CLEAN AIR ACT OVERSIGHT

MONDAY, MAY 13, 1974

U.S. SENATE,

COMMITTEE ON PUBLIC WORKS,

SUBCOMMITTEE ON ENVIRONMENTAL POLLUTION,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to call, in room 4200, Dirksen Senate Office Building, Hon. Edmund S. Muskie (chairman) of the subcommittee) presiding.

Present: Senators Baker, Buckley, and Domenici.

OPENING STATEMENT OF HON. EDMUND S. MUSKIE, U.S. SENATOR FROM THE STATE OF MAINE

Senator MUSKIE. The committee will be in order.

I have a brief opening statement.

Today the Subcommittee on Environmental Pollution begins 8 additional days of oversight hearings on the environmental, social, and economic implications of implementation of the Clean Air Act. These are oversight hearings. The subcommittee is looking for facts. We are trying to identify problems. We will seek legislative remedies at a later time.

The subcommittee is particularly interested in those issues with major national policy ramifications. For example, I would hope we could examine the scope, impact, and interrelationship of nondegradation policy, secondary standards, deadlines, indirect source controls, and new source performance standards.

What are the potential impacts of the court decisions and EPA's proposed response on industrial, commercial, and residential development in clean air regions? Should we have a public policy which protects existing air quality values? How adequate are new source performance standards for this purpose? Should nondegradation policy be applicable to secondary sources of pollution which are byproducts of major source development?

How can nondegradation be integrated with other land-use-related regulatory policies such as section 208 of the Clean Water Act or the planning requirements of Federal transportation law?

Can secondary standards be a guide to nondegradation? Are present secondary standards adequate to protect against "known and anticipated adverse effects associated with the presence of such air pollutants in the ambient air" as required by law? Or have they been so compromised to be inadequate to guide future air quality regulations? (1)

Should air quality policy be premised on polluting up to standards or down to technology? What course is available when public health is threatened and technology is not available or allegedly too expensive?

And what are the real capabilities and costs of air pollution control technology and techniques?

What of the future? How do we assure maintenance of clean air if it exists or has been achieved? How do we regulate the pace and direction of growth to assure a clean, healthy environment?

Finally, and this is a question to which each witness and each citizen must respond: Do we, as a Nation, want clean, healthful air— air quality which protects the young, the old, the ill, and the infirm? Are we prepared as a Nation to make the changes, the commitments, and even the sacrifices necessary to guarantee that air pollution will not, in the future, endanger our health, lower our resistance to disease, reduce the value of our property, and limit the quality and diversity of our lives?

In 1970 I believed these to be viable, useful goals worthy of major national commitment. I have seen no evidence to change my view.

We have a number of witnesses this morning. I suggest, since they will all be testifying in the same general area, that it might be useful if they were all to sit at the table at once as a panel so that we could direct questions to them as a group and have a freer exchange.

First, Mr. Aubrey J. Wagner, the Chairman of the Board of Directors of the Tennessee Valley Authority; Mr. A. J. Pfister, Associate General Manager for Power, Salt River project; Mr. William Lalor, executive vice president, Southern Power Co.; Mr. Joseph Dowd, vice president and general counsel, American Electric Power; and Mr. Thomas Steele, of the National Rural Electric Cooperative Association.

Could I yield to Senator Baker for an opening statement?

Senator BAKER. Mr. Chairman, I haven't an opening statement. I would simply like to welcome Mr. Wagner and the other people on the panel to this Senate committee hearing.

The matter of clean air and abundant fuel are not necessarily inconsistent but they often appear to be. I am particularly anxious to hear the remarks of our colleague from Tennessee, Mr. Wagner, who is Chairman of the Board of Directors of the Tennessee Valley Authority, not because it is the largest power company in the world, but also because it is a Federal agency that has been created with a conservation mission as well.

I commend you, Mr. Chairman, for having these hearings. I express the regret of Senator Buckley that he is at another meeting of the committee and cannot be here at this moment. He will be here shortly. I know this record will be of great value.

Senator MUSKIE. May I say, gentlemen, before you begin, that I have asked you to come up as a panel so that you can have as much relatively uninterrupted time as possible to make your case. The subcommittee, of course, will feel free to interrupt with questions at any point, but I would hope that the extensive questioning might be reserved until the end of your statements so you can make your case with reasonable continuity in the presentation.

The second point I would like to make is that you come before this subcommittee aware, I am sure, that there are views represented here which differ from yours with respect to the Clean Air Act, its implementation, and what the goals ought to be. I would hope that that will not militate against a healthy discussion and conversation.

Thirdly, what we are involved in is serious national business. The Clean Air Act is under attack to a degree beyond any precedence since it was first written into law in 1970. Other values are being urged with an intensity that we haven't seen since the Clean Air Act was enacted in 1970. So we are involved in an exercise of balancing important national views. It is our responsibility as a committee, and that of the Congress as a whole, to achieve a wise balance of those values. As the originators, the writers, the authors of the Clean Air Act we have a responsibility to protect those, but we also have a responsibility to give due consideration to other points of view and other emphasis.

The responsibility of achieving balance rests heavily on your shoulders, too. We are going to try to insure that you are aware of that responsibility.

Because the values in which you are interested are so freely tossed about in public debate, maybe in ways that you do not think fairly present them, we have invited your testimony this morning so that you may present your points of view as you feel they should be presented. Your presentation this morning is very important, not only to those of us who are concerned about the Clean Air Act, but to you, your companies, your stockholders.

With that, may I invite Mr. Wagner to open the testimony this morning.

