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PA SIX UTILITIES GET ACID RAIN BONUS ALLOWANCES FROM EPA

Release Date: 10/05/94
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PA SIX UTILITIES GET ACID RAIN BONUS ALLOWANCES FROM EPA

FOR RELEASE: FRIDAY, SEPTEMBER 30, 1994

SIX UTILITIES GET ACID RAIN BONUS ALLOWANCES FROM EPA

EPA today announced the award of 1,902 acid rain bonus allowances to six utilities for undertaking energy efficiency and renewable energy measures. An allowance is equal to one ton of sulfur dioxide (SO2), the main ingredient in the formation of acid rain. Allowance trading is an important tool in meeting the significant acid rain reduction requirements of the Clean Air Act Amendments of 1990. Most utilities have already received their regular allowances under the Act, based on past fuel usage. On top of these regular allowances, however, bonus allowance awards are made under authority of the Conservation and Renewable Energy Reserve provisions of the Act. The Reserve, a pollution prevention effort, is a pool of 300,000 allowances set aside by Congress to reward utilities that voluntarily adopt new energy efficiency measures and renewable energy projects before acid rain program compliance deadlines kick in. Utilities awarded bonus allowances can sell them, bank them or use them for compliance with the Act's acid rain requirements, just like regular allowances. Compliance with the Act is achieved by a plant emitting less SO2 emissions than the allowances it holds. The greatest benefit to utilities from energy efficiency and renewable energy projects, regardless of whether or not they are awarded bonus allowances, is that they can reduce actual SO2 emissions, thereby freeing up regular allowances. Since SO2 allowances have a market value, avoiding emissions translates into additional allowances that the utility can sell for profit. The Reserve program also aims to overcome traditional rate making and planning policy barriers to aggressive energy efficiency and renewable energy programs. Before a utility can earn bonus allowances for energy efficient measures, its state public utility commission must have policies in place, subject to certification by the U.S. Departmeny of Energy, that make energy conservation measures profitable. Today's six awardees and number of allowances received are: Sierra Pacific, Nevada, 835 allowances received; Portland General Electric, Oregon, 220 allowances; PSI Energy, Indiana, 41 allowances; Otter Tail Power, Minnesota, 42 allowances; Rochester Gas and Electric, New York state, seven allowances; and Puget Sound Power & Light, Washington state, 757 allowances. For further technical information, contact Katya Jestin at 202-233-9189 or the Acid Rain Hotline at 202-233-9620.