Full Text of the Excerpt

JM: I'm wondering about your perspective on what sort of hearing you think you've gotten over time on environmental issues. Has the regulatory climate been generally reasonable and fair? Have there been times when you don't think you've gotten a hearing and, if not, why? In other words, has the business landscape unfolded in a reasonable fashion, from your perspective, on environmental issues? SS: Yes. That's a very important question. It's a question that involves some complex issues. It makes it a little bit difficult to say either “yes” or “no,” categorically. The movement has resulted in fair decisions and the movement has resulted in unfair decisions. It's been a mixture. I think in a country this big, in a democracy, that's sort of the way we learn about everything [and about] how to do things -- whether we're talking about civil rights or defense or whether we're talking about the environmental movement. There are forces there that aren't susceptible to very simple, easy answers. JM: Fair enough. SS: In the business in which an electric utility is in, we have to be pro-environment. There's no other way to be. I mentioned camping in the mountains and so forth with my family. I think the individual leaders that I've known in our industry have been people that valued and treasured a clean and healthy environment. That's sort of a given. I think the environmental movement, overall, has lead to a lot of very important changes that are valuable to our economy and our society. Whether they all began with Rachel Carlson's book on the sea around us or--. That was just one of the highlights in the '50s, I guess. That was published to other concerns. I think the utility industry, because we build plants that serve other industries, we're viewed as sort of a choke point, if you would, by people at one end of the environmental spectrum. JM: [People] who'd prefer to see growth kind of shut off? SS: Yeah. It's a different type of society. Yeah. Stop growth and we'll go back to living in a simplistic, less industrialized, less electrified way. That's a small group, but they're very vocal. They are there and they have their influence. The impact of the environmental movement in our industry has probably been the greatest on our use of fuels. There's certainly been, I’d say, a national decision that we're not going to build anymore hydroelectric plants, for example. We're not going to use water. Water's not a fuel, but we're not going to use water to turn turbines anymore. In some places where we can actually remove some of the small dams that we've built, maybe it's a good thing to restore the quality of the fish life or the community [life] to do that. I would say that the concerns about the environment have led to that as a national decision. With regard to the use of fossil fuels, those fuels emit sulfur, and they emit nitric oxide and other chemicals. If you take the total amount of sulfur and carbon dioxide that comes from power plants and compare that with automobiles, the amount produced by power plants does not seem to be nearly as large as if I just mentioned a big figure of billions of units of SO2 released. The environmental movement that resulted in the passage of the Clean Air Act has resulted in substantial limitations on the ability of electric utilities to use coal. JM: The types of coal you have to burn? SS: Yeah. The types of coal you have to burn. That’s had an impact on the price of coal. It’s also had, particularly in the '70s and '80s, significant impact on the use of oil -- low sulfur versus high sulfur. So, the decisions following from environmental concerns have lead to limitations on the use of fuel and higher prices for the fuel. Those higher prices are passed on in the form of rates to the consumers that use our electricity. The most significant issues that we’ve faced--. Let me just pick our nuclear program, because of the environmental concerns relating to the discharge of heated water from our Brunswick Plant. Now this is a plant that had two units completed in ’75, ’77. The issue as we began to build the plant was, how will the heated water be treated? It comes from the mouth of the river. Should it be returned to the river? The decision was made internally in the company. A lot of advice and a lot of suggestions from regulators concerning the best way to deal with that heated water is to build a canal and take the heated water after it comes out of the discharge facilities of the plant. You take it through a canal that’s seven or eight miles long and build an inverted siphon under the inland waterway. You could cross the barrier island -- Oak Island -- and you pipe it out into the Atlantic Ocean where it will dissipate very quickly. Until it dissipates, it will also be very good fishing grounds. Well, when we had completed that -- that canal and that pipe -- the issue was raised as to whether or not we should be required to discontinue the use of that canal and that pipe and not put any heated water in the ocean, but build a very large and expensive cooling tower. Well, the cooling tower would have been very expensive. It would’ve prevented the heated water from going into the ocean, but it would’ve resulted in a warm salt mist being deposited over a wide area of the coastline. After a lot of discussion back and forth, the Environmental Protection Agency favored the cooling tower. The Nuclear Regulatory didn’t think it was required. Ultimately, the views of the Nuclear Regulatory Commission prevailed, but not until we’d been required to spend several billion dollars building a pad for the cooling tower. In that case, I think, the ultimate decision -- although we had to spend a lot of money before we got there -- was a reasonable decision. I think anybody now, who looked at the project and the impact the heated water, would say it’s benign. In fact, it’s favorable to the fish in that area. Our Harris Plant, south of Raleigh, was located at a site where there was no water to begin with. There were a few streams that were dry in some parts of the summer. It was barren pine scrubland, not useful for even good farming. When we decided to put the plant and the lake in there, we were providing a large body of water that had many attractive features to it, that could not have been there otherwise. We built it large enough so that, as our engineering estimates showed, the heated water could have been taken from the plant and put back into the lake, and it would’ve dissipated. There, there was a controversy. The Environmental Protection Agency again took the position that a cooling tower should be built. The Nuclear Regulatory Commission said, “No. That’s unnecessary.” The matter went to the Council on Environmental Equality and it ruled. I’ve forgotten the split decision, but it ruled in favor of EPA. [It ruled] that we had to build the cooling tower. In my view, the cooling tower was terribly unnecessary. It was very costly. If we were going to spend that much money for some environmental purpose, we should’ve just written a check to some environmental agency and let them go restore wetlands or save a swamp or do something like that. That’s an illustration of when I think the result was unfavorable and unwise. There are probably many smaller issues that we would, in our opinion, say, “That was a reasonable decision.” Others, we would say, “No. It was not only a waste of money, it’s not an environmentally-wise thing to do.” I think our experience would’ve been similar to every other electric utility that was involved in the nuclear power program then. One of the concerns that the electric utilities have now, is whether or not under what’s called the Kyoto Accords -- the general agreement that was reached among the developing countries, including the United States and Kyoto, Japan several years ago [and] which would require the industrialized countries to cut back on their industrial production, but would not limit the lesser industrialized countries like China and India from continuing to increase their production -- whether that’s good national policy. Should we restrain our growth and jobs in order that similar jobs -- maybe even dirtier jobs, if you want to use that word -- in other parts of the world should be created? A part of the Kyoto Accords would require the substantial reduction of the use of coal, oil, and natural gas for the generation of electricity and for some other purposes. It’ll be a decision that Congress will have to resolve. What Congress will do is uncertain, but in Congress there have been a number of resolutions in the Senate, which would call for the government not to go forward to try to implement those, until they fully understand what the impact would be. It’s a matter of concern today, and I think it’ll be a concern of the next five to ten years, probably.