The Sempra and Intergen plants are located in close proximity to each other near Mexicali, Mexico—an area 3 miles south of the U.S.-Mexican border and Imperial County, California (see fig. 1). Final permitting and construction for both of the plants and the associated transmission lines to the United States began in 2001, and commercial operations commenced in July 2003. Fuel for the plants is provided by a 145-mile cross-border natural gas pipeline built by Sempra Energy, which began operating in September 2002. The Sempra plant, known as Termoelèctrica de Mexicali, consists of one natural gas-fired, combined-cycle power-generating unit with a total capacity of 650 megawatts. In this type of plant, electricity is produced by a combination of gas turbines and steam turbines. Heat from the gas turbine exhaust, which would otherwise be released to the atmosphere with exhaust gases, is captured and used by a heat recovery steam generator to produce steam, which in turn is used by the steam turbine to generate additional electricity. The Sempra plant operates with an export permit from the Mexican government and produces electricity exclusively for export to the United States. The facility is equipped with the latest pollution control technologies, including selective catalytic reduction systems to reduce NOX emissions and an oxidizing catalyst system to reduce carbon monoxide (CO) emissions. The Intergen plant, which consists of two natural gas-fired combined-cycle units (collectively known as the La Rosita Power Complex), has a total capacity of 1,060 megawatts. The first unit provides two-thirds of its 750 megawatt capacity to Mexico, with the remaining one-third available for export to the United States. The second unit has a generating capacity of 310 megawatts, all of which is designated for export to the U.S. market. (See fig. 2.) Originally, only the second unit was designed to include a selective catalytic reduction system, but as of April 7, 2005, all four of the combustion turbines within the two units have been equipped with these systems to control NOX emissions. ) to produce ordinary nitrogen and water vapor. An oxidizing catalyst is similar in concept to catalytic converters used in automobiles. The catalyst, normally coated with a metal, such as platinum, is used to promote a chemical reaction with the oxygen present to convert carbon monoxide into carbon dioxide and water vapor. Although no U.S. emissions requirements apply to these plants, Sempra and Intergen required a presidential permit to construct and connect the new transmission lines needed at the U.S.-Mexican border to export electricity into the United States. Because of the similarities of the proposals submitted by the companies, DOE decided to consider them together in a single environmental assessment, required as part of the permitting process. In December 2001, DOE completed the environmental assessment and issued a finding of no significant impact and presidential permits for both of the proposed projects. Following these decisions, Sempra and Intergen constructed the transmission lines and began commercial operations. However, as a result of subsequent litigation, on July 8, 2003, the U.S. District Court for the Southern District of California instructed DOE to prepare a more comprehensive environmental review, which included an assessment of the health impacts from the power plants as part of its analysis. DOE’s environmental impact statement was issued in final form in December 2004. DOE found that the proposed power plants presented a low potential for environmental impacts and published a record of decision in the Federal Register on April 25, 2005, authorizing presidential permits to be granted for both transmission lines to the respective power plants as presently designed. use of natural gas at the Sempra and Intergen facilities greatly reduces sulfur dioxide emissions compared with other fuels such as coal or oil. For example, U.S. coal contains an average of 1.6 percent sulfur, and oil burned at electric utility power plants ranges from 0.5 percent to 1.4 percent sulfur; comparatively, natural gas has less than 0.0005 percent sulfur. The emissions from the Sempra and Intergen power plants in Mexicali are comparable to emissions from similar plants recently permitted in California and are low relative to emissions from the primary sources of pollution in Imperial County, which are various forms of dust and motor vehicles. However, if the plants were located in Imperial County, they would be required, among other things, to offset their emissions by reducing emissions from other pollution sources in the region. Power plants in Mexico are not required to report to federal agencies in the United States on actual emissions of key pollutants generated during plant operations. Therefore, we believe that the best data available to estimate emissions from the Sempra and Intergen power plants comes from emission performance tests conducted by independent third-party contractors hired by the power plants. The average emissions from the Sempra and Intergen plants based on the results of the third-party testing are presented in table 2. Intergen average(US export) (Mexico) NOX (ppm) (ppm) VOC (lbs/hr) Legend: NOX = nitrogen oxides; ppm = parts per million; PM = particulate matter; lbs/hr = pounds per hour; CO = carbon monoxide; NH levels are computed based on a 1, 3, or 24- hour average. VOC emissions were undetectable during tests conducted at the plant. As shown in table 3, the average NOX emissions from the Intergen power plant were the only emissions that exceeded the range of emissions from recently permitted plants in California. This was the case, in part, because the plant was not originally designed to meet California requirements. However, as of April 7, 2005, all combustion turbines at the Intergen plant had been equipped with the selective catalytic reduction control technology for nitrogen oxide that is common in the newer California plants. With the exception of one turbine, which will continue to operate at a maximum NOX limit of 3.5 ppm, all other turbines are expected to emit NOX at a level below 2.5 ppm. According to Intergen plant officials, the last two turbines to be equipped with selective catalytic reduction systems have been meeting these levels since the systems became operational in March and April 2005, respectively. Data