Economics professors examine potential impact of Supreme Court case on electricity in rural America

Thursday, November 2, 2006

A new study conducted by two University of North Texas economists could play a key role in the argument of a Supreme Court case on electricity in rural America.

The study was co-authored by Dr. Bernard Weinstein and Dr. Terry Clower of UNT's Center for Economic Development and Research. It was produced for the Electric Reliability Coordinating Council, a coalition of power companies that works with a variety of labor unions, consumers and other manufacturing and service businesses on a range of clean air issues.

The study shows that rural America could see increases in electricity costs and a drop in reliability as it copes with a declining population and decreased economic opportunities. The projected increase in energy consumption over the next 25 years is also a major factor.

The case, "Environmental Defense et al. versus Duke Energy Corp.," is on appeal from the Fourth Circuit Court of Appeals and was scheduled to be argued before the Supreme Court Nov. 1. The case stems from the utility refurbishing more than two dozen of its coal-fired generating plants in North and South Carolina. Duke Energy did not obtain permits from the Environmental Protection Agency before beginning the modernization.

The utility says because the modifications to the generators did not increase the plants' hourly emissions rates, it did not require permits or supervision from the EPA. Environmental Defense and its co-plaintiffs say the refurbishment increases annual emissions because the plants operate longer. The Appeals Court had ruled in favor of Duke Energy.

Weinstein says that utilities "could be confronted with prohibitive costs for routine repairs needed to keep their plants safe and reliable."

"Those costs would have to be passed on to the consumer, and could be devastating to family farmers and small businesses in rural communities nationwide," he says.

A ruling is expected before the end of the Supreme Court's term in June 2007.

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