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Improve the Efficiency and Reduce the Emissions of the Existing Power Plant Fleet
Under the Clean Air Act of 1970, many old, highly polluting power plants were "grandfathered": they do not need to meet the same emissions standards for nitrogen oxides, sulfur dioxide, and particulates as new plants. The 850 grandfather plants currently in operation, with a combined power output of 145,400 MW, produced about 21% of our nation's electricity in 1999. These plants emit 3–5 times as much pollution per unit of power generated as newer, coal-fired power plants and 15–50 times as much nitrogen oxides and particulates as new combined-cycle natural gas power plants. Also, these older and less efficient plants have an average heat rate of 11,025 Btus of fuel per kWh generated, compared to modern combined-cycle plants with heat rates of 7,000 or less. When the Clean Air Act was adopted, it was expected that these dirty power plants would eventually be retired. However, many utilities are continuing to operate these plants beyond their "design life" due to their low capital and operating costs. If grandfathered plants were required to meet the same emissions standards as new plants, many would be shut down. We recommend that a policy to end "grandfathering" be enacted soon but not take effect until around 2010. This phase-in period would allow owners to make plant upgrade vs. replacement decisions and then have sufficient time to implement these decisions without unduly disrupting power markets. Alternatively, the same general objectives would be achieved by adopting new emissions standards as part of a Clean Air Act "four pollutant" strategy that has been proposed in order to address sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide emissions in an integrated fashion. Such a strategy would include tradeable emissions permits, with the number of emissions allowances based in part on the phase-out of old power plants.
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