"The American electric power industry enters its second century in the grip of unprecedented competitive pressures," notes the report. "Power plants that have been shielded by regulation from many financial risks soon will have to survive on their own merits in an unforgiving market place."
It goes on to note that a growing scientific consensus that greenhouse gas emissions, such as CO2, are indeed contributing to the threat of global warming -- or global climate change -- have made regulatory intervention "increasingly certain." The report notes that organisations such as the American Petroleum Institute estimate the total exposure of electric utilities to CO2 limits or taxes is $60 billion annually. Emissions from the electricity generation sector represent 35% of the total CO2 emissions in 1994; by the year 2010, electric utilities are projected to increase their share of CO2 emissions to 37% of the total.
While the Bonneville Power Administration is ranked as having the lowest CO2 risk since all of its electricity is generated from renewable hydro-electric power plants, Pacific Gas & Electric (PG&E), which buys significant amounts of wind electricity, ranked second among the top 60 largest utilities. Southern California Edison (SCE), which actually buys greater quantities of wind, also made the top ten, ranking eighth. SCE lags behind PG&E because it also buys substantial amounts from out-of-state coal-fired power plants and still maintains an ageing fleet of oil-fired facilities in the smoggy Los Angeles basin. Other large utilities buying wind power include Northern States Power, which was ranked 20th.
The lowest ranked utility was PSI Energy Inc, a major burner of coal. Pacificorp, which is still looking at wind energy as an option, was third from the bottom. While PG&E registered less than 3lb. of CO2 per dollar of utility revenue, PSI emits more than 50lb. of CO2 per dollar of utility revenue.
The NRDC report notes that Spain, Sweden and Denmark have recently combined cuts in payroll income taxes with increases in energy taxes and a similar approach has been proposed for Minnesota and will likely be voted on next year. The report also points out that clean, renewable generation technologies other than hydropower "have established a substantial market position over the past decade, thanks to significant cost reductions in wind, geothermal, solar and biomass generation." It further notes that new investments in nuclear and large-scale hydro projects are doubtful since "too many competitors offer similar or greater environmental advantages with shorter lead times and lower costs."
NRDC says utilities such as American Electric Power, Cinenergy and Pacificorp -- all high emitters of CO2 -- are reducing their global warming risk exposure through strategies based on energy efficiency, upgrades of transmission and distribution systems, and investments in renewable technologies.