provided by plant officials, based on continuous monitoring of all emissions from these turbines over a 1 week period, also indicate that both turbines are achieving the expected NOX reductions. One way to assess the environmental impact of emissions from power plants is to examine the tons of pollutants they emit on an annual basis. The third-party performance tests discussed above provide the best available data to estimate annual emissions likely to occur during actual operations at the Sempra and Intergen plants because the data are based on observations of the actual equipment in operation. Other options for estimating annual emissions from these plants include using (1) the maximum allowable emissions levels for similar plants in California and (2) the emissions estimates that DOE developed during its environmental impact assessment of the Sempra and Intergen plants. Table 4 presents annual emissions estimates based on each of these three alternative operating assumptions. Under the first scenario, annual emissions levels were estimated using the values determined by third-party contractors during turbine performance tests at the Sempra and Intergen plants. For the two Intergen turbines that did not have selective catalytic reduction systems installed when the testing was conducted, we estimated annual NOX emissions using the testing values recorded for the similar turbine that was operating with such equipment. We did so because these two turbines are now equipped with selective catalytic reduction systems and their future emissions are likely to be similar to those from the turbine that was using this technology during the tests. These estimates do not take into account start-up and shutdown operations of the plant, which may contribute to increased plant emissions for approximately 1 to 2 hours. However, the total annual estimate is based on the conservative assumption that the plants are operating at maximum emission levels, 24 hours a day, 365 days a year. The actual operation of the plants, and the resulting emissions, would be less than this because of scheduled maintenance, forced outages, and varying electrical demand in California. The second estimates of annual emissions were based on maximum allowable emissions determined during the permitting process for similar California plants. These maximum allowable emissions are higher than the estimates based on third-party testing data. California grants permits to construct power plants on a case-by-case basis. As a condition of receiving a permit, the state places limits on emissions of individual pollutants. These limits are based on the use of best available control technology and take into consideration energy, environmental, and economic impacts. Under this estimating scenario, the annual estimates also account for short term variations in emissions levels that may occur during start-up and shutdown operations and are based on the conservative assumption that the plants are operating at maximum emissions levels, 24 hours a day, and 365 days a year. Another way to examine the environmental impact of a power plant is to evaluate the amount of pollution emitted per unit of electricity produced. This calculation has been used within the energy industry to measure how efficiently power plants produce electricity. As illustrated in table 6, the Sempra and Intergen plants produce much lower emissions of NOX for each megawatt of energy generated than do other power plants operating in Imperial County and the border region of Baja California, Mexico. For example, Sempra’s estimated emission rate for NOX of .04 pounds per megawatt of electricity is over 35 times lower than that rate at El Centro, the only major fuel-fired plant operating in Imperial County in 2002. If the Sempra and Intergen plants were located in Imperial County, to help improve air quality, California regulations would require, among other things, offsets for all emissions from the plants that contribute to nonattainment of the PM and ozone standards in the county. Under the specific offsetting rules established by the Imperial County Air Pollution Control District, the operators of each plant would be required to reduce emissions from other pollution sources in Imperial County by at least 1.2 tons for every ton of emissions the plants released. In addition to offsetting emissions of PMIntergen would also be required to offset all emissions of VOC, which, in combination with NOX, contribute to the formation of ozone. As shown in table 7, potential offsets identified by the Imperial County Air Pollution Control District in DOE’s environmental impact statement include (1) paving roads, (2) retrofitting emission controls on existing power plants in Imperial County, (3) funding projects designed to increase the use of natural gas in motor vehicles, (4) controlling Imperial County airport dust, and (5) retrofitting diesel engines for off-road heavy duty vehicles. According to the Air Pollution Control District, repaving approximately 23 miles of roads could reduce PM emissions in Imperial County by about 650 tons per year—more than the estimated annual PMIn addition to the potential offsets identified above for Imperial County, according to DOE, mitigation measures may be even more abundant and cost-effective if applied on the Mexican side of the border. Some potential projects include paving roads in Mexicali, Mexico; replacing older automobiles and buses with newer, less polluting ones; and converting brick kilns to run on natural gas. However, according to DOE, it does not have the authority to impose or enforce offsets in Mexico. Finally, if the power plants were located in California, the Intergen plant would likely be required to make additional equipment modifications to be consistent with other plants recently constructed in California. These modifications would include installing additional carbon monoxide control equipment and achieving a small reduction in NOX emissions in one of the plant’s four combustion turbines. Although emissions testing data indicate that Intergen’s carbon monoxide levels are generally comparable to those of California plants without this equipment, nearly all of the plants recently permitted in California have installed oxidizing catalyst systems to control carbon monoxide emissions. In addition, the Intergen plant would likely be required to lower the