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Manufacturers
aren’t breathing easy about proposed smokestack legislation
by
Garry Kranz
Virginia Business
January
2005
Sheryl
Raulston shudders to think what could happen if Virginia
adopts a tough new state environmental law this year.
“Companies like ours that use a lot of purchased
power are going to absorb huge costs,” says Raulston,
an environmental affairs manager for International Paper,
a multinational conglomerate whose Franklin plant employs
about 1,100 people.
Fears
of spiraling energy costs are motivating Virginia manufacturers
to lobby hard to kill the Clean Smokestack Act, sponsored
by Del. John S. “Jack” Reid (R-Henrico County).
It would require coal-fired power plants to be retrofitted
with expensive new pollution-control equipment. Modeled
on a North Carolina law, it calls for emission-reduction
standards that exceed those of the federal Environmental
Protection Agency (EPA). Some electric utilities could
force customers to help foot the bill, including industrial
and commercial users that consume vast amounts of energy.
The state’s largest electric utility, Dominion
Virginia Power, has a rate freeze in effect through
2011 that prevents it from passing along additional
costs to ratepayers. But other utilities would be able
to do so under Reid’s bill, first introduced last
session. Opponents want Virginia to hold off until the
EPA publishes new clean-air standards, which could occur
as soon as February. “Once this gets into the
political realm, we fear there is a sense that because
North Carolina did this, Virginia has to too,”
says John Lee, vice president of external affairs for
Old Dominion Electric Cooperative in Glen Allen.
North Carolina passed its law two years ago. Maryland
lawmakers are considering similar action this year.
Reid has personal reasons for sponsoring the measure:
he points to a rare genetic illness that has robbed
his wife of 45 percent of her lung capacity. Yet he
couches the debate in economic logic. “I don’t
think we [can afford] to be sitting between two other
states that have this law and not have it ourselves.
This issue lends itself to making Virginia a more desirable
place,” says Reid, whose bill is endorsed by the
Sierra Club, the American Lung Association of Virginia
and other organizations.
Rather than make massive new investments in older plants,
though, some power companies may elect instead to shut
them down. That could mean a loss of good paying jobs
in hard-pressed regions. American Electric Power recently
spent $3.5 billion to equip its two older Virginia plants
— one in the Clinch River Valley and another in
Glen Lyn — with limestone scrubbers and other
environmental controls to meet existing federal regulations.
Dan Carson, the Virginia president for Columbus, Ohio-based
AEP, hints that his company may not have the stomach
for more spending. “This bill may be well-intentioned,
but the economic dislocation it will cause could be
deep and long lasting,” he says.
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