p.1 

OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

224) 11-1-4 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:51:02 AM Sheet 224 of 276 
P.2 

EDISON ELECTRIC 

INSTITUTE The association of electric companies 

n n i9tn Street. N w 

Wasnmgton. 0 C 20036*3691 

Tel. (202) 778-6400 

II-1-4 

May 19, 1987 

The Honorable John D. Dingell 

Chairman. 

Committee on Energy and Commerce 

U.S. House of Representatives 

Room 2125 

Rayburn House Office Building 

Washington, D.C. 20515 

Dear John: 

A-i l 

i\v.\» jj» \ •) & J p 

I appreciated receiving a copy of your correspondence and 

other relevant documents concerning Canada's acid rain efforts 

enclosed vith your April 1, 1987 letter. In your letter, you 

raised several questions about certain claims as reported in an 

article in the March 27 edition of the Washington Times. 

Of particular concern to you was the claim that "utilities 

are extending the life of older plants beyond the normal 30- to 

40-year life span to keep their grandfathered status under the 

Clean Air Act" (emphasis added). As discussed below, this charge 

is based on a misleading assertion regarding the legal status of 

existing power plants and a misrepresentation (or simply 

ignorance) as to the life span of power plants. Accordingly, I 

cannot supply the "identity and location of the plants and units 

that are subject to [this] . . . charge" because the "charge" is 

unfounded. 

DISCUSSION 

1. The "Grandfathering" Issue 

At the outset, the assertion that older electric utility 

generating units are "grandfathered" under the Clean Air Act is 
P.3 

Honorable John D. Dingell 

May 19, 1987 

Page 2 

misleading. The Act establishes a program that requires 

attainment and maintenance of air quality levels that protect 

public health and welfare. Under this program, state 

implementation plans have been developed, using conservative 

modeling techniques, that contain individual source emission 

limitations for both old and new sources. Pursuant to the 

implementation plans adopted in each state, older units have been 

required to reduce emissions at a cost of tens of millions of 

dollars to ensure that air quality levels that protect public 

health and welfare are achieved. Moreover, some older units are 

also subject to state limitations on sulfur-in-fuel or other 

state requirements that are more stringent than the federal 

requirements. 

Older units, of course, are not subject to the 

technology-based standards that apply to new electric generating 

units built after 1971. Congress recognized that the costs to 

retrofit control technologies on older sources would in many 

cases be prohibitive as a result of, among other things, the 

physical constraints that exist in a retrofit situation. Thus, 

Congress did not "grandfather" existing sources; it imposed more 

stringent standards on new sources that could more 

cost-effectively incorporate controls into their original design. 

Reflecting the influence of Clean Air Act and state and 

local regulation on sources built before and after 1971, the 

average sulfur content of coal burned has decreased over the past 

decade by one-third. In addition, as of January 1987, scrubbers 

had been installed on about 61,000 MW of generating capacity (142 

units). 
P.4 

Honorable John D. Dingell 

May 19, 1987 

Page 3 

2. The "Normal" Life Issue 

The view that power plant units have "normal" lives of 30 to 

40 years and that utilities have been extending the lives of 

units beyond "normal" lives is simply misinformed. A survey of 

the utility industry identifying 930 units which retired prior to 

1986 shows that the age of the units at the time of retirement 

ranged from less than 20 years to greater than 65 years. The 

median age of the units was between 40. and 45 years. In sum, 

there is no uniform "normal" expected life for a power plant 

unit. 

The service life of any given unit depends upon numerous 

unit-specific factors, including the type of unit, the fuel it 

burns, and the level of maintenance it receives. Other less 

direct but equally important factors governing a unit's service 

life are the cost of capital for new construction and the need 

for new generating capacity. As a result, there is no such thing 

as a "normal" service life. Rather, the service life of. a unit 

can be determined only on a unit-specific basis in light of the 

above considerations. 

In certain cases, the factors identified above may dictate 

retirement after 40-45 years of operation; in others, a unit may 

continue to operate after 50 years in service. Many units 

constructed in the early part of the century were retired after 

about 40 years of life. The time of their retirement war 

influenced largely by advances in combustion technology that made 

it more cost-effective to build and operate new plants. In other 

words, the new plants built to replace this existing capacity 

incorporated improved combustion technology which justified the 

retirement of existing boilers with obsolete technology. 
P.5 

Honorable John D. Dingell 

May 19, 1987-

Page 4 

However, advances in the efficiency of combustion technology 

slowed considerably after the middle part of the century. As a 

result, units constructed after that time are less likely to 

become obsolete and therefore will typically have service lives 

of more than 40 years. 

Due to the replacement of obsolete boilers with modern 

combustion technology, a large portion of utility generating 

capacity is young and will not be retired by the end of the 

century. Indeed, based on industry data filed with the Energy 

Information Administration, by 1995 only about 8 percent of the 

steam electric generating capacity in this country will be 40 

years old or older even if no additional retirements take place. 

This capacity consists of smaller units (averaging about 67 

megawatts), many of which operate only during periods of peak 

demand. As a result, annual emissions from these units are 

relatively low. At the same time, these units are crucial to 

ensuring a reliable, uninterrupted supply of electricity when 

demand is highest. In view of the difficulty of siting new 

plants, the high cost of capital, the currently low annual growth 

in electricity demand, and the uncertainty of the actions of 

public service commissions, it would be difficult to replace 

these needed plants in a cost-effective way. 

After 1995, it is difficult to predict how long older 

capacity will remain-in service. This decision will depend upon 

the factors discussed above as well as the success of the Clean 

Coal Technology Program. For example, one of the objectives of 

the Clean Coal Technology Program is to develop cost-effective 

technologies for re-powering old units. If allowed to be 

commercially demonstrated and deployed, these, technologies may be 
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P.7 

Honorable John D. Dingell 

May 19, 1987 

Page 6 

efforts), use enormous amounts of water, and can generate 

tremendous amounts of sludge (a byproduct that can cause 

difficult and expensive disposal problems). These, societal costs 

will be reduced by the development and deployment of clean coal 

technologies that will address not only S02 emissions but also 

substantially reduce NOx emissions and the solid waste that is an 

inevitable side effect of controlling these air pollutants. 

If I can be of further assistance, please let me know. 

Sincerely yours, 

Thomas R. Kuhn