Compliance with Upcoming EPA Clean Air Regulations Won't Threaten Electric System Reliability
BOSTON, Dec 16, 2010 (BUSINESS WIRE) -- Consulting firm Charles River Associates (NASDAQ: CRAI) announced today a new report by its Energy & Environment Practice that has found electric system reliability can be maintained as the industry undertakes coal plant retirements and pollution control retrofits to comply with upcoming clean air regulations from the Environmental Protection Agency (EPA).
The report, A Reliability Assessment of EPA's Proposed Transport Rule and Forthcoming Utility MACT, predicts the retirements and potential impact on electric reliability resulting from the Clean Air Transport Rule covering NOx and SO2, and the forthcoming hazardous air pollutants regulations known as the Utility MACT. The report considered the impact on electric reliability at the regional transmission organization (RTO), NERC Regional, and NERC Subregional levels.
Based on robust modeling after accounting both for already planned retirements plus those driven by EPA air regulations, the report predicts a total of 35 gigawatts of coal retirements in the Eastern Interconnection by 2015, less than 5 percent of the area's total electric capacity, and 39 gigawatts nationwide. The report highlights that the projected coal retirements in the aggregate are relatively small compared to past additions of new net generation capacity in the US. For example, from 1999 to 2004, US generating capacity increased by 177 gigawatts, more than four times what the report is projecting to retire in the US based on the upcoming EPA clean air regulations.
The report also found that the average age of the projected retiring units in the Eastern Interconnection is 55 years, indicating that the retirements will impact primarily older plants nearing the end of their design life expectancy.
"We have modeled an aggressive policy representation of EPA's air regulations and found that, with prompt action and industry coordination, electric system reliability can be maintained," said Dr. Ira Shavel, a vice president at CRA and co-author of the report with Barclay Gibbs, a CRA principal. "This is consistent with other industry reports that have been released in recent months."
Despite some modest capacity needs due to predicted retirements, the report concludes that adequate reserve margins can be maintained by better utilizing existing supply capacity, installing new generation, and increasing load management. The report also discusses existing federal statutory, state regulatory, and RTO market safeguards that can help maintain a reliable electric system.
The full report is available at www.crai.com/Publications/listingdetails.aspx?id=13473&pubtype=
About Charles River Associates (CRA)
Charles River Associates® is a global consulting firm specializing in litigation, regulatory, and financial consulting, and management consulting. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Since 1965, clients have engaged CRA for its unique combination of functional expertise and industry knowledge, and for its objective solutions to complex problems. Headquartered in Boston, CRA has offices throughout North America, Europe, the Middle East, and Asia. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at http://www.crai.com.
Statements in this press release concerning the report, A Reliability Assessment of EPA's Proposed Transport Rule and Forthcoming Utility MACT, future business, operating results, estimated cost savings, and financial condition of the Company and statements using the terms "anticipates," "believes," "expects," "should," or similar expressions, are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995.These statements are based upon management's current expectations and are subject to a number of factors and uncertainties.Information contained in these forward-looking statements is inherently uncertain and actual performance and results may differ materially due to many important factors.Such factors that could cause actual results to differ materially from any forward-looking statements made by the Company include, among others, the Company's restructuring costs and attributable annual cost savings, changes in the Company's effective tax rate, share dilution from the Company's convertible debt offering and stock-based compensation, dependence on key personnel, attracting and retaining qualified consultants, dependence on outside experts, utilization rates, factors related to its acquisitions, including integration of personnel, clients, offices, and unanticipated expenses and liabilities, the risk of impairment write downs to the Company's intangible assets, including goodwill, if the Company's enterprise value declines below certain levels, risks associated with acquisitions it may make in the future, risks inherent in international operations, the performance of NeuCo, changes in accounting standards, rules and regulations, changes in the law that affect its practice areas, management of new offices, the potential loss of clients, the ability of customers to terminate the Company's engagements on short notice, dependence on the growth of the Company's business consulting practice, the unpredictable nature of litigation-related projects, the ability of the Company to integrate successfully new consultants into its practice, general economic conditions, intense competition, risks inherent in litigation, and professional liability.Further information on these and other potential factors that could affect the Company's financial results is included in the Company's periodic filings with the Securities and Exchange Commission.The Company cannot guarantee any future results, levels of activity, performance or achievement.The Company undertakes no obligation to update any of its forward-looking statements after the date of this press release.
SOURCE: Charles River Associates
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