Seanator Edmund S. Muskie
Page 7

In summary, with the desulfurization technology now at hand, the Ohio EPA sees no necessity for making further modifications in the Clean Air Act regarding the maximum levels of permissible sulfur oxide emissions. No longer is there a potential collision course between the requirements of the Clean Air Act and the available technology to meet its standards. It will be necessary for Congress to determine reasonable dates for a phased and ultimate compliance with such standards, but there is no good reason to amend the Clean Air Act to recognize "intermittent controls".

I would like to thank you again for the opportunity to offer the comments and experience of the Ohio EPA to you and your Committee in this matter of major national importance. I am sure you will give the Ohio EPA's views your fullest consideration.

Very truly yours,

Ira L. Whitman

Director

ILW/ja

Senator MUSKIE. We will proceed with Mr. Thomas Steele's statement at this time.

STATEMENT OF THOMAS A. STEELE, MANAGER, ENVIRONMENTAL DEPARTMENT, DAIRYLAND POWER COOPERATIVE; ACCOMPANIED BY JOSEPH S. IVES, ENVIRONMENTAL COUNSEL, AND BRADLEY KOCH, STAFF ENGINEER, NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION

Mr. STEELE. Gentlemen, my name is Thomas A. Steele. I am manager of the Environmental Department for Dairyland Power Cooperative, La Crosse, Wis. I am accompanied today by Mr. Joseph S. Ives, environmental counsel, and Bradley Koch, staff engineer for the National Rural Electric Cooperative Association, NREČA. I am here today as a representative of NRECA and Dairyland Power Cooperative.

NRECA is the national organization of some 950 consumer-owned, nonprofit cooperatives, which deliver electricity to over 25 million people throughout sparsely populated rural acres of 46 States.

Dairyland Power Cooperative is a generating and transmission cooperative. We are owned by and provide service to 27 rural electric cooperatives in 54 counties in Wisconsin, Minnesota, Iowa, and Illinois. Electric energy is sold at wholesale rates to member distribution cooperatives, and these systems distribute it via self-owned lines to their members.

Dairyland Power Cooperative presently operates three coal-fired steam stations, a small nuclear plant, two diesel plants, one hydroelectric plant, and one oil-fired steam plant. We have a total generating capacity of approximately 700 megawatts and most of this generating capacity is required to meet our immediate needs. As a utility, we are entirely owned by the member distribution cooperatives we serve, which in turn are entirely owned by their member/consumers. We provide energy for 130,000 families. Our consumers are nearly all in rural areas. Most are farmers or non farming rural residents, with some light industry, schools, Government installations, and commercial establishments. But, probably 90 percent of our services are rural families and family farms.

All but one of our generating plants are located in the State of Wisconsin. Thus, our perspective on the Clean Air Act is from the position of a consumer owned and controlled utility serving rural low- and middle-income families in the upper midwest, with 90 percent of our generation coming from coal-fired plants.

Our member cooperatives and our own organization was formed by consumers because electric energy was needed in their areas. This need exists more strongly today than it did in the thirties and forties. Electric energy is required by the dairy farmer to process forage, to milk cows, to handle feed, produce and wastes. It is needed by the livestock farmer to heat the farrowing house, fill the silo, or to feed poultry. It is used by the crop farmer to dry grain, to ventilate storage areas, and to keep field equipment in repair. If the uses of the energy are denied the farmer, productivity will collapse-that is an

absolute certainty. Electric energy is used by the rural resident for heating, lighting, refrigeration, for operating water pumps, and dozens of other worthy, even essential, purposes. The vision of electric energy as a luxury service is a vision of someone not from our part of the world.

The Clean Air Act of 1970 has already drastically affected our cooperative. We are in the process of investing over $11 million in equipping two older coal-fired plants with up-to-date emission control equipment. We do not begrudge this expenditure and we feel our Wisconsin Department of Natural Resources has been stringent but fair in adopting ambient air quality regulations promulgated as a result of the act. We understand that other States have not been as objective as our State was in our implementation plan.

These air quality standards, according to the Environmental Protection Agency and other experts, will protect the well-being of all citizens exposed to atmospheric releases from powerplants and other facilities. Our goal has been to stay in compliance with these healthrelated standards whatever the cost. We are now in complete compliance with all primary and secondary air quality standards at all of our facilities.

Where we do have a problem, is in the new source performance standards as required by the original act and as subsequently promulgated by EPA. We watched these developments very closely and when, subsequent to the passage of the act, it was learned that the goal of Congress was to set an emission standard aproximately equivalent to that from 1 percent sulfur coal, we thought we could see our way clear for future plants.

As you know, and as we discovered, there are vast reserves of such low-sulfur coal in the western fields. Compliance at future plants would involve either efficient sulfur removal from high-sulfur coal, or design for western sub-bituminous coal.

We heard the ringing declarations of manufacturers that equipment was available to remove sulfur oxides to acceptable levels. We heard the reassurances from Government agencies that this was so. Then we began hearing from other utilities that had tried using this equipment and their reports were not as encouraging.

Reports came in regarding equipment malfunctions, extended outages, design defects, scale buildup in scrubbing devices, gross interference with boiler operation, and nearly universal unreliability.

The experience of other utilities alone did not satisfy us. We engaged in a cooperative project with a manufacturer on a scaleup to pilot stage of what seemed to be one of the more promising sulfur removal systems, a system that had been strongly recommended by EPA. We invested some of our consumers' money and much time, patience, and forbearance on this project and we now admit that the results were little different than those of other utilities or of the few manufacturers who have even reached the pilot stage.

