Under Bush, tough regulation of power industry is over

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By ROBERT TRIGAUX

© St. Petersburg Times,
published August 12, 2001

When the Environmental Protection Agency cracked down on air pollution by power companies, TECO Energy's coal-guzzling Tampa Electric Co. thought it best to jump ahead of the pack.

So in March 2000, one of Florida's worst air polluters agreed to pay a $3.5-million fine while spending $1-billion to fix its coal-fired plants and make up for past environmental damage.

But by choosing to be the early bird, TECO did not get the worm. It got the shaft.

The EPA already had sued nearly a dozen other heavy-polluting power companies targeted for similar fines and pollution clean-ups. Still other utilities were under investigation.

Now many of these companies look well positioned to escape the EPA's wrath.

Among those likely to be rescued: St. Petersburg's Florida Power, whose maintenance work at its Crystal River coal plants is under review by the EPA.

What changed? Certainly not the quality of air in America or the growing evidence of global warming.

Last year, the EPA says, Florida ranked fourth in the nation in total tons of utility-related pollution. TECO and Florida Power (now owned by Progress Energy of Raleigh, N.C.) both ranked among the top 25 polluting power companies in the nation.

The key difference is that TECO's deal was cut with the EPA during the Clinton administration.

After George W. Bush took office in January, a flurry of influential lobbying by the electric power industry began in earnest. Now the EPA's war on aging and dirty coal-driven power plants has been effectively emasculated.

Buried in the fine print of the White House's National Energy Policy, a task force initiative led by Vice President Dick Cheney to relax controls on and expand the U.S. energy market, is a directive to the Justice Department to review existing government lawsuits against polluters. Now some agreed-upon settlements with power companies, plus others that had been in the works, are in doubt.

The message: In a Bush administration keen on keeping U.S. electricity cheap and plentiful, the tough EPA crackdown is over.

The power industry's dispute with the EPA lies in how to interpret federal rules on power plant maintenance. Any utility that makes major modifications to its power plants must submit its plans to the EPA for a "new source review" -- part of the Clean Air Act.

The electric power industry says the EPA is overreaching when routine or low-level maintenance at older, coal-fired plants is considered modifications that require expensive new scrubbers and other antipollution equipment.

The EPA has argued utilities and oil refineries downplayed the extent of their plant overhauls. That way, they avoided EPA triggers for new anti-pollution controls.

That's why the EPA started suing TECO, Ohio's Cinergy, Virginia Electric and other midwestern and southern power companies laden with older and heavy-polluting coal plants.

Under pressure from Bush officials, the EPA faces a Friday deadline on how it will interpret rules requiring reduced emissions from power plants that are upgraded or expanded. Experts expect a new Bush initiative to relax enforcement of the Clean Air Act, which administration officials consider an impediment to growth in electricity generation.

On June 28, the Wall Street Journal reported that Virginia utility Dominion Resources Inc. was about to sign a consent decree with the Justice Department promising to comply with a $1.2-billion pollution-control upgrade. But government negotiators intervened and advised Dominion to wait for the outcome of the EPA review on Aug. 17.

(As recently as Thursday, the Justice Department disputed claims it has intentionally slowed action against refineries and aging power plants.)

If only TECO had not been such a Johnny on the spot last year to comply with the old EPA's demands!

Odds look pretty good it could have whittled down or even avoided the $3.5-million fine and probably had more time to upgrade its coal plants.

TECO's trying to put a positive spin on the fact that most other power companies in the EPA's sights may avoid a big financial hit.

TECO's already paid the EPA-imposed $3.5-million fine. But the Tampa company says it's busy converting its six coal-fired plants to natural gas at its Gannon power facility. The Gannon site, where an explosion killed three workers and injured dozens in April 1999, generates about 40 percent of the utility's electricity.

TECO, company spokesman Ross Bannister said Friday, has no plans to try to renegotiate its EPA settlement.

Settling with the EPA last year was the "right thing to do" at the time, he said. "We felt over the long run that environmental regulations will continue to tighten, so resolving this situation early was the most responsible thing to do."

Others in the power industry obviously disagree.

Atlanta's Southern Co., which owns Gulf Power on Florida's Panhandle, hired former Republican National Committee chairman Haley Barbour to push the power company's case with senior Bush aides.

The well-financed Edison Electric Institute and lobbyist C. Boyden Gray, who served as counsel to Vice President George Bush in the Reagan administration, also have pressed the cause of utilities and refineries.

For the Tampa Bay area and Florida, TECO's decision to switch many of its dirty, coal-fired power plants to natural gas is a welcome, if belated, environmental decision. In the 1980s and most of the 1990s, TECO's spokesman took remarkable pride in bragging how TECO's heavy dependence on coal assured the company of a low-cost and secure source of power to generate electricity.

Don't be surprised if the switch to gas later drives up electric rates for Tampa Electric customers.

Sharp demand in natural gas is outstripping supply -- hence the new push to drill near Florida in the Gulf of Mexico -- and sent prices soaring last year. And alternative sources of energy, including solar and wind power, still receive little support from the federal government.

The result? For all its pollution problems, coal is rapidly regaining popularity as a fuel -- just as the country wrestles with rising demand for power and threats of regional blackouts.

Last week in the nation's capital, the heat index routinely topped 100 degrees. Electricity demand strained regional capacities.

There's probably a political lesson here: Never debate a long-term, national energy policy during a heat wave.

- Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

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