CEEDNews May 1997
Volume V, No. 5
An Analysis of the Proposed Information Disclosure Statements
By Suzanne Daycock
As the restructuring of the electric utility industry gains momentum across
the country, opponents of coal-fired generation continue to develop new
approaches aimed at reducing the percentage of coal-fired generation within
the overall generating resource mix. Many of these approaches have been
presented in previous editions of CEEDNews, including schemes such as
"old source" performance standards or requirements that retail electric
suppliers provide customers with a minimum amount of renewable energy
as a portion of its resource mix. In recent months, however, another approach
has begun to gain national attention and support, particularly in areas
of the country not compliant with air quality standards.
Under the banner of the National Council on Competition in the Electric
Industry, an ad hoc group of organizations and government agencies have
initiated a project to develop "product content" labeling standards.
The label would provide price, fuel and emissions information relative
to the power being delivered by retail suppliers to its customers. The
goal of this research project is to develop a uniform, market-based
product label "to promote effective consumer choice and to preserve
renewable resources, resource diversity and environmental protection".
Labeling advocates hope that, by providing customers with the price
and environmental characteristics of a particular power supplier's resource
portfolio, customers will reject suppliers whose portfolios include
high percentages of coal or nuclear generation in favor of those that
promote renewable and low-emissions resources.
Although power marketers and fossil-fuel generators are doubtful this
scheme will produce meaningful results, the project is well into the
implementation phase and is currently backed by an influential audience
of "labeling hopefuls". Organizations sponsoring this approach include
the National Association of Regulatory Utility Commissioners (NARUC)
and a federal inter-agency task force coordinated by the U.S. Department
of Energy, including representatives from the Energy Information Administration,
the Environmental Protection Agency, the Federal Energy Regulatory Commission,
the Federal Trade Commission, and the Food and Drug Administration.
In fact, the genesis of much of the current attention to this strategy
is due to a resolution adopted by NARUC at its November 1996 meetings.
The NARUC resolution urges states adopting retail competition to include
enforceable standards of disclosure and labeling allowing retail consumers
to easily compare the price, price variability, resource mix and environmental
characteristics of their electricity purchases. Since the adoption of
the resolution in New Hampshire, Massachusetts, Vermont, Rhode Island
and New Jersey called for information disclosure statements other states
have followed suit. Given the broad interest shown by New England regulators
in retail competition and in the proposed labeling scheme, the National
Council has chosen New England for an information disclosure pilot project
to test labeling information approaches with customer groups when retail
competition is implemented in early 1998.
Until recently, suppliers had little opportunity to provide input
on the labeling approach advocated by consultants to the National Council.
Most suppliers contend that they were largely unaware of activities
in this regard. However, during state regulatory proceedings in New
England, suppliers can voice their concerns about this approach.
In a recent letter to Commissioner Besser of the Massachusetts Department
of Public Utilities (DPU)—who is the designated contact for the regional
PUCs for the pilot project—a group of the wholesale energy suppliers,
distribution companies, power marketers, independent power producers
and the region's leading environmental organization raised concerns
that there has been no in-depth examination questioning what information
would be useful to most consumers. Further, the group stated that there
has been no open examination mechanisms to deliver such information
to consumers, including an analysis of the costs and administrative
burdens, as well as the benefits, that would be associated with various
forms of meaningful disclosure.
The group of concerned suppliers advocated a more thorough process
to compile information on: 1) environmentally-preferable goods, services
and product offerings that may be offered in retail electricity markets
and which have not yet been considered; 2) a scientifically-sound understanding
of the potential consumer demand through targeted market research for
any particular form of environmental disclosure for the variety of products
that may be offered; 3) the meaningfulness of various disclosure schemes
to the tracking and verification and enforcement of these schemes; and,
4) the relationship of any disclosure scheme to any "safe harbor" protection
from enforcement actions under federal and state consumer protection
CEED is actively participating in information disclosure working groups
in New England, and inroads have been made already in New Hampshire.
CEED is also a part of the supplier coalition working aggressively to
convince New England regulators of the need to consider the above threshold
issues prior to endorsing a specific pilot project to test product labels
in New England. CEED members need to be aware of the National Council
project and the possibility that this concept will be broached by environmental
or utility regulators in other member states. Members who would like
additional information on the national product labeling initiative are
encouraged to contact CEED's North Region office.
