p. 1



# OAR Box 1778
Prepped by Ollie Stewart



### Document

Number: 

# 224 ) 11-1- 4

Docket Number: 

# A-90-0 6

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



# EDISO N ELECTRI C INSTITUT E Th e associatio n o f electri ccompanie s

n n i9t n Street

. N w Wasnmgton

. 0 C 20036*369 1 Tel

. (202 ) 778-640 0 II-1- 4

Ma y 19 , 198 7

Th e Honorabl e Joh nD . Dingel l Chairman . Committe e o nEnerg y an d Commerc e U.S . Hous e o f Representative s Room 212 5 Raybur nHous e Offic e Buildin g Washington , D.C . 2051 5

Dea r John : 

# A- i l
i\v.\ » 

# jj » \ •) & J p

I appreciate d receivin g a copy o f you r correspondenc e an d othe r relevan t document s concernin g Canada' s aci d rai neffort s enclose d vit hyou r Apri l 1 , 198 7 letter . Inyou r letter , yo u raise d severa l question s abou t certai nclaim s a s reporte dina n articl e inth e Marc h2 7 editio no f th e Washingto nTimes .
O f particula r concer nt o yo u wa s th e clai m tha t "utilitie s ar e extendin g th e lif e o f olde r plant s beyon d th e norma l 30 - t o 40-yea r lif e spant o kee p thei r grandfathere d statu s unde r th e Clea nAi r Act " (emphasi s added) . A s discusse d below , thi s charg e i s base d o na misleadin g assertio nregardin g th e lega l statu s o f existin g powe r plant s an d a misrepresentatio n(or simpl y ignorance ) a s t o th e lif e spano f powe r plants . Accordingly , I
canno t suppl y

th e "identit y

and locatio no f th e plant s and unit s tha t ar e subjec t t o [this ] . . . charge " becaus e th e "charge " i s unfounded .
DISCUSSIO N
1 . Th e "Grandfathering " Issu e

At th e outset , th e assertio ntha t olde r electri c utilit y generatin g unit s ar e "grandfathered " unde r th e Clea nAi r Ac t i sP. 3



### Honorabl e Joh

nD . Dingel l Ma y 19 , 198 7 Pag e 2

misleading . The Ac t establishe s a progra m tha t require s attainmen t an

d maintenanc e of ai r qualit y level s tha t protec t publi c healt han

d welfare . Unde r thi s program , stat e implementationplan s have beendeveloped , usin g conservative modeling techniques , tha t contai nindividua l sourc e emission limitation s for bot hol dan dne w sources . Pursuan t t o th e implementationplan s adopte di neachstate , olde r unit s hav e been required t o reduc e emission s a t a cos t o f ten s o f million s of dollar s t o ensur e tha t ai r qualit y level s tha t protec t publi c healt han

d welfar e ar e achieved . Moreover , som e olde r unit s ar e als o subjec t t o stat e limitation s o nsulfur-in-fue l o r othe r stat e requirement s tha t ar e mor e stringen t tha nth e federa l requirements . Olde r units , o f course , ar e no t subjec t t o the technology-base d standard s tha t appl y to ne w electri c generating unit s buil t afte r 1971 . Congres s recognize dtha t th e cost s t

o retrofi t contro l technologie s o nolde r source s woul di nman y case s b e prohibitiv e a s a resul t of , amon g othe r things , th e physica l constraint s tha t exis t i na retrofi t situation . Thus , Congres s di d no t "grandfather " existing sources ; it impose d mor e stringen t standard s o nne w source s tha t coul d mor e cost-effectivel y

incorporat e control s int o thei r origina l design . Reflecting th

e influenc e o f CleanAi r Ac t an dstat e an

d loca l regulationo nsource s buil t befor e an dafte r 1971 , th

e averag e sulfu r conten t o f coa l burne dha s decrease d ove r th e pas t decad e b

y one-third . I

naddition , a s o f January 1987 , scrubber s ha d beeninstalle d o nabou t 61,00 0 M

