Estimated increases in the cost of electricity under three acid-rain control bills

Several bills were introduced in the past two Congresses to reduce emissions of sulfur dioxide and nitrogen oxides from electric power plants. The effects of these bills on electricity costs depend on features of the bills, on the mix of generating capacity owned by different electric utilities, on the technologies available for complying with the legislation, and on the time horizon used to calculate the costs. A system of computer software has been developed to make utility-specific estimates of the effects of different legislation on electricity costs. This paper presents sample results from a larger analysis of six pieces of legislation. These results suggest that the emissions trading systems proposed in some legislation, and adopted in the Clean Air Act Amendments of 1991, may have less effect than expected on the cost of complying with the legislation. 5 refs., 2 figs., 2 tabs.