Suzanne Daycock is President of Odyssey Strategies, Inc. in Mahwah,
New Jersey and a consultant to CEED.
ELECTRIC UTILITY RESTRUCTURING
The Connecticut legislature is considering a bill that would allow retail
competition in that state. Controversy surrounding an environmental title
resulted in the deletion of environmental requirements from the act. Instead,
the legislature's environmental committees were encouraged to pursue their
agenda under cover of a separate bill. The resulting bill would impose
the most arduous conditions in the country on electric suppliers, requiring
all electricity generated or purchased for sale to end-users meet a set
of environmental standards established by the State of Connecticut. CEED
has been monitoring the progress of this bill, which is rumored to likely
die or undergo significant amendment due to the controversy surrounding
The Georgia Pubic Service Commission held a public workshop on electric
industry restructuring in Georgia. At this workshop, a representative
of the Sacramento Municipal Utility District (SMUD) called for a fossil
fuels tax specifically on coal so renewables, which he claimed are "nearly
as cheap as coal," could increase generation. He asserted that most
people were willing to pay more for clean fuels. CEED questioned the
SMUD representative on numerous points. Georgians believe this was simply
California's way of making the nation's electric rates more comparable
to California rates. Subsequent workshops are scheduled in June and
July. CEED will be present at all of these sessions to ensure that the
coal's interests are represented. Contact the South Region office for
Maryland PSC staff has released a draft report of recommendations for
restructuring the state's electric power industry to a select group
of stakeholders for comments prior to its final release. CEED reviewed
the draft and, although the report recommends retail competition, it
does not currently impose environmental requirements or restrictions
on the emerging market.
CEED began lobbying in the Commonwealth on industry restructuring legislation.
Representatives of CEED supplied key decision-makers within the state
legislature with data underscoring the importance of coal-fired generation
to New England's ability to meet regional economic development objectives.
CEED's goal is to convince Massachusetts legislators to reject proposals
by state environmental regulators and the Governor's office that would
require all generators and retail power suppliers meet state-imposed
environmental comparability standards.
CEED participated in a Commission working group to develop recommendations
for adopting a uniform environmental disclosure requirement for New
Hampshire retail suppliers. CEED joined retail suppliers and generators
in arguing that power sources and their associated emissions could not
be tracked in any meaningful manner given the future structure of the
regional electric market. Opponents further argued that attempts to
impose such a requirement will generate unnecessary costs and significantly
diminish competitors' interest in the state's retail markets. A report
was prepared and submitted to the PUC by participating staff outlining
this position and recommending that the PUC not adopt a mandatory disclosure
system at this time.
In a related matter, members of the PUC working group have taken their
arguments to a region-wide working group organized to implement a product
labeling pilot project in New England (see page 1). CEED is participating
in this stakeholder group to help to ensure that threshold issues having
to do with cost, tracking viability, emissions complexities and other
key issues are addressed before any labeling scheme is adopted for a
The Board of Public Utilities has released its final report on restructuring
the electric services industry in New Jersey. CEED has been an active
participant in this energy master plan proceeding for nearly two years
and, although the BPU continued to support positions advocated by CEED
and presented in the draft report regarding the ineffectiveness of state-imposed
environmental barriers on its marketplace, the BPU did add a recommendation
that emissions disclosure labels be provided to customers by retail
power suppliers. Further, the final report included a recommendation
that an emissions portfolio standard be imposed on state retail suppliers
should NOx emission reduction requirements not be adopted on a super-regional
The New Mexico Public Service Commission has ordered the creation of
a work group to address the various issues regarding deregulation of
the electric industry. Environmental concerns will be a major focus
of the work group. CEED's West Region will participate in this process.
The New York Public Service Commission (PSC) is hearing a series of
cases on the phase-in of retail competition for all of the state's utilities.
Several suggested settlements have been opposed on the basis that the
proposals favor older coal plants, and provide insufficient funding
The NRDC, Pace Energy Project, Sierra Club and fifteen other groups
are attempting to impose the same requirements CEED has been battling
in New England states for the last year. There is a consistent, well-organized
effort to force implementation of new source performance standards on
older plants, support renewables, and to require emission labeling and
portfolio requirements. It was clear early in the process that the group
intends to achieve victories in the more sympathetic New England states,
then take the program to the coal-consuming states of Pennsylvania and
New York, which has now occurred. CEED has already intervened in Pennsylvania
proceedings, and will take appropriate steps in New York.
