Air pollution effects due to deregulation of the electric industry

The Energy Policy Act of 1992 introduced the concept of open-access into the electric utility industry which allows privately-owned utilities to transmit power produced by non-utility generators and independent power producers (IPPs). In April 1996, the Federal Energy Regulatory Commission (FERC) laid down the final rules (Orders No. 888 & No. 889), which required utilities to open their transmission lines to any power producer and charge them no more than what they pay for the use of their own lines. These rules set the stage for the retail sale of electricity to industrial, commercial and residential utility customers; non-utility generators (Nugs); and power marketers. These statutory, regulatory and administrative changes create for the electric utility industry two different forces that contradict each other. The first is the concept of competition among utility companies; this places a greater emphasis on electric power generation cost control and affects generation/fuel mix selection and demand side management (DSM) activities. The second force, which is converse to the first, is that utilities are major contributors to the air pollution burden in the United States and environmental concerns are forcing them to reduce emissions of air pollutants by using more environmentally friendly fuels and implementing energy saving programs.; This study evaluates the impact of deregulation within the investor owned electric utilities and how this deregulation effects air quality by investigating the trend in demand side management programs and generation/fuel mix. A survey was conducted of investor owned utilities and independent power producers. The results of the survey were analyzed by analysis of variance and regression analysis to determine the impact to Air Pollution. An air Quality Impact model was also developed in this study. This model consists of six modules: (1) demand side management and (2) consumption of coal, (3) gas, (4) renewable, (5) oil and (6) nuclear sources until the year 2005. Each module was analyzed separately and the result from each module was transferred into the Air Quality Impact model. The model assesses the changes in electricity generation within each module due to deregulation and these changes can then be correlated to the emission of air pollutants in the United States.