maximum NOX emissions in one turbine by 1.0 ppm—from 3.5 ppm to 2.5 ppm. Although this turbine is currently equipped with a selective catalytic reduction system to control NOX emissions, Intergen has stated that certain technical aspects of the design of the turbine prevent it from attaining emissions levels of 2.5 ppm. Emissions from the Sempra and Intergen power plants may contribute to adverse health impacts in Imperial County, but the extent of those impacts is unknown for several reasons. First, in its environmental impact statement, DOE did not calculate the total health impacts in the county because it did not analyze all the likely asthma-related or other health impacts from the increased pollution caused by the Sempra and Intergen plants. Second, DOE did not analyze the health impacts from increased power plant emissions on particularly susceptible populations, such as asthmatic children and low-income populations. Finally, because of uncertainty in DOE’s modeling of ozone increases due to emissions from the power plants, the health impacts related to ozone may be larger than DOE estimated. calculated that emissions from the power plants would be expected to increase asthma hospitalizations in the county by less than one case per year. However, DOE’s analysis did not quantify all of the health impacts from the increase in PM emissions. Health experts told us that the potential impact on asthmatics would be broader than the minimal increase in hospitalizations described in the environmental impact statement because hospitalization occurs only in the most acute asthma cases. According to these experts, an increase in PM Approximately 13,000 of these asthmatics experienced asthma symptoms during the previous year. The health experts we spoke with agreed that hospitalizations and other adverse health effects are part of a pyramid of potential adverse health effects. While the number of hospitalizations is represented at the top of the pyramid, other adverse health impacts such as emergency room visits, physician visits, asthma medication use, and increased asthma symptoms are layered vertically downward, with the number of people increasing in each subsequent group as you move to the bottom of the pyramid (see fig. 4). In addition, the DOE study did not address the extent to which increased emissions of particulate matter would cause other adverse health impacts, such as other respiratory or cardiovascular problems. These impacts could include chronic obstructive pulmonary disease, pneumonia, cardiovascular disease, as well as increased symptoms of upper and lower respiratory disease, decreased lung function, or premature death. According to the project manager of DOE’s analysis, the expected incidence of other adverse health effects resulting from PM exposure has not been quantified because of a lack of data. Studies funded by EPA, the Health Effects Institute, and others have concluded that certain groups are likely to be more susceptible to particulate matter than others, and therefore experience more adverse health effects. For example, these studies identified asthmatics, especially children, as a potentially susceptible subpopulation. According to data from the 2003 California Health Interview Survey, approximately 19 percent of Imperial County children ages 1 through 17 have been diagnosed with asthma, or about 9,000 children. In addition, the relationship between socioeconomic factors and asthma exacerbation has been documented in various studies. Imperial County is ranked as one of the poorest counties in California, with some of the highest poverty and unemployment rates in the state. An estimated 22 percent of the overall population lives below the national poverty level, in comparison with 13 percent statewide. Results from a 2001 California asthma report indicate that asthmatic adults with family incomes below the national poverty level are nearly twice as likely to experience symptoms every day or every week as those with incomes three times the poverty level, in part, because they have less access to health care. Finally, residents of Imperial County are currently exposed to airborne particulate pollution exceeding the Clean Air Act’s health-based National Ambient Air Quality Standard for PM that was 30 micrograms, or 63 percent higher, than the national standard of 50 micrograms per cubic meter of air, as shown in table 8. As a result, Imperial County residents can be expected to have higher incidence of adverse health effects caused by airborne particulate pollution than residents living in areas with less of that contaminant. . However, DOE did not fully explore these conditions to determine their potential health impacts. DOE believes that because the increases in emissions from the plants are below EPA’s significant impact levels any health impacts will be negligible. However, some health studies have found that even the smallest incremental increase in particulate matter air pollution increases the incidence of adverse health effects. DOE conducted air dispersion ozone modeling for the Imperial Valley- Mexicali air basin to determine what impact emissions from the Sempra and Intergen plants would have on the formation of ozone. DOE concluded, based on its modeling, that there would be no meaningful change in ozone levels as a result of the operation of the Sempra and Intergen power plants. Consequently, DOE concluded that the health impacts from ozone formation as a result of plant emissions would be minimal. However, if the modeling is not accurate, then the health impacts could be larger than DOE estimated. EPA officials have raised concerns about the accuracy of DOE’s modeling of estimated ozone increases. In its comments on DOE’s draft environmental impact statement, EPA stated that it is difficult to quantify the impact of a small number of facilities (i.e., the two power plants) on the maximum ozone concentration in an air basin. The lack of area- specific information, such as temperature, relative humidity, and levels of volatile organic compounds (an ozone precursor), in the Imperial County-Mexicali air basin makes modeling ozone formation particularly difficult. Because these data were not available, DOE used surrogate values from Phoenix, Arizona. Furthermore, DOE’s analysis relied on air monitoring data and the EPA ozone model to determine the potential influence of NO emissions—the