Fuel Type as a Factor Influencing Compliance by Utilities under The Acid Rain Program

ABSTRACT

Passage of the 1990 Clean Air Act Amendments launched the Acid Rain Program in the United States. This initiative, based on the market mechanism of a sulfur dioxide tradable “allowance” system, was a dramatic departure from traditional command and control strategies designed to reduce air pollution emissions. Power plant managers have flexibility under the program to select and implement a variety of options to reduce emissions below mandated levels. Federal agencies have collected annual performance data for affected facilities covered by the program for a number of years. Coal-burning plants are typically greater generators of sulfur dioxide (SO₂) than oil burners of equivalent size. This study examined the effect of fuel type as a significant factor influencing a plant's achievement in reducing pollution emissions. Achievement was measured by using a derived variable, delta (A), defined as the difference between pounds of SO₂ produced divided by the energy (in million Btu) generated, for the years 1990 and 1995. Rigorous nonparametric statistical analyses were used to compare the two populations of coal-fired and oil-fired plants. Results indicated that coal-burning facilities achieved greater program success, measured by the expected value of delta, than the oil combustors for the five-year period reviewed. Since utility managers must take steps to ensure all applicable requirements of the program are met, findings of the inquiry should prove to be useful in assessing achievable emissions reductions and aid in long-range facility planning.