New Jersey's biggest utility is urging Congress to require a system for reducing greenhouse gas emissions stricter than what others in the industry favor , and more costly, at least for companies with coal-fired electricity plants.
Greenhouse gas reductions should be mandatory and should be achieved via a system of caps and pollution-credit trading that gradually raises electric utilities' cost for emitting carbon dioxide, Ralph Izzo testified Thursday at a Washington, D.C., hearing of a House Energy and Commerce subcommittee. Izzo on Sunday becomes chief executive officer of Public Service Enterprise Group, the parent of Public Service Electric and Gas Co.
He said his proposal eventually could generate billions of dollars to fund development of clean coal technology or help low-income people pay their energy bills.
"The pace of technology development and deployment will hasten dramatically when the United States establishes a market price for carbon," Izzo, now PSEG's president, told the House Subcommittee on Energy and Air Quality.
Carbon dioxide, the primary greenhouse gas linked to global warming, is released by burning any fossil fuel. But coal, with its high carbon content, produces more carbon dioxide.
Izzo advocated giving utilities allowances for the tons of carbon dioxide they emit, mostly based on their current electricity output, but with 25 percent of the allowances being auctioned off initially.
Companies that reduce emissions , through increased efficiency, use of renewable or nuclear energy and other strategies , could trade allowances to other companies needing more. Over a decade, the amount of allowances auctioned off should be increased to 100 percent, Izzo said.
PSEG estimates emissions allowances eventually would be worth more than $40 billion a year.
Last week, at a hearing before the same subcommittee, executives of some of the biggest U.S. electric utilities gave at best lukewarm support to mandatory limits on carbon dioxide emissions. They said any new law should limit the economic impact of new technology that will be needed to trap carbon dioxide.
Congress is considering various bills intended to reduce the level of greenhouse gases released into the atmosphere. Many scientists believe that unless emissions are decreased, the Earth's climate will continue to warm, with severe consequences in coming decades.
PSEG operates two coal-fired plants, in Jersey City and Hamilton Township, Mercer County, that environmentalists say are among the dirtiest in the state. It is spending $1 billion to reduce pollution from them, under a deal with state and federal regulators that included a $6 million fine for not cleaning up both plants earlier.
Meanwhile, PSEG said it has already met its own voluntary goal of reducing its carbon dioxide emissions to 1990 levels and now is working through the Environmental Protection Agency's Climate Challenge program to cut its greenhouse gas emissions by 18 percent from its 2000 level.