primary pollutant emitted from the Sempra and Intergen power plants—on ozone concentrations in Imperial Valley. DOE concluded that increased NOX emissions from the plants could produce a decrease in ozone concentrations. In its comments on the draft environmental impact statement, EPA stated that peak ozone concentrations generally occur in areas away from sources of high NOX emissions, not at the monitor where high NOensure that mitigation projects are completed satisfactorily. Finally, DOE acknowledged in the environmental impact statement that mitigation measures may be more abundant and cost-effective in Mexico. However, DOE told us that while it has the authority to require the plants to take mitigation measures in the United States, it does not have the authority to require or enforce such measures in Mexico. Because the Sempra and Intergen power plants are not subject to either the federal Clean Air Act or the California Clean Air Act, they are not required to provide offsets for their emissions. In addition, relevant agreements among the United States, Canada, and Mexico may not provide adequate mechanisms to address adverse health impacts resulting from emissions from these plants. As a result, policymakers have limited options to ensure that emissions from these plants do not adversely affect the health of residents in Imperial County. Existing U.S. law provides few options to ensure that emissions from the Intergen and Sempra plants do not adversely affect the health of residents in Imperial County. Because the Intergen and Sempra plants are not located in the United States, federal and California environmental agencies do not have authority over the plants. The federal Clean Air Act contains no language extending the statute’s coverage to pollution sources that are located outside of the United States. Similarly, the text of the California Clean Air Act limits its application to pollution sources that are located in California. Because neither of these laws applies to the Sempra or Intergen plants, U.S. environmental agencies have no authority under existing law to require the plants to implement pollution control measures. Similarly, existing international agreements provide few options to ensure that emissions from the Sempra and Intergen plants do not adversely affect the health of residents of Imperial County. The governments of the United States and Mexico have ratified two agreements that are of particular importance to environmental conditions in the border region. The first was signed at La Paz, Mexico, in 1983. The La Paz Agreement creates a framework for promoting cooperation between the United States and Mexico on issues of environmental protection in the border region. For example, the agreement states that the United States and Mexico will “cooperate in the solution of the environmental problems of mutual concern in the border area,” and that high officials from the two countries will meet annually to review the agreement’s implementation. The agreement does not require either government to implement specific pollution control requirements or provide a course of action for either country to pursue if a particular project in the border region harms the health of border region inhabitants. The other environmental agreement, the North American Agreement on Environmental Cooperation (NAAEC), also provides few options to ensure that emissions from the Sempra and Intergen plants do not adversely affect the health of residents of Imperial County. The United States, Canada, and Mexico signed the NAAEC in 1993 to supplement the provisions of the North American Free Trade Agreement. The NAAEC provides a dispute resolution procedure under which the United States, Mexico, or Canada may request consultation with another party to the agreement regarding whether there has been a persistent pattern of failure by that other party to effectively enforce its environmental law. The parties must make every attempt to resolve the matter through the consultative process. However, if consultation fails to lead to a satisfactory resolution, then either party may take a series of steps that may culminate in the meeting of an impartial, five-member arbitration panel. This panel can determine whether the party complained against has persistently failed to enforce its environmental law. If the panel issues a decision finding such a persistent failure, it may formulate an action plan to remedy the enforcement failure and may ultimately impose monetary penalties if the enforcement failure persists. Thus, the NAAEC dispute resolution procedure provides an option for U.S. policymakers, but only if the Mexican government persistently fails to enforce the Mexican environmental laws that apply to the two plants. The NAAEC dispute resolution procedure does not provide a useful option for U.S. policymakers if the Intergen and Sempra plants comply with Mexican law, even if the plants adversely affect the health of the residents of Imperial County. There are some actions policymakers could take to protect Imperial County from increased emissions from the Sempra and Intergen power plants. For example, the Congress could enact legislation restricting the importation of electricity generated by power plants whose electrical output is dedicated exclusively to the United States if they do not meet certain U.S. emission and offset requirements. While this action would have benefits to air quality and health, it would also have costs, such as possibly reducing energy supplies available to southern California. In 2003 a bill was introduced in the Senate and House that would have prohibited the exportation of natural gas from the United States to Mexico for use in power plants near the U.S. border if the plants do not provide air quality protection that is at least equivalent to the protection provided by air quality requirements applicable in the United States. Each chamber referred the bill to committee; neither the Senate nor the House committee reported the bill to the full chamber for consideration. Similarly, DOE could modify its regulations that apply to applicants for presidential permit seeking to build new international transmission lines to import electricity into the United States from Mexico. The modified regulations could require that the lines connect to plants that employ specified emissions controls and obtain offsets in the