of the absorber vessel and burned out the entire lining. Our evaluation determined that the testing program will be delayed some 6 months.

After reviewing the cause of the fire and of similar occurrences in other scrubbers, it is the judgment of Bechtel Power Corp., the engineer-constructor for the Navajo Generating Station, that the construction sequencing must be revised so that all welding is completed prior to the application of the rubber lining in the absorber vessel.

The effect of the modification in construction sequencing will require an additional 4 months on the scrubber installation schedule at the Navajo Generating Station.

Senator BAKER. Do you believe that there needs to be a greater flexibility of compliance schedules? Is that the point?

Mr. PFISTER. That is correct, Senator.

We are currently evaluating the effect of the fire, the dramatic increase in delivery times for major equipment, and the construction sequencing modifications on our compliance schedule. Our present compliance plan, approved by the Environmental Protection Agency, requires final compliance of Unit No. 3 at the Navajo Generating Station by July 31, 1977.

Senator BAKER. Have you talked with EPA about that?
Mr. PFISTER. Yes.

Senator BAKER. What did they say?

Mr. PFISTER. We are currently talking to EPA about extending that time period.

Senator BAKER. Do they contend they have the authority?

Mr. PFISTER. They have the authority to do it if they find you are in noncompliance. But it takes a finding of noncompliance to put you in jeopardy before you can obtain an extension beyond July of 1977. If, as we strongly suspect, the combination of these factors, over which we have little or no control, make compliance by July 31, 1977 impossible, there is no positive mechanism-by that I mean one where you do not have to be held in noncompliance to begin with-by which the Administrator can approve extending this final date for compliance for the period of time that now appears necessary.

Our experience demonstrates the necessity for giving the Administrator flexibility in approving compliance plans so that he will take into consideration the multitude of variables that the Environmental Protection Agency has conceded as having a substantial bearing on the time schedule for compliance, but that are not required to be considered by the Clean Air Act.

We also feel that it is incumbent upon Congress to examine in depth both our energy goals and our air quality goals as expressed in the Clean Air Act and resolve the apparent contradictions that exist.

To illustrate this point, I call your attention to page 15 of the "Report of the Hearing Panel," to which I have referred earlier. In this report the panel concludes that by 1980 there is the cumulative need to install flue gas desulfurization systems on approximately 90.000 megawatts.

For example, in the application of the Clean Air Act to existing coal-fired generating stations in which the Salt River project is a participant, a total of 773 megawatts of Salt River project's coal-fired generating capacity is required to have flue gas desulfurization equipment by July of 1977.

Assuming a 6-percent decrease in efficiency as a result of this equipment, this will necessitate that Salt River project replace 46 megawatts of coal-fired generation with oil-fired generation. This would require approximately 671,000 barrels of oil annually.

However, in our judgment, the flue gas desulfurization equipment is probably not required to meet ambient air standards, and if ambient air standards will be exceeded, it will be only on infrequent occasions of adverse meteorological conditions.

A supplementary or intermittent control system could be installed at each of these generating stations to insure that the ambient air standards would never be exceeded; however, the Administrator, and a Federal court of appeals have taken the position that the Clean Air Act, except in rare cases, does not permit supplementary or intermittent control systems in lieu of flue gas desulfurization. We do not agree and Congress should resolve this question.

The FGD process decreases plant output by approximately 6 percent. Congress should reexamine the Clean Air Act to determine whether this consumptive use of coal-fired energy is warranted in view of our country's current goals for energy independence and of the availability of alternative strategies for achieving ambient air standards.

It is our position that under certain limited conditions, the State, or the Administrator, in a proper case and on a case-by-case basis, should be empowered and required to apply a "cost-benefit" test to determine whether flue gas desulfurization equipment is necessary for existing plants, or whether the alternative of what has been called a sulfur dioxide emission limitation system could be imposed.

The most disturbing aspect, in my judgment, of this apparent contradiction between our energy and our air quality goals is the uncertainty faced by utility management in everyday decisionmaking and policy formulation.

On the one hand, we are being implored by the Federal Energy Office to minimize our dependency upon oil. On the other hand, we are being required, by the Environmental Protection Agency to take actions which will substantially increase our dependency upon oil, notwithstanding the availability of an alternative technique which could be employed on an interim basis to permit an accommodation of both goals.

The Clean Air Act lacks recognition of the totality of environmental considerations. The Administrator is neither directed, nor empowered, to evaluate and factor into his decisionmaking process, environmental effects other than air quality.

I cite to you as examples the waste disposal problems inherent in the removal of sulfur dioxide from stack gas, the enormous quantities of water required in sulfur dioxide removal in an already parched Southwest, the mining and reclamation effects of recovering essential reagents such as limestone, and the effect of land use patterns by decisions of the Administrator which have the result of shifting a proposed electric generating unit from one area to another.

