Nov 9 - McClatchy-Tribune Regional News - Tom Henry The Blade, Toledo, Ohio

With President-elect Barack Obama taking over the White House and Democrats solidifying their control over Congress, utilities are bracing for a cap-and-trade program that rewards those firms that generate electricity without spewing so much carbon dioxide.

Carbon dioxide is the chief greenhouse gas associated with global warming. Under a cap-and-trade program, the government would limit releases of that pollutant for each utility.

Utilities prefer that program over a straight tax on carbon emissions because it provides incentives for efficiency. Under cap-and-trade, they would be allowed to buy or sell emission credits depending upon whether they can stay below their limits.

The program -- one that Mr. Obama said he supports -- is targeted at reducing emissions from coal-fired power plants. As America's largest source of electricity, but also its greatest source of carbon dioxide, coal-fired power plants produce half of the nation's power and almost 90 percent of power within industry-heavy Ohio.

Akron-based FirstEnergy Corp., which serves much of northern Ohio, figures it is in a good position to comply with whatever regulations come out of the next Congress because 40 percent of the power it generates in Ohio comes from its two nuclear plants, said Ellen Raines, a utility spokesman.

"We have a much more balanced portfolio," she said.

Nuclear accounts for 20 percent of America's electricity.

FirstEnergy owns the Davis-Besse nuclear plant near Oak Harbor, Ohio, the Perry plant east of Cleveland in Lake County, and the twin-reactor Beaver Valley nuclear complex in western Pennsylvania. Via merger several years ago, it also inherited the mothballed Three Mile Island Unit 2 facility near Harrisburg, Pa., site of the nation's worst nuclear accident in 1979.

Nuclear plants don't emit carbon dioxide during operations, though their critics say they cannot be considered a panacea for climate change because of the enormous energy that is expended mining and packaging the uranium that fuels reactor cores. The plants also require tons of concrete and steel to be built and maintained, all of which expends carbon dioxide.

The United States produces more carbon dioxide than any other country on a per capita basis, although China in 2007 surpassed America as the world's leading emitter in volume.

Faced by mounting pressure to either become less reliant on coal or operate more efficiently, the last Congress saw a smattering of proposals to regulate carbon dioxide

One was introduced in the Senate by Sen. John McCain (R., Ariz.), and former Democratic vice presidential hopeful Joe Lieberman, now a Connecticut senator registered as an independent. The McCain-Lieberman bill of 2007 was endorsed by both Mr. Obama and his rival in this year's Democratic primary, Sen. Hillary Clinton (D., N.Y.). The measure, however, died in committee.

Last summer, a similar bill introduced by Mr. Lieberman and Sen. John Warner (R., Va.) became the first to make it out of committee. It failed to pass the full Senate.

Dingell's influence

The senior member of the House, Rep. John Dingell (D., Dearborn), whose 15th Congressional District includes Monroe County, said Thursday in a letter to the Democratic Caucus that his interest in climate legislation is one reason he will seek another term as chairman of the House Committee on Energy and Commerce.

"An Obama presidency will allow us to quickly complete our work and protect the environment," Mr. Dingell wrote, adding that he supports an 80 percent reduction in carbon emissions.

"We cannot regain the skilled, high-paying manufacturing jobs around the country that George W. Bush exported until there is regulatory certainty on this matter and each day we fail to provide that is one more day before business starts reinvesting in America," Mr. Dingell wrote.

The Democrats picked up five seats in the Senate, widening their margin to a 57-40 majority. They also gained 19 seats in the House, where they will hold a 255-174 majority come January.

Ms. Raines said utilities such as FirstEnergy analyze each bill, though they will have a hard time calculating meaningful cost estimates until they have a better idea of what will emerge.

"Obviously, it's premature to say what kind of impact [a cap-and-trade program] will have on us," she said. "We'll certainly be interested in what the new administration does with carbon legislation."

Power-plant project

So what effect has the buzz over climate legislation had on existing projects, such as the coal-fired power plant that American Municipal Power-Ohio is planning to build in southern Ohio's Meigs County?

None so far.

Although AMP-Ohio said last week that its latest cost projection of $3.3 billion is $400 million more than the project's $2.9 billion estimated cost in January, it cited the rising cost of steam turbines and boilers as one of the biggest reasons.

AMP-Ohio is a nonprofit wholesale power supplier founded in 1971 to negotiate electric rates for its 120 member communities spread across Ohio, Pennsylvania, Michigan, Virginia, and West Virginia.

Twenty-five are in northwest Ohio, including Bowling Green, Napoleon, Bryan, Clyde, Deshler, Edgerton, Elmore, Genoa, Montpelier, Oak Harbor, Haskins, Holiday City, Pemberville, Pioneer, Sycamore, and Woodville.

The potential impact of the Lieberman-Warner bill was factored into the latest cost estimate. So was the need for $80 million to help guard against unexpected costs, said Kent Carson, AMP-Ohio spokesman.

Many people expect Congress to pass something tougher than the limits that would have been established under the Lieberman-Warner bill.

Mr. Obama pledged during the campaign to put America on a path toward reducing carbon-dioxide emissions by 80 percent by 2050, compared to 1990 levels.

"It's hard to define something by a standard that doesn't exist," Mr. Carson said. "To the extent [the cost of a cap-and-trade program] could be factored in, it has been."

AMP-Ohio is in final negotiations with a company it considers to be its preferred contractor for the project. It will be revealed after the contract is signed.

The rush to build power plants in developing countries, such as China and India, has "overwhelmed" steam turbine manufacturers, said Marc Gerken, AMP-Ohio president and chief executive officer.

That has pushed AMP-Ohio's anticipated startup of the new plant back to 2014, about six months later than planned. Barring any other delays construction is expected to start late next year, Mr. Carson said.

1,000 megawatts

The plant would produce 1,000 megawatts, slightly more than Davis-Besse and a little less than what DTE Energy's Fermi 2 nuclear plant northeast of Monroe produces. A single megawatt provides enough electricity for about 1,000 homes.

When the project was announced in October, 2005, the cost was pegged at $1.2 billion.

AMP-Ohio hopes to keep the plant's carbon emissions down with pollution-control technology known as Powerspan, developed by a New Hampshire company to control sulfur dioxide. Some believe it has potential as a carbon-capture device.

The technology is under research at FirstEnergy's Berger plant in eastern Ohio, the focus of $18.1 million of studies into how carbon emissions might someday be captured and sequestered underground in the Midwest.

A waste byproduct of Powerspan is ammonia sulfate, which can be crystallized into a fertilizer.

AMP-Ohio announced last year that it signed a memorandum of understanding with The Andersons of Maumee to crystallize, package, and sell the material.

Regardless how well Powerspan performs in removing carbon from the waste stream, AMP-Ohio believes the Meigs County facility will operate more efficiently than older coal-fire power plants "simply because it's newer," Mr. Carson said.

Contact Tom Henry at:

thenry@theblade.com

or 419-724-6079.

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