United States. However, limiting the import of electricity from Mexico into California could jeopardize some electricity supplies for parts of southern California, which could be problematic especially during peak consumption periods. According to the California Independent System Operator, the demand for energy in California is growing at nearly 4 percent annually. During the summer of 2004, the peak demand record set in 1999 was broken seven times, and the California Independent System Operator believes that the record will likely fall again during the summer of 2005. Moreover, both of the above options would need to be assessed to determine if they are compliant with the North American Free Trade Agreement (NAFTA). The agreement allows either the U.S. or Mexico to restrict energy imports for a range of reasons, including protection of human life or health. However, such import restrictions must meet a variety of conditions. For example, though NAFTA recognizes a country’s right to license imports and exports of energy, any such licensing system must be consistent with NAFTA and not frustrate its overall objectives of eliminating trade barriers, promoting fair competition, and increasing investment opportunities. NAFTA also requires energy regulatory agencies to minimize disruptions to contractual relationships in applying their regulations. A third option would be for the United States and Mexico to expand cooperation under the existing binational initiative to address transboundary air pollution in the U.S.-Mexico border region by providing economic incentives, such as emissions trading, to reduce pollution. Such programs have proven successful in the United States in reducing emissions that contribute to acid rain. At the international level, the United States and Canada have developed an air pollution agreement that could possibly serve as a model for a similar agreement between the United States and Mexico. However, based on the Canadian example, developing the legal and regulatory framework needed to create a binational emissions trading program with Mexico is likely to take a significant amount of time. The United States and Canada initiated cooperative efforts in 1980 through a memorandum of understanding, and 11 years later the 1991 U.S.-Canada Air Quality Agreement identified market-based mechanisms, including emissions trading, as areas for further discussion. In April 1997, the United States and Canada agreed on a joint plan of action for addressing transboundary air pollution, expanding the initial focus on acid rain to also examine ground-level ozone and particulate matter. In 2000, the Air Quality Agreement was formally expanded to address transboundary ground-level ozone issues. In 2004, the United States and Canada initiated a joint study to examine the feasibility of establishing a binational emissions trading program. Issues being addressed include the legal authority and the air pollution monitoring, assessment, and reporting system that would be needed to implement such a program. At the state level, Texas passed legislation in 2001 that authorized the state’s environmental agency to accept reductions in emissions from brick kilns in Ciudad Juarez, Mexico, to satisfy new state emission control requirements passed by the Texas Legislature in 1999. In return for air emission allowances under Texas law, the local utility, El Paso Electric, arranged the destruction of older, high-polluting, open-top kilns and replaced them with less polluting closed-top kilns. This emission control project serves the Paso Del Norte air basin, which is officially recognized in the La Paz Agreement, and includes El Paso, Texas, and Ciudad Juarez, Mexico. Finally, another potential option is the development of a binational clean air trust fund that could provide grants and loans to support projects that would improve the air quality of U.S. and Mexican cities that share air basins in the border region. Implementing such a program could help offset emissions generated by a variety of sources, including power plants in Mexico that are not required to offset their emissions. Funds from a variety of sources, such as appropriations from both nations’ legislatures, fast-lane fees for cars and trucks at ports of entry, and fees from airports and railroads operating along the border, could be held in a joint U.S.-Mexican trust fund for distribution to states, counties, cities, or local air pollution control districts along the shared border. The binational clean air trust fund could also potentially obtain funds from power plants located in the U.S.-Mexico border region that are looking for opportunities to offset their emissions, although they are not required to do so by law. Both Intergen and Sempra have shown an interest in supporting projects aimed at improving the air quality in the border region. For example, Intergen supports an applied research grant program to improve air quality in the California–Mexico border region, and Sempra is developing a fund to support the implementation of environmental projects, such as road paving, in the border city of Mexicali, Mexico, that it expects to implement before the end of 2005. The Sempra and Intergen plants near Mexicali, Mexico, are modern power plants that use advanced air pollution control technologies. As a result, the pollution they emit is comparable to that emitted by similar plants that have recently received permits to operate in California and is low relative to dust and emissions from vehicles, the primary sources of pollution in Imperial County. Nevertheless, the plants emit some pollutants into an air basin that already does not meet some air quality standards and is home to many asthmatic children and a low-income population that may be particularly susceptible to adverse health consequences from any level of pollution increase. DOE concluded in its environmental impact statement that pollution from the plants would not result in significant health impacts in Imperial County and therefore did not require the plants to offset their emissions. However, the DOE analysis did not fully examine several issues that could have led to an assessment of a larger adverse health impact in Imperial County. In addition, if the plants were located 3 miles north in Imperial County, California, they would be required to fund projects to reduce pollution from other sources to