The Oklahoma legislature passed an electric utility deregulation bill
to adopt retail wheeling in 2002. While the bill does not contain any
language that might bias the market against coal use, it does call for
several studies between now and 2002, one of which will address "stranded
benefits". The stranded benefits are defined as those programs currently
in place at the Oklahoma Corporation Commission. CEED will participate
in this interim study to prevent bias against coal.
This week CEED filed petitions to intervene in the restructuring filings
of Pennsylvania Power & Light and Pennsylvania Electric Company to ensure
that coal interests under the newly enacted Electricity Generation Customers
Choice and Competition Act are not undermined by parties to the proceedings.
In particular, CEED is concerned about participation by anti-coal groups
who failed to achieve their goals during the legislative debate on the
new Act. We will continue to monitor these restructuring proceedings
and present testimony, if necessary.
A lobbying and public relations effort is underway in Texas to ensure
coal-fired generation in the largest coal consuming state is not adversely
impacted by restructuring. Editorials on The Myth of the Dirty Power
Plant have run in numerous Texas newspapers. In the articles, CEED dispels
the notion that restructuring will harm the environment. Additionally,
CEED and its members have visited editorial boards in Houston, San Antonio,
Victoria, and Fort Worth, as well as the capitol bureaus of all major
newspapers. The restructuring bill, as of print time, will not likely
pass in this session.
The Vermont legislature will adjourn without passing an industry restructuring
bill. The proposed bill would have imposed renewable and emission portfolio
standards on the state's retail electric suppliers and required emissions
disclosure labeling. CEED will continue to work with other industry
stakeholders on this issue and will monitor the progress of any bill
that is reintroduced when the legislative session begins in January.
Legislative: After a troublesome beginning, the 1997
Colorado legislature concluded with several bills sent to Governor Romer
that will benefit coal-fired generation. Specifically, one bill creates
legislative oversight of the Colorado Air Director's participation in
any multi-state air quality organizations (see WRAP report). Another bill
calls for an interim legislative committee to determine a measurable visibility
standard for Class I areas in the state. Since coal emissions are a major
target of visibility protection advocates, CEED will be active with this
Siting Bill: Legislation to prohibit future facilities
siting in the state passed a Louisiana House Committee, but was not
passed by the full House. The bill required an Environmental Impact
Statement (EIS) that with vastly expanded research and analysis, including
a list of:
Upon completion of the proposed EIS public hearings would take place.
CEED worked with the Louisiana Association of Business and Industry in
opposition to this legislation.
- all pollutants that may be generated;
- annual quantities allowed;
- adverse health effects;
- an analysis of residents at risk within two miles of the facility;
- analysis of risks to residents within five miles in worst-case accidental
- a map showing environmentally sensitive areas and how the facility
could affect them; and,
- a list of any schools, day care, hospitals, etc. within two miles
and how the facility may affect them.
Plant Siting: Opponents of the University of Minnesota's
proposed renovated steam plant for the Minneapolis campus have reportedly
given up after four years of legislative attempts to kill the project.
CEED has worked with the University throughout the battle to support
continuation of the multi-fuel project.
Energy Plan: During the first year of his administration,
New York Governor Pataki advanced legislation to abolish the Energy
office, and created the Energy Research Development Authority. Recently,
the Board announced it would update the state's 1994 Energy Plan. A
draft is currently being developed and it may be reviewed as early as
this summer. CEED will participate in the process to ensure that coal's
message is heard.
Meeting: CEED facilitated a meeting of Ohio members
from the coal, rail and utility sectors to review issues affecting Ohio
directly, as well as several proposed regional legislative, regulatory
and litigation matters. Seventeen CEED members spent several hours in
open, informative discussions to help direct CEED's current and future
activities. As a result of the discussions, CEED has already provided
the Ohio PUC with information concerning coal's role in a restructured
energy market. CEED wishes to thank all of our members who took the
time to meet in Columbus.
Legislative: HB 1229, which prohibits a Governor or
their designee from serving on, or expending any funds for the Ozone
Transport Commission (OTC), was referred to the Committee on Environmental
Resources and Energy. This is the first legislation of its type pursued
in any of the Ozone Transport states, and could create an interesting
situation as the OTC proceeds to develop implementation of the Phase
III 75% default provision.