These are but a few examples of the secondary effects a decision may have on the environment. No one, single environmental factor, particularly air quality, can be considered in a vacuum.

Congress should consider the amendments necessary to insure proper consideration, and consequent balancing of all environmental values.

My previous comments emphasize the effect of the Clean Air Act on large coal-fired electric generation. Let me close with a few thoughts concerning the state of alternative forms of production of electric energy.

Alternative resources for the coal-fired generating units in operation, under construction, and planned, in the Southwest for all intents and purposes, are unavailable if not nonexistent. Natural gas is unavailable for new units. Existing gas-fired units are presently burning imported and domestic oil in tremendous quantities, further compounding the problem of "shortfall" and the national security and balance-of-payment consequences of our increased reliance upon foreign crude oil.

Nuclear units cannot be planned, sited, licensed, and constructed within the timeframe 1974-79. Arizona expects its first nuclear unit, if not delayed, to be on line, at the earliest, in 1981. Most major economical hydroelectric sites have been developed. Those remaining on the Colorado River are presently unavailable for development because of national policy.

While Arizona and other Southwest utilities are specifically committed to and engaging in research and development covering such forms of generation as geothermal, solar energy, and the breeder reactor, it is agreed both inside and outside the industry that such projects will not make a significant contribution for some decades

to come.

In conclusion, Mr. Chairman, Salt River project supports reasonable and rational air quality legislation. In your deliberations on the Clean Air Act, we respectfully urge the committee's consideration of the matters to which I have referred.

On behalf of the Salt River project, and particularly on behalf of the 225,000 customers we serve, thank you for the opportunity to express these views.

Senator BAKER. As a matter of interest, what alternative control strategies do you have in mind or do you think most practical for your particular operation?

Mr. PFISTER. We believe that the system developed by TVA, which is called intermittent control or supplementary control system offers an alternative strategy for assuring that the ambient air standards

are met.

Senator BAKER. How would you apply those intermittent controls or supplementary controls? I am very familiar with what TVA has in mind, but tell me how you would do it.

Mr. PFISTER. At the Navajo Generating Station we designed that plant originally so that the stacks would be high enough to provide adequate dispersion of the air contaminants.

Senator BAKER. Tall stacks would be one.

Mr. PFISTER. That would be one aspect of the alternate strategy. We would also install a sophisticated monitoring system which, coupled with a predictive meteorological capability, would be able to determine when adverse conditions are to be expected and when you might expect to exceed the ambient air standards and the operation of the plant can be controlled so as to reduce the emissions of air con

taminants during these periods when you would expect adverse meteorological conditions.

Senator BAKER. Point source monitoring would be a second?
Mr. PFISTER. That is correct.

Senator BAKER. What else?

Mr. PFISTER. We also are fortunate in the Southwest in that we are starting with very low sulfur fuel to begin with.

Senator BAKER. What is your coal supply on the average?

Mr. PFISTER. About a half of 1 percent.

Senator BAKER. You can't meet primary or secondary standards with half-percent coal?

Mr. PFISTER. We believe we can meet primary standards but we have a disagreement with EPA in that regard.

Senator BAKER. Mr. Wagner, what is your average?

Mr. WAGNER. Three or 312 percent.

Senator BAKER. I am sure there are other questions and I am sure Senator Muskie will have questions he would like to put.

In the interest of time, we will move to the next witness, who is Mr. William Lalor, of Southern Power Co.

STATEMENT OF WILLIAM G. LALOR, JR., SENIOR VICE PRESIDENT, SOUTHERN SERVICES, INC.

Mr. LALOR. My name is William G. Lalor, Jr. I am senior vice president of Southern Services, Inc., a subsidiary of the Southern Co. which also is the parent firm of four electric utilities: Alabama Power Co., Georgia Power Co., Gulf Power Co.. and Mississippi Power Co.

Those companies provide electric service to more than 2.2 million customers in most of the States of Alabama and Georgia, northwest Florida, and southeast Mississippi. I emphasize the nature of our business that of providing an essential service to the public-and the fact that more than 2 million customers are dependent on the Southern Co. system for a reliable supply of electricity.

I am grateful for this opportunity to address, in behalf of the companies I represent, and the interests of the customers they serve, how the legislative and regulatory policies of the Clean Air Act are affecting our clean air program. I know, in fact, of no legislation more important at the present time to users of electricity-virtually everyone in the Nation.

The Clean Air Act promises a tremendous additional financial burden on the American public, a public which should not have to pay for higher costs that result in little, if any, benefits; and the act threatens to extend the Nation's energy supply problem to electricity, another matter that the American people will find disturbing once they realize why it came about.

When Congress enacted the Clean Air Act Amendments of 1970, it was a time when a national commitment had been made to environmental protection--a commitment that is as valid today as it was then.

The act's purpose, which is to achieve acceptable levels of ambient air quality by 1975 can, and should be, accomplished.