offset their emissions regardless of whether there was a documented adverse health impact. However, now that DOE has determined that no offsets are required, options available to U.S. policymakers in the short term to directly address the existing health concerns are limited. In the long term, the United States and Mexico could implement an emissions trading program or a clean air trust fund to address pollution in the border area, but such programs are likely to take years, and require significant binational effort to develop. We provided draft copies of this report to the Department of Energy (DOE) and to the Environmental Protection Agency (EPA) for their review and comment. We received a written response from DOE’s Director, Office of Electricity Delivery and Energy Reliability. EPA provided technical comments which we incorporated in the report. DOE disagreed with our assertion that it did not analyze all of the likely asthma-related and other health impacts of increased pollution from the Sempra and Intergen power plants. Specifically, DOE stated that the environmental impact statement for the two plants (1) notes the full range of respiratory effects associated with exposure to airborne particulate matter (PM. While DOE’s environmental impact statement acknowledges that increases in PMimpact. Moreover, DOE’s analysis does not differentiate among different population subgroups in terms of their susceptibility to the effects of air pollution but instead characterizes potential adverse health effects for the population as a whole. Consequently, we continue to believe that DOE’s environmental impact statement did not address the full range of potential health impacts on susceptible populations in Imperial County. Finally, DOE does not agree that the health impacts from ozone formation may be larger than it estimated in the environmental impact statement. DOE said that it addressed EPA’s concerns regarding the uncertainty in the ozone modeling in the final environmental impact statement. However, while EPA acknowledged in its comments on the final environmental impact statement that the document clarified the limitations of the ozone modeling analysis, it also reiterated its support for off-site mitigation efforts to address these limitations to ensure that there is no net increase in air pollution in Imperial County. As a result, we continue to believe that ozone formation may have larger health impacts than estimated in the final environmental impact statement. DOE’s specific comments and our detailed responses are presented in appendix II of this report. We are sending copies of this report to the Secretary of Energy, and the Administrator of the Environmental Protection Agency, and appropriate congressional committees. We will also provide copies to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or your staffs have any questions about this report, please contact me at (202) 512-3841 or stephensonj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix III. The objectives of this report were to determine (1) how emissions from the Sempra and Intergen power plants compare to emissions from recently permitted plants in California and emissions from sources in Imperial County, and what emissions standards the plants would be subject to if they were located in Imperial County; (2) the health impacts of emissions from the power plants on Imperial County residents; and (3) what options exist for U.S. policymakers to ensure that emissions from these power plants do not adversely affect the health of Imperial County residents. To address all three of these objectives we visited the Sempra and Intergen plants in Mexicali, Mexico; interviewed plant representatives, various U.S. federal, state, and local air quality officials, and other stakeholders; and reviewed relevant documents and studies. To determine emissions from the Sempra and Intergen plants we obtained data from emissions performance tests conducted at the plants by third party contractors (GE Mostardi Platt and Air Hygiene). These tests were designed to document the average emissions of selected pollutants (nitrogen oxide, particulate matter, carbon monoxide, volatile organic compounds, and ammonia) from the combustion turbines at each of these plants. The results of these tests were reported in standard units of measurement, namely parts per million or pounds per hour. According to the contractors, they completed the tests according to Environmental Protection Agency and California-approved methods and conducted quality assurance activities related to their test results. We assessed the reliability of the data by (1) reviewing documentation of test objectives and quality control procedures provided by the third party contractors, (2) conducting interviews with plant officials to determine the scope and generalizability of the tests, and (3) reviewing reports of actual NOX emissions submitted to the Mexican government to ensure consistency with the test results. Based on this assessment, we determined that the data were sufficiently reliable for the purposes of this report. To determine annual emissions estimates from these plants, we used the results from the emissions tests to calculate the annual tonnage that these plants would be likely to emit. We computed these values based on the conservative assumption that these plants would be operating 24 hours a day, 365 days a year. In addition to the estimates obtained from the testing results, we also used the maximum allowable emission limits of comparable plants in California to develop a more conservative estimate of annual emissions from these plants. For Sempra, we utilized the Elk Hills power plant as the primary basis for developing comparative estimates. This natural gas-fired power plant is partially owned by Sempra Energy and utilizes very similar equipment and pollution control technology as the Mexicali plant. For the Intergen plant, we used a combination of comparable estimates because no similar, Intergen owned facilities were recently constructed in California. To estimate nitrogen oxide (NOX) and ammonia (NH) was estimated using the average allowable emissions limit from all comparable plants in California permitted between 2000 and 2004. Because the Intergen plant is not equipped with an oxidation catalyst, carbon monoxide (CO) was estimated using a specific plant in California, permitted in 