Power Crisis Prompts Relaxation of Air Quality Rules.

Regional air quality officials, responding to the state's energy crisis, have undertaken a piecemeal rollback of several environmental regulations, and that is sparking the ire of local environmentalists.

"The district has undertaken a relaxation of environmental standards that we don't think is necessary," said Tim Carmichael, executive director of the Coalition for Clean Air. "They are letting polluters off the hook from previous commitments."

Among the regulations being eased are those related to the "Reclaim" emission credit-trading program, and rules on the use of backup generators.

"We are taking a wide range of steps to provide flexibility for Southern California to meet its energy needs while at the same time ensuring protection of the environment," said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.

The AQMD decisions come amidst a turbulent political backdrop. Gov. Gray Davis and other state officials have put considerable pressure on environmental agencies to ease up on rules and procedures so new power generation can be brought on line before the expected summer power crunch.

Meanwhile, in Washington, President Bush and several members of his administration have blamed strict environmental rules for contributing to the current energy crisis and have indicated they are unwilling to impose any additional emission standards on power plants.

Environmental groups, caught off guard by the rapidly escalating power crisis, have been slow to respond to the criticism and thus far have been unable to stop local, state or federal officials from easing up on environmental rules.

That was evident at the two most recent monthly meetings of the AQMD's 12-member board at the agency's Diamond Bar headquarters, where environmentalists protested in vain against the agency's moves.

Those moves have included:

* Granting AQMD executive officer Wallerstein the power to waive rules governing the use of back-up diesel generators, allowing the devices to operate for up to 500 hours a year, instead of 200 hours.

* Exempting power plants from the AQMD's emission credit-trading program, known as Reclaim, which allows operators of industrial plants to buy credits on the open market in lieu of making certain pollution control investments.

* Expediting the permitting process for power plants, putting them ahead of other facilities seeking permits.

* Reducing the pollution mitigation fees that power plants must pay if they are unable or unwilling to install additional emission control equipment. One example: allowing AES Corp.'s Alamitos power plant in Long Beach to pay an $11 million fee to exceed its emissions cap, while getting the same relief by purchasing credits on the open market would have cost many times that amount.

* Issuing extra credits for dust, soot and other particulate matter, so that power plants can continue emitting such pollutants without being out of compliance.

* Lifting an emissions cap on a Glendale municipal power plant so that it can increase its output.

Wallerstein described these steps as temporary, designed to get the region through the next year or two until the power crisis eases.

"Contrary to what some of our critics are saying, we have existing flexibility under the federal and state clean air laws to allow us to move forward with clean power," Wallerstein said. "At the same time, we are not altering our long-term air quality goals."

Industry representatives have welcomed the AQMD moves.

"The district acted quickly and prudently to deal with this situation," said Robert Wyman, an attorney with the downtown law firm of Latham & Watkins who represents many of the major industrial and energy facilities in the Raclaim program. "By bifurcating the Reclaim market, the AQMD has allowed for power plants to increase their emissions without drying up the market for Reclaim credits for other sources in the program."

But environmentalists don't see it that way.

"The AQMD is a political entity, and right now, they are responding to panic-driven elected officials in Sacramento," said the Coalition for Clean Air's Carmichael. "Instead of clearing the way for more power plants, they should be earmarking dollars for conservation and the installation of more efficient equipment."

Carmichael said the AQMD's decision to exempt power plants from the Reclaim program was particularly ill-timed.

"Last year, prices of Reclaim credits finally rose to the point where installing pollution control equipment actually made financial sense," he said. "Then, as soon as that point was reached, the AQMD goes and pulls the plug and the prices go down so that no one else in the program has incentive to install controls."

The AQMD's Reclaim program director, Carol Coy, said prices for emission reduction credits did indeed go down after the power plants were exempted, but they have since gone back up to levels reached last summer. She said an approaching deadline for meeting Reclaim targets has left the credits in short supply, driving their prices back up.

Carmichael said that his other major concern is with the easing of operating restrictions on back-up diesel generators.

"If they stick to the 500-hours-a-year limit, that's OK. But my fear is that we're going to have businesses saying, 'This is an emergency situation,' and that the limit will be extended way beyond 500 hours. And those generators are highly polluting."

Carmichael said he would rather see the AQMD and state agencies give tax credits for installation of energy-saving equipment. "We ought to be spending $10 in conservation for every $1 we spend building new power plants or buying additional generators."