Air Quality - Effect Of Utility Deregulation On Air Pollution

Regulated for decades as "natural monopolies," by the year 2000 electric utilities faced a radical shift toward increased competition. As in the airline, trucking, natural gas, and telecommunications industries, more efficient technology and increasing demand for lower rates led regulators to consider some form of utility company deregulation. Thus, the Federal Energy Policy Act of 1992 (PL 102-486) gave other electricity generators access to the market.

Industrial customers eager to buy cheaper electricity from new sources or to build their own sources of power no longer viewed electricity as a nonnegotiable cost of doing business but saw it as a commodity they could either provide for themselves or for which they could shop. Under deregulation plans, utilities would be free to market electricity anywhere, and by the beginning of the twenty-first century more than half the state legislatures considered allowing utilities to compete for customers.

Environmental groups and some utilities have warned that by prompting increased competition deregulation may cause coal-fired plants to use more coal in order to produce more electricity, which would send more pollutants into the air. The Natural Resources Defense Council cautioned that deregulation could lead to as many as 500,000 tons of increased emissions of NO₅ per year. Responding to those concerns, former EPA administrator Carol Browner agreed that the open access rule could lead to future increases in CO₂ emissions and said that the EPA has to work closely with the DOE and the states to monitor the results of open access.