A.I.M Gravely Concerned About Power Plant Regulations.

Business Editors

BOSTON--(BUSINESS WIRE)--April 23, 2001

Richard Lord, President and CEO of Associated Industries of Massachusetts (A.I.M.), an employer association of more than 5,400 Massachusetts companies, issued the following statement in response to power plant emission regulations unveiled today by Governor Swift.

The regulations announced today by the Swift Administration set Massachusetts on an uncharted course that may place the Commonwealth's economy and environment at a great risk in the years ahead. We are deeply concerned that the regulations, the first of their type in the nation, are based on a questionable, privately produced report and essentially establish an energy tax in the hundreds of millions of dollars on individual, commercial and industrial consumers of electricity without any type of cost benefit analysis being undertaken, and threatens overall state electricity supply.

Aspects of the regulations that are troubling to A.I.M. include:

--The generating facilities affected by the regulations constitute 40% of the Commonwealth's electricity supply. The time line contained in the regulations to curb emissions for these plants will cost millions of dollars and risks power interruptions at a critical time, and could force hurried, unwise decisions on technological issues.

--The regulations will most probably limit the use of any fuel except for gas in the future. Rising gas prices have driven the recent increase in electric costs, and now shortages are in prospect. The proposed policy will increase costs and raises serious questions about being overly dependent upon one source of energy.

--The new regulations will make Massachusetts the only state in the nation to regulate carbon dioxide emissions. While some believe that carbon dioxide contributes to global warming, Massachusetts should not be placed in a position to take on a responsibility for the nation or the world with this challenge, especially since the Commonwealth is in complete attainment with current federal clean air standards.

The prospect for our economic future is good in part because Massachusetts has a reliable electric supply. However, the expansion of new industries such as the Internet and biotechnology demand a secure and reliable source of electricity. We need to ensure that we don't experience the ill effects that have struck other areas of the country in terms of cost and reliability of electricity. It is A.I.M.'s view that the Governor's power plant emissions regulations will only serve to increase the already high cost of electricity that consumers pay, make the region overly dependent on one source of fuel, and establish a precedent for regulations in the future to be based on questionable external studies without being evaluated by a cost benefit analysis.