Let me assure you that we now believe that some day reliable sulfur removal equipment will be a reality. If experience to date is an indicator, it will be achieved only at an enormous penalty in plant. efficiency, in much higher operating costs, and perhaps most important, in the total quality of the environment.

From the standpoint of economics, the sulfur removal systems which are today being advocated by the Environmental Protection Agency will add at least 20 percent to our production costs. We conservatively estimate that for a new facility which we are planning, the SO2 removal costs over the life of the facility, will approximately equal the first cost of the facility-a staggering $100 million. It should be obvious that these increased costs will be passed on to the

consumer.

We will have to tell our member systems and they will inform their consumers that the price of this essential commodity, electric power, is going up to allow the power supplier to stay in compliance with an absolutely arbitrary emission number from Washington. I emphasize that the number set by EPA for us no longer has any relationship to environmental health or welfare. It is simply and sadly enough just a number.

Today, one of our society's greatest environmental problems is solid waste disposal. The ash from coal combustion can be disposed of effectively by approved landfill operations. Some of the most hopeful sulfur removal systems would double the quantity of solid waste to be disposed of by the plant, and the waste would not be the generally inert matter contained in coal ash. Instead it would be made up of one of several quite reactive chemical constituents. The implications for solid waste storage space and future water quality are truly significant.

Thus, we examined the sulfur removal option and found it sadly wanting. We saw clearly that a low-sulfur fuel was a simpler and probably less costly solution. We were operating under the assurance that if we could make arrangements for delivery of a western coal of less than 1 percent sulfur content, we would be in the clear.

We began looking at once, because we knew we would have to build a new generating plant in the late seventies, and such a new plant would most assuredly be a new source and subject to the standards which EPA would promulgate.

Imagine, then, our shock in August 1971, when instead of the anticipated 1 percent sulfur coal restriction, the proposed new standards set a limitation of 1.2 pounds of sulfur dioxide per million Btu input. This is equivalent to six-tenths of 1 percent sulfur on a 10,000 Btu coal and less than five-tenths of 1 percent for more typical western coal. Instead of having available to us nearly the entire selection of western province lignite and sub-bituminous coals, we would be restricted to less than 30 percent of this supply. Yet, the standards were promulgated virtually unchanged and the shoe began to pinch.

It quickly became apparent to us that we would have to engage in a disasterous bidding war for those remaining acceptable coals, or the situation on sulfur removal would have to improve, or we would have to shift to oil for boiler fuel for new plants. For new utility boilers, oil can now be forgotten... Forgotten!

The removal picture has not brightened for anyone but the manufacturers of this misbegotten equipment, who have every right to be cheerful. The new source performance standards remain unchanged and coal which can comply with the standards has become as scarce as gasoline in Washington last January.

Gentlemen, our members' needs will increase, particularly with the substitution of electric energy for increasingly expensive and scarce propane and fuel oil. We will have to build a plant by 1978 and we are starting now. We will have to burn coal in that plant because it it the only fuel left.

Our chief requirement is that the act be administered in the fashion it was intended and which perhaps many of you still feel it is being administered. Our chief purpose is to leave you today with the appreciation of the fact that 1.2 pounds of sulfur dioxide per million Btu does not mean 1 percent sulfur coal in virtually unlimited supply. It means one-half percent sulfur fuel and that in scarce supply. If we must buy such fuel to serve our members, they will pay a much higher price for energy. We feel they will not like this and should not have to put up with it.

Be assured that I am not asking that air quality be endangered. I am reporting that we have already met the air standards and can also meet a reasonable emission standard, if necessary. We feel that the time is ripe to ask if the act is being administered to truly protect air quality, or to force-feed a reluctant technology of flue gas desulfurization. If vast liberties are being taken with the apparent goal of Congress, these emissions standards should be corrected.

This, then is our suggestion: That the provisions of the 1970 Clean Air Act be reviewed in light of the social, economic and environmental effects of the new source performance standards. This review should address the question of arbitrary SO2 emission limitations in relation to existing fuel supplies with the goal of keeping regional supplies of coal open as a realistic option for new steam generating plants.

It is our belief that the application of unchanged performance standards for sulfur dioxide is no longer an air quality issue, but rather becomes an issue of reasonable cost to the consumer and wise resource management. Wise use of our vast reserves of low-sulfur coal from the west and elsewhere is surely the most effective way of sustaining our energy productivity, while adequately protecting our

environment.

Thank you for this opportunity to appear here today.

Senator MUSKIE. Thank you very much, Mr. Steele. We have about 15 minutes before our noon break. I would like to make two or three observations and then yield to Senator Domenici for questions.

First of all let me make it clear that I am quite aware that enforcing air quality standards is going to involve costs in dollars and in energy. The idea that somehow as a result of your presentations we can find an answer that involves no cost is a fruitless quest. Those costs are part due to the negligence by Congress in the past, and public policymakers generally, for not recognizing the need to establish air quality goals earlier, and they represent in part the failure of industry to recognize the need for performing in accordance with more sensible environmental standards. Electrostatic precipitators have been around for a long time. Some of you gentlemen are now protesting the enormous burden of those costs in the year 1974. Of course costs have escalated since the time you could have first installed these precipitators. If you had installed them earlier, the pressures

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