The Utility Industry Response to Title IV: Generation Mix, Fuel Choice, Emissions and Costs

Abstract

The Clean Air Act Amendments of 1990 incorporate, for the first time, provisions aimed specifically at the control of acid rain. These provisions restrict emissions of sulfur dioxide and oxides of nitrogen from electric power generating stations. The restrictions on sulfur dioxide take the form of an overall cap on the aggregate emissions from major generating plants, allowing substantial flexibility in the industry's response to those restrictions. This report describes one response scenario through the year 2030, which was examined by simulation of the utility industry under assumptions consistent with a reference case that was used for analysis of the National Energy Strategy. Emissions that would result from the use of existing and new capacity and the associated additional costs of meeting demand subject to the emission limitations imposed by the Clean Air Act are projected. Fuel use effects, including coal market shifts, consistent with the response scenario are also described. These results, while dependent on specific assumptions for this scenario, provide insight into the general character of the likely utility industry response to Title IV.