2000, that was the only one licensed without such control equipment. Finally, because some California permits establish volatile organic compounds (VOC) limits in parts per million and others do so in pounds per hour, we were not able to develop an average for all recently permitted plants in California. For this reason, we used emissions limits from the Elk Hills power plant to estimate annual emission levels of VOC at the Intergen plant. To determine how estimated emissions from the Sempra and Intergen plants compare to recently permitted plants in California, we developed a range of maximum allowable emission limits for all natural gas-fired power plants in California with similar specifications, licensed between 2000 and 2004. This time frame was chosen because it corresponded to the dates that the Sempra and Intergen plants in Mexicali were designed, permitted, and began commercial operations. Because all California power plants are permitted on a case-by-case basis, emissions limits may vary with each project. Therefore, we used the entire range of emission limits for the 23 plants that were identified during our selection process. We then compared the range of emission limits from the 23 plants that we identified with the third party testing results we obtained from the Sempra and Intergen plants. To determine how the emissions from these plants compare to emissions from sources in Imperial County we utilized the 2004 estimated annual average emissions inventory for Imperial County developed by the California Air Resources Board. We also met with officials from the California Air Resources Board and reviewed emissions reports for stationary sources obtained from the Imperial County Air Pollution Control District. To determine the levels of nitrogen oxide emissions from the Sempra and Intergen plants in relation to existing plants in Imperial County and Baja California, Mexico, we obtained reports developed for the Mexican government that included annual emissions of nitrogen oxides based on data from the continuous emissions monitoring system on each turbine. Comparable data for the El Centro plant in Imperial County and the two Baja California plants were obtained from a report produced by the Commission for Environmental Cooperation of North America. To assess the reliability of these data sources we (1) spoke with officials at the California Air Resources Board and reviewed documentation related to data collection and quality control procedures used to develop the annual emissions inventory, and (2) corroborated the emissions data related to the El Centro plant with the EPA Clean Air Markets database. Based on these assessments, we determined that the data were sufficiently reliable for the purposes of this report. To determine what emissions standards the plants would be subject to if located in Imperial County we reviewed the principal federal regulations applicable to new power plants located in the United States and the emission limits of similar plants recently permitted in California. The primary federal regulations we reviewed were those established under EPA’s New Source Review program for new or modified major pollution sources. We reviewed selected state and local air pollution regulations because state and local agencies have responsibility for implementing specific permitting activities as part of the federal program. The state and local regulations we reviewed included the permitting conditions of several power plants licensed by the California Energy Commission to determine the standard permitting criteria and the air quality rules established by the Imperial County Air Pollution Control District for sources located in Imperial County. To identify the potential health impacts from emissions generated by the Sempra and Intergen power plants, we reviewed the health assessment in DOE’s environmental impact statement. We met with the project manager of DOE’s health assessment to gather additional information about the assessment methodology. We reviewed EPA’s comments on the environmental impact statement, and interviewed EPA officials and health experts regarding DOE’s health assessment methodology. In addition, we reviewed relevant EPA reports, and other health studies regarding the impacts of particulate matter and ozone on human health. Finally, we reviewed a recent California health survey to obtain current information on asthmatic populations in Imperial County and other California counties. To determine the policy options available to ensure that emissions from the Sempra and Intergen plants do not adversely affect the health of Imperial County residents, we reviewed the federal Clean Air Act, the California Clean Air Act, key provisions of the North American Free Trade Agreement, as well as environmental agreements between the United States and Mexico, such as the La Paz agreement, and a trilateral agreement between the United States, Mexico, and Canada—the North American Agreement on Environmental Cooperation; and academic research. We also participated in a transboundary air quality management conference where officials from various federal, state, and local agencies in the United States and Mexico met to discuss strategies to address binational air pollution. We conducted our work between September 2004 and August 2005 in accordance with generally accepted government auditing standards. The following are GAO’s comments on DOE’s written comments provided in their letter dated July 29, 2004. 1. While DOE’s environmental impact statement acknowledges that increases in PM and ozone because it does not meet air quality standards for these two pollutants. 2. Asthma hospitalizations are just one measure of potential adverse health impacts from increased emissions of particulate matter. While asthma hospitalizations are more severe and likely to occur less often than doctor visits or increased medication use for asthma, they cannot be considered representative of the “full range” of potential adverse health impacts associated with asthma in Imperial County. In addition to asthma-related adverse health effects, numerous studies have linked increased exposure to particulate matter to other non-asthma-related adverse health effects, such as chronic bronchitis, chronic lung disease, pneumonia, and cardiovascular disease. 