STATEMENT OF AUBREY J. WAGNER, CHAIRMAN, BOARD OF DIRECTORS, TENNESSEE VALLEY AUTHORITY, ACCOMPANIED BY T. L. MONTGOMERY, CHIEF, AIR QUALITY BRANCH, DIVISION OF ENVIRONMENTAL PLANNING, TVA

Mr. WAGNER. Thank you very much, Mr. Chairman.

I have with me this morning our general manager and several members of our staff, technical people, who may be able to respond to some of your precise questions in a way that I could not.

It is a pleasure to be here today and present to the subcommittee our views on what the Tennessee Valley Authority regards as critical aspects of the Clean Air Act and how they affect the Nation's continuing need for an adequate supply of clean energy.

At the outset, let me point out that TVA's dual responsibility for conservation and environmental protection on the one hand and for operating the Nation's largest electric power system on the other provides us with a unique perspective in addressing this issue. This is the sentiment that Senator Baker made at the outset, and I am grateful to him for having done that.

Indeed, it is precisely because we do carry these dual responsibilities that we believe TVA is ideally suited to help resolve some of the complex questions which must be answered if this country is to really

achieve the vitally important goal of clean air and at the same time maintain its economic viability.

A board of directors responsible only for the efficient and profitable operation of an electric utility must consider the primary interests of their stockholders. In such a setting, they may leave it to others to regulate and control the adverse effects of their operations. Agencies that regulate environmental quality are accountable to the public, and are obligated to provide standards that will result in clean air and water. However, they may lack the practical tie with operating experience essential to determining the total consequences of actions they recommend.

But for TVA there is no escape from total responsibility-and we want no escape. Our commitment and our statutory responsibility is to both a clean and safe environment and a sustained supply of energy that has become the lifeblood of this country. It is in the context of achieving a workable, lasting compatibility between these critical necessities that we come before this subcommittee today.

Since the late 1940's, when TVA built its first coal-fired powerplant, it has pioneered in the identification and resolution of stack emission problems. Our first exploratory work in developing stack gas "scrubbing" technology began over 20 years ago. We are currently in the midst of a massive program to replace existing particulate removal equipment with high efficiency electrostatic precipitators at our older plants throughout the TVA power system. Our newer plants are already so equipped.

Since 1967. TVA has carried on major research and testing programs in cooperation with the Environmental Protection Agency and its predecessor agencies seeking to develop workable stack gas scrubbing processes. These efforts include full-scale testing of a dry limestone injection system, two 1,000-kilowatt pilot plants for studying wet limestone and ammonia scrubbing, and three 10,000-kilowatt pilot plants for testing three different scrubbing systems in our powerplants. Work at our Shawnee Steam Plant in western Kentucky represents perhaps the most comprehensive scrubber pilot plant project ever undertaken.

In addition, TVA has designed and is now constructing a full-scale experimental scrubber on a 550.000-kilowatt generating unit at its Widows Creek Steam Plant in northern Alabama at a cost in excess of $42 million—a cost being paid for by revenues from the sale of TVA power.

Recognizing that a vast array of problems remain to be solved before scrubbing techniques could come on line to help meet national clean air goals, we have developed a scientifically based and test proven alternative method which can achieve national ambient air quality standards-thereby protecting public health and welfaremuch more quickly and at much less cost than any other currently available method.

We all must recognize, however, that the search for lasting ways to clean up the Nation's air, and keep it clean, must reach into other still developing technological areas. For example, it may be practical to remove sulfur from fuel before it is burned, or it could be removed during the combustion process. In our efforts to find a clean fuel,

TVA is currently involved in three coal gasification projects. We are working toward TVA participation in the development of a fluidizedbed combustion test facility involving technological developments that offer potential advantages warranting vigorous pursuit.

We are studying ways in which one or more TVA powerplants might serve as the sites for testing and developing several such "clean fuel" processes, in tandem with still further prototype work on improved scrubber technology.

We view all of these efforts as a necessary and logical part of TVA's and the Tennessee Valley's traditional role as a natural and national laboratory for seeking, testing, and finding solutions to regional problems that have national application. Indeed, we are involved today in nearly 200 programs and studies in more than a dozen broad environmental categories. Again, all of these activities are simply an accepted part of TVA's dual responsibilities to help not only the Tennessee Valley but the entire Nation achieve and sustain both economic viability and a quality in our natural environment better than we have ever known.

All of which brings us back to the purposes of these oversight hearings today. In summary, based upon our appraisal of the impact of this act on the operation of TVA's power system and the resultant effect on the total well-being of the people in the region we serve, we believe that several clear principles have emerged:

First, the ambient standards that have been set are reasonable and must be met as soon as possible.

Second, there are several methods for meeting these standards. Circumstances and needs will vary widely from plant to plant and from one section of the country to another. Any workable method for meeting these standards should be acceptable. The single prescription of a single method for the entire Nation and for existing plants as well as new installations will not work, in our judgment.

Third, one method for meeting ambient standards is to prescribe emission standards and, in the long term, if development continues, this may be necessary. In some areas it may already be the only method available for meeting the ambient needs. But in many areas, and the Tennessee Valley is one of these, there are better and far less expensive ways of meeting ambient requirements than to require continuous emission limitations.

Fourth, economics simply must be taken into account. The cost of installing chemical scrubbers is very large and in this time of sharply rising electric rates there is a limit to what the consumers, particularly low income groups, can pay for electricity. There must be a balancing of the public benefits to be achieved from requirements imposed upon electric systems and the costs which the consumers will have to bear to meet those requirements. Further, with the severe. problem of inflation now being faced by the Nation, consideration must be given to the effects of such requirements upon the inflationary spiral.

Finally, realistic time schedules must be provided for compliance. Time must be adequate to design, manufacture, and install necessary equipment, including in some cases the time to develop or perfect technology, while at the same time continuing to provide an ade