Cinergy Clean Air Efforts Praised

Cinergy Clean Air Efforts Praised

Dec 06 - Cincinnati Post

A report by Cinergy Corp. that endorses restrictions on so- called greenhouse gas emissions, should carry weight in the national debate over global warming, as even environmentalists are praising Cinergy's stand.

Cinergy, the parent of Cincinnati Gas & Electric and Union Light Heat & Power, and a major consumer of coal, said this week it favored restrictions on the smokestack emissions believed to cause global warming and said the company could still be profitable even with such regulations.

Cinergy's endorsement of regulation, made in a lengthy report on air quality, comes at a time when the debate over global warming has stalled, with the Bush Administration appearing hostile to further regulation of businesses.

But Cinergy officials say laws to limit the production of emissions believed to cause global warming would end uncertainty over the issue and allow them to conduct long-term planning.

The position was praised by some environmental groups normally hostile to big polluters.

"Cinergy's doing the right thing by laying out its position and doing it publicly," said Dan Bakal, director of electric power programs for Ceres, a national environmental and investor advocacy group.

Bakal said Cinergy's report was a good effort to look at climate change from a business perspective and shows that the company is willing to discuss the issues.

Cinergy concludes that a well-designed greenhouse gas policy would not have a large economic impact on the utility. That's also what most environmental research indicates, Bakal said.

The Bush Administration has opposed efforts to regulate greenhouse gases and end the uncertainty, which is actually a problem for U.S. utilities, Bakal said.

"They all know that eventually they're going to be regulated. But they don't know the details, which makes it very difficult to plan," he said.

Bakal said Cinergy's report, along with a similar earlier report issued by Columbus-based AEP, another large coal-burning utility, should help encourage other companies to do similar things.

Cinergy said complying with a cap on greenhouse gas emissions, mainly carbon dioxide, wouldn't result in large new expenditures beyond the cost of complying with already-pending caps on sulfur dioxide, nitrogen oxide and mercury.

The company will likely be able to pass through all of these costs to its electricity customers, it said.

Even past Cinergy critics had positive things to say about the report, up to a point.

"Cinergy deserves credit for acknowledging that they must begin cutting global-warming pollution," said Glen Brand, a regional spokesman for the Sierra Club based in Cincinnati. But he still faulted the utility's reliance on coal as its main source of fuel to make electricity.

"'The company's continuing failure to invest wisely in energy efficiency and cleaner energy production puts its shareholders and the general public at risk," he said. "A coal-dependent utility like Cinergy will not be able to stay profitable in the 21st century."

Cinergy needs to develop renewable energy sources to replace some of its outdated coal-fired plants, Brand said. Its report acknowledges the problem, but also makes it clear it has no intention of making those kinds of investments, he said.

The report says Cinergy will be heavily reliant on coal for the future. "It's unwise for them and their shareholders to be totally reliant on one energy source, which is dirty coal," Brand said. "That is the source of their problems as much as it's the source of their profits. A wise corporation would serve their shareholders better if they diversified."

The report is encouraging, said Eric Schaeffer, director of Environmental Integrity Project in Washington, D.C., which has been highly critical of Cinergy's performance regarding pollutants.

"Credit where credit is due," he said. "They are trying to look ahead. They are at least taking the issue seriously," said Schaeffer. He cited Cinergy's commitment to developing coal- gasification technology -- one such plant is planned for Indiana - - as particularly meaningful given Cinergy's dependence on coal.

Schaeffer noted that the federal government is expecting a massive investment in new coal-fired power plants in the coming years, mostly as a result of recent higher natural gas prices. That makes dealing with greenhouse gas regulation that much more important.

"We're getting close to the tipping point," he said.

Cinergy itself announced Thursday that it plans to either build or buy new electric power generating capacity in Ohio over the next few years to meet increasing demand and economic growth. It has filed an application with Ohio regulators to allow it to charge its electric customers to recover the cost of that added capacity.

For far more extensive news on the energy/power visit: http://www.energycentral.com .