EPA releases Acid Rain Program 
2004 Progess Report

WASHINGTON (11/01/05) -- According to the newly released Acid Rain Program 2004 Progress Report, the program has significantly reduced acid deposition in the United States during the 10 years of its existence by cutting sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from power plants.

"Skeptics of innovative market-based solutions need only look at the phenomenal results achieved by the Acid Rain Program," said EPA Administrator Stephen L. Johnson. "By harnessing the power of the markets, President Bush's Clear Skies legislation will create permanent, substantial reductions in soot, smog and mercury pollution, and help ensure that energy costs remain stable and affordable."

In 2004, electric power generation sources reduced their annual SO2 emissions by about 34 percent - a decrease of over 5 million tons when compared to 1990 levels. Compared to 1980 levels, SO2 emissions from power plants have dropped by 7 million tons, or more than 40 percent. NOx emissions were down by about 3 million tons since 1990 and had decreased to nearly half the level anticipated without the Acid Rain Program. Other NOx regulations that also affect power plants, such as the NOx Budget Trading Program in the eastern United States, also contributed to this reduction.

The key environmental driver for the Acid Rain Program is a mandatory 8.95 million ton cap on SO2 emissions. The Program allows sources to buy and sell "allowances" (statutory authorizations to emit SO2). By reducing emissions early, sources can save (or bank) allowances and use them to cover excess emissions in years when the energy demand is higher. Thus, annual fluctuations in SO2 emissions are expected, but the total amount of emissions over the course of the program is fixed and will not increase. In addition, a source's emissions may not exceed National Ambient Air Quality Standards at any time. 

EPA said that overall compliance with the Acid Rain Program has been consistently high -- nearly 100 percent. In 2004, only four units out of the 3,391 electricity-generating units did not hold enough allowances to cover their emissions. These sources were assessed an automatic penalty of $2,963 per ton for each of the 465 tons of SO2 emitted in excess of allowances, totaling a fine of $1.4 million. In addition, 465 allowances were taken from sources' accounts to ensure that there would be no net increase in emissions.

The progress report details all of this information and includes emission data, SO2 allowance information for electric power plants, and monitored acid deposition levels across the United States. The report is available online.