3. We disagree with DOE that hospitalizations are the best parameter for representing impacts on asthma. While asthma hospitalizations in Imperial County may be well documented, the 2003 California Health Survey provides information on other asthma-related health impacts in Imperial County. For example, the survey contains information on the number of Imperial County residents who take medication to control asthma. In addition, the survey presents information on the number of Imperial County residents who had asthma symptoms within a specified time frame and who visited an emergency room or urgent care facility for asthma-related health problems during that time frame. Such information could have been used, along with information on hospitalizations, to create a more complete estimate of the potential asthma-related health effects from increases in pollution from the power plants. 4. The report does not use the health effects pyramid, or suggest it should be used, to compute instances of potential health effects from air pollution. However, we believe that the health effects pyramid is useful for understanding the variety of ways in which increased pollution can aggravate asthma suffering in Imperial County. In so doing, it also highlights the full range of potentially quantifiable effects related to asthma. 5. During our review of the health effects literature, we identified a number of studies that support a linear relationship between increases in particulate matter pollution and increased incidence of cardiovascular diseases. 6. Asthmatic children are not the only susceptible population mentioned in our report, and asthma hospitalization is not the only potential health impact. Consequently, we continue to believe that DOE’s environmental impact statement did not address the full range of potential health impacts on susceptible populations in Imperial County. DOE’s quantification of just one adverse health impact for the entire population of Imperial County masks the differential effects that can beset more susceptible subpopulations in the County. 7. In commenting on the final environmental impact statement, EPA acknowledged that DOE had clarified the limitations and uncertainties of the ozone modeling analysis. However, in its comments EPA said it continues to support and encourage off-site mitigation efforts to address the limitations in the ozone modeling to ensure that there is no net increase of air pollution in Imperial County. 8. We believe that EPA’s comment regarding peak ozone concentrations is relevant because it is presented in the context of EPA’s comments on the draft environmental impact statement. We also note in the report that DOE took action in response to EPA’s comment. In addition to the contact named above, Leo G. Acosta, Charles Bausell, Nancy Crothers, Brandon Haller, Ryan Lambert, Omari Norman, Kim Raheb, and Stephen Secrist made key contributions to this report.

Summary: Power plants emit pollutants that have been linked to various negative health effects. In 2003, two new power plants, owned by Sempra Energy and Intergen, began operations 3 miles south of the U.S.-Mexico border near Imperial County, California. The county does not meet some federal and state air quality standards and may be further impacted by the emissions from these plants. Although these plants export most of the electricity they produce to the United States, they are not currently required to meet any U.S. or California emissions standards. GAO was asked to determine (1) how emissions from the two plants compare with emissions from recently permitted plants in California and emissions from sources in Imperial County, and what emissions standards they would be subject to if they were located in Imperial County; (2) the health impacts of emissions from the plants on Imperial County residents; and (3) options available to U.S. policymakers to ensure that emissions from these plants do not adversely affect the health of Imperial County residents. In commenting on a draft of this report, DOE disagreed with our characterization of the limitations of their assessment of the health impact of pollution from the Sempra and Intergen power plants. We believe we have portrayed the limitations of this assessment accurately. The estimated emissions from the Sempra and Intergen power plants near Mexicali are comparable with similar plants recently permitted in California and are low relative to emissions from the primary sources of pollution in Imperial County, California, which are dust and vehicles. However, if the plants were located in Imperial County, they would be required to take steps to improve air quality by reducing emissions from other pollution sources in the region, such as paving dirt roads, because the county is not meeting certain U.S. air quality standards. Although emissions generated from the Sempra and Intergen plants may contribute to various adverse health impacts in Imperial County, the extent of such impacts is unknown. The Department of Energy (DOE) estimated that emissions from these plants may increase asthma hospitalizations by less than one per year. However, DOE did not quantify any other asthma-related impacts, such as emergency room visits or increased use of medications, which, although less severe, are likely to occur more often. In addition, DOE did not determine whether increased emissions would cause other respiratory or cardiovascular problems and the impact of particulate matter on particularly susceptible populations. Finally, the potential health impacts associated with ozone could be greater than DOE estimated because some important data needed for modeling were not available. Existing laws and international agreements may not provide adequate mechanisms to address adverse health impacts resulting from power plant emissions. Policymakers could take some actions, such as requiring plants that seek to export electricity to the United States to use specified emission controls. While this action would have benefits, it would also have costs, such as possibly reducing energy supplies available to Southern California. Long-term policy options include the development of a binational pollution reduction program or a trust fund to provide grants and loans to support air quality improvement projects. However, substantial efforts on both sides of the U.S.-Mexico border would be required to establish the legal and management framework necessary for such programs to be effective.