Environmental Education: CEED presented coal educational
materials to nearly 100 teachers from across Texas at a business and
state agency sponsored Environmental Education Conference. A Question
of Balance was the theme of the conference, which drew visible protest
from groups opposing fossil fuel use. Its time teachers learn the truth
about the strides Texas business is making in cleaning our environment.
The conference ended with a meeting between program participants and
state school board officials on proposed changes to text books.
Coal Use Tax: CEED reported last month on a tax unfairly
aimed at coal use in Texas. The legislation, which started as a stand-alone
bill, was combined into the massive school funding/property tax relief
bill pushed by the Governor. The bill, which calls for a 7.5% sales
tax on all coal and lignite, was changed in committee to include all
transportation costs. The bill was then amended on the floor of the
House to remove lignite from the tax. This still leaves a tax on bituminous
coal used in Texas, of which over 99% is mined out of state. The lignite
amendment had two beneficial consequences: it lowered the revenues to
$95 million annually and it made the bill more susceptible to constitutional
arguments. The Senate submitted its own school funding/property relief
bill, which does not include a coal tax. This bill has passed the Senate
and the two versions are being debated by a Conference Committee. CEED
has worked diligently to mobilize coal stakeholders in the state to
oppose the tax. Over 40 companies, associations, and unions have joined
with CEED to work in united opposition to the tax. If your company has
at stake in this issue, we ask that you contact CEED's South Region
The Alabama legislature passed comprehensive legislation on EPA's proposed
Ozone Transport Assessment Group (OTAG) State Implementation Plan (SIP)
calls. The bill requires legislative review and oversight on any ozone
SIP response by the Alabama Department of Environmental Management. The
Senate and House Commerce, Transportation, and Utilities Committees will
make recommendations to the Joint Committee on Administrative Review regarding
the action it should take while studying the revision to the plan. Alabama
has proven through modeling that it does not cause air pollution problems
in the northeastern states. This bill, which was recently signed by Governor
James, will assure that legislative review and cost/benefit analysis is
performed before Alabama responds to EPA. We recommend the excellent work
by the United Mine Workers of America in support of this legislation.
CEED will continue efforts to pass the OTAG SIP legislation in key states.
HCR 12, a resolution based on CEED's model legislation, has cleared
both houses of the legislature, becoming law without the governor's
signature. CEED salutes the Missouri Oil Council/API and its allies
for their efforts and leadership in passing the resolution.
CEED filed comments last week on the Environmental Impact Statement (EIS)
for TVA's Bellefonte Conversion Project. CEED believes TVA should select
the resource alternative based on availability and lowest cost power over
the life of the plant. Although the project will not cause an environmental
impact under any of the resource alternatives, CEED is concerned that
the draft EIS may underestimate the environmental emissions from the 2,406
MW natural gas alternative. Compressor station emissions should be included
in evaluations of the environmental impact of this resource alternative.
CEED also contested several other provisions of the EIS including:
- implication that the aesthetics and recreational impacts of the
coal-based alternatives were rated as an important permanent negative;
- surface water quality impact of the coal was rated as a negative
environmental impact; and
- aquatic ecology impacts for the coal-based alternatives were given
a modest permanent negative rating based on the potential impact of
raw material spills and wastewater discharges.
The successor body to the Grand Canyon Visibility Transport Commission
(GCVTC) is the new Western Regional Air Partnership (WRAP). While CEED
was fully engaged in the GCVTC process, we never had an official voice
or ‘seat at the table'. Thanks in large part to a proactive new Colorado
Air Quality Director and political support from CEED member companies,
CEED has been chosen as one of four industry representatives to participate
in the two committees recently created by the WRAP.
The state Air Quality Directors believe the EPA will require states
to join multi-state organizations like OTAG to address the new PM2.5
Ozone and Regional Haze regulations expected to be issued this summer.
The western states hope WRAP will be designed better than the EPA will
mandate. CEED will continue to focus on full participation to ensure
coals perspective is accurately characterized.
Welcome New Members!
Joy Mining Board Member
Northern States Power Board Member
Electro-motive Div. of GM Contributing Member
Savage Industries Contributing Member