W o f generating capacit y (14 2 units) .P. 4



### Honorabl e Joh

nD . Dingel l Ma y 19 , 198 7 Pag e 3

2 . The "Normal " Lif e Issu e
The vie w tha t powe r plan t unit s hav e "normal " live s of 3 0 t o 4 0 year s an

d tha t utilitie s have beenextendin g th e live s o

f unit s beyon

d "normal " live s i s simpl y misinformed . A

surve y of th e utilit y

industr

y identifying 93 0 unit s whichretired prio r t o 198 6 shows tha t th e ag e o f th

e unit s a

t th e tim e o f retiremen t ranged fro

m les s tha

n2 0 year s t o greate r tha n6 5 years . Th

e media nage o f th

e unit s wa s betwee n40 . an d 4 5 years . I

nsum , ther e i s n

o unifor

m "normal " expecte dlif e fo r a powe r plant unit . The servic e lif e of an y give nuni t depend s uponnumerou s unit-specifi c factors , includin g th e typ e of unit , th

e fue l i

t burns , an

d th e leve l o f maintenanc e i t receives . Othe r les s direc t but equall y importan t factor s governing a unit' s servic e lif e ar e th

e cos t of capita l for ne w constructionan

dth e nee d fo r ne w generating capacity . A s a result , ther e i s n o suchthin

g a s a "normal " servic e life . Rather , th e servic e lif e of . a uni t ca nb e determine d onl y

ona unit-specifi c basi s i nlight of th

e above considerations .
I ncertai ncases , th e factor s identifiedabove ma y dictat e retiremen t afte r 40-4 5 year s o f operation ; i nothers , a uni t ma y continu e t o operat e afte r 5 0 year s i nservice . Man

y unit s constructe d i

nth e earl y

par t o f th

e centur

y wer e retiredafte r abou t 4 0 year s o f life . The tim e o f thei r retiremen t wa r influenced largel y b y advance s i

ncombustiontechnolog y tha t mad e it mor e cost-effectiv e t o buil dan d operat e ne

w plants . I

nothe r words , the ne

w plant s buil t t o replac e thi s existing capacit y incorporated improved combustiontechnolog y whic hjustified th e retiremen t of existing boiler s wit hobsolet e technology .P. 5



### Honorabl e Joh

nD . Dingel l Ma y 19 , 1987 - Pag e 4

However , advance s i nth e efficiency

of combustiontechnolog y slowed considerabl y afte r th

e middl e par t of th e century . A

s a result , unit s constructe dafte r tha t tim e ar e les s likel y

t o becom e obsolet e an

d therefor e wil l typicall y hav e servic e live s of mor e tha

n4 0 years .
Du e t o th

e replacemen t o f obsolet e boiler s wit hmodern combustiontechnology , a large portio no f utilit y generating capacit y

i s youn

g an d wil l not be retiredb y th e en dof th

e century . Indeed , based o nindustr

y dat a file

dwit hth

e Energ y InformationAdministration , b y 199 5 onl y

abou t 8 percen t o f th e stea m electri c generating capacit y i nthi s countr

y wil l b

e 4 0 year s ol d or olde r evenif n o additiona l retirement s take place . Thi s capacit y

consist s of smalle r unit s (averagin g abou t 6 7 megawatts) , man

y of whic hoperat e onl y durin g period s of peak demand . As a result , annua l emission s fro m thes e unit s ar e relativel y

low . A

t th e sam e time , thes e unit s ar e crucia l to ensurin g a reliable , uninterrupte d suppl y of electricit y

whe n deman d i s highest . I

nvie w of th e difficult y

of sitin

g ne w plants , th

e hig hcos t o f capital , th e currentl y

lo w annua l growt h i nelectricit y

demand , an

d th e uncertaint y

of th e action s of publi c servic e commissions , i t woul d be difficul t t o replac e thes e needed plant s i na cost-effective way . Afte r 1995 , it i s difficul t to predic t ho w lon g olde r capacit y

wil l remain-i nservice . Thi s decisionwil l depen d upo n th e factor s discusse d abov e a s wel l a s th

e succes s of th

e Clean Coa l Technolog

y Program . Fo

r example , one of th e objective s of th e CleanCoa l Technolog y Progra m i s to develop cost-effective technologie s fo

r re-powering ol dunits . I f allowed t

o b e commerciall y

demonstrate d an

ddeployed , these , technologie s ma y b e—

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### Honorabl e Joh

nD . Dingel l Ma y 19 , 198 7 Pag e 6

efforts) , us e enormou s amount s o f water , an d ca ngenerat e tremendou s amount s o f sludg e ( a byproduc t tha t ca ncaus e difficul t an

d expensive disposa l problems) . These , societa l cost s wil l b e reduced b

y th e developmen t an

d deploymen t o f cleancoa l technologie s tha t wil l addres s no t onl y S0 2 emission s but als o substantiall y

reduc e NO

xemission s an

dth e soli dwast e tha t i s a n inevitabl e sid e effec t of controlling thes e ai r pollutants .
I f I ca nbe of furthe r assistance , pleas e le t m e know .
Sincerel y

yours ,

Thoma s R . Kuh

n