Bush's Idea of Easing Smog Rules Won't Help, Experts Say

Electricity: Officials point out that power plants are already producing as much as possible and aren't hindered by air quality regulations.

MARLA CONE, GARY POLAKOVIC / LA Times 25jan01

Glendale's power plant is the only one in the state that has cut output because of pollution rules, and it is expected to get a reprieve soon.

    President Bush has suggested that rolling back California's stringent smog rules would help prevent blackouts.
     According to power companies and air-quality officials, he is wrong.
     Power plants throughout California are running around the clock, cranking out as many megawatts as possible to ward off blackouts. With only one exception--a plant run by the city of Glendale that is likely to win a reprieve from anti-smog rules soon--California regulations have not short-circuited the amounts of electricity produced, according to power company representatives.
     In an interview with CNN last week, Bush said: "If there's any environmental regulations . . . preventing California from having a 100% max output at their plants--as I understand there may be--then we need to relax those standards."
     But the assertion that environmental regulations are holding back output "is absolutely false," said Richard Wheatley, spokesman for Houston-based Reliant Energy Co., which operates four Southern California power plants.
     "We're making every megawatt available on request. We factor the air quality regulations into our daily operating basis, and they are not causing us to withhold power."
     Air quality rules in the Los Angeles region have had a role in raising the cost of power. Plants here are required to install costly pollution controls or to buy emissions credits. But because only a fraction of the state's power is generated in the region, the overall price impact is limited.
     Even as Bush suggests rolling back California's rules, his home state of Texas has been cracking down on pollution from its power plants and other industries.
     Houston, the largest city in Texas, now has the worst air pollution in the country, and state officials have adopted tougher regulations to comply with federal law.
     The new rules on power plants are "as stringent as any state's, probably including California," said Commissioner Ralph Marquez of the Texas Natural Resource Conservation Commission, who was appointed by Bush.
     Power plants in the Houston area must cut emissions 93% by 2007, with almost half the reductions due by March 2003. But Marquez said the rules are not expected to shrink the electricity supply.
     "My personal prediction is we will have an oversupply, even with the new restrictions," he said.
     In California, air-quality regulators have taken a number of steps recently to avoid reducing power output. Glendale is likely to be the next beneficiary.
     The city-owned utility there has been required by pollution rules to idle two of its seven units and is generating only 60% of its capacity. If it weren't for the South Coast Air Quality Management District's smog rules, Glendale would be producing an additional 100 megawatts of power, enough to serve 100,000 households.
     "A hundred megawatts would not solve the state's problem. But it is unfortunate to see that capacity idle," said Manuel Robledo, Glendale's power management administrator.
     The city's municipal utility is unable to operate its plant at full capacity because it is the only utility in the Los Angeles Basin that chose not to participate in a smog market that gives companies more flexibility in meeting pollution limits. Because the Glendale utility is not part of that market, it must meet an annual cap on its emissions. To meet the cap, all seven of its units cannot run year-round.
     The city utility has enough power for its own needs, but would like to sell excess power elsewhere in the state. Because of transmission bottlenecks, the extra 100 megawatts would not be available for Northern California, which is the center of the state's current power shortages. Instead, the power would give Southern California more cushion from blackouts.
     Glendale is likely to be granted a temporary reprieve from those rules "in a matter of days," said AQMD Assistant Deputy Executive Officer Mohsen Nazemi. "We want to meet California's power demand and at the same time protect air quality in this basin," Nazemi said. The relief would be a short-term variance that would allow greater production during the current energy emergency.
     In recent months, air-quality agencies in California have worked with power generators several times to ensure plants can operate at full capacity.
     Last month, for example, the AQMD agreed to let AES Corp. keep three plants in Los Angeles and Orange counties running despite severe pollution violations. In return, the company agreed to install anti-smog controls and pay a record-breaking $17-million fine.
     A similar deal was worked out in August with the Los Angeles Department of Water and Power, and also between Ventura County's air-quality agency and a Reliant Energy plant in Oxnard.
     "We haven't had [production] curbed in any way by the AQMD," said Angelina Galiteva, the DWP's executive director of strategic planning. "To my knowledge, it has not been an issue."
     The deals in essence are a trade-off: In the short term, operating the plants in excess of limits could mean dirtier air, particularly in the summer. Power plants emit large volumes of nitrogen oxides, a key ingredient of smog and particle pollution. But as the new pollution controls are installed during the next couple of years, emissions will decline.
     Even if pollution regulations were cutting power supply, California would not be able to roll back any of its smog rules without approval from the federal Environmental Protection Agency.
     Under the 1990 amendments to the Clean Air Act, signed by Bush's father when he was president, the state must adhere to a plan that reduces smog to healthful levels by 2010.
     Asked Wednesday whether Bush would consider giving California a waiver of clean air rules, White House press secretary Ari Fleischer said only that it is "an option that is available to the federal government."
     Air-quality regulators say power generators in the Los Angeles Basin have known for seven years that they must reduce their emissions.
     Yet the companies delayed installing the costly catalytic equipment that would keep them under their emissions limits. Instead, they were able to exceed their limits and keep operating at full capacity by buying credits in the smog market, known as RECLAIM.
     The price of those credits has increased rapidly in recent months. Because of increasing demand, prices for the credits have climbed from a low of 8 cents per pound of pollution to today's $40 per pound, said Ron Davis, general manager of Burbank Water and Power.
     "The big impact on us has been cost," he said. "I have to charge [the state] amounts I'm embarrassed about."
     To stabilize the market, the AQMD board last week took steps toward dropping power plants from the smog market beginning this spring.
     The plant operators will no longer have to buy credits, but will have to install anti-smog equipment in the years to come.