CITY OF DOVER, OHIO
TESTIMONY BEFORE SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
SUBCOMMITTEE, ON CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY
REGARDING PROPOSED USEPA REGULATIONS ON OZONE & PM-2.5 AIR STANDARDS
APRIL 29, 1997
TESTIMONY GIVEN BY: MAYOR RICHARD P. HOMRIGHAUSEN

I. INTRODUCTION

Chairman Inhofe, Senator Graham, members of the Subcommittee, honored guests. I want to thank the Subcommittee for inviting me to testify regarding the United States Environmental Protection Agency's proposed new regulations on Ozone and PM 2.5 . As you are well aware, EPA's proposal to increase the stringency of the ambient air quality standards for these pollutants under the Clean Air Act will have far reaching effects on each and every inhabitant of these United States of America. It is imperative that all voices be heard in the debate over these new regulations, the need for them, the science used to determine the proposed levels and the economic impact these proposed levels will have on every aspect of American life.

In particular, as a mayor of a vibrant community that operates a municipally-owned electric utility system, I want to emphasize the drastically disproportionate impact EPA's proposed standards could have on local governments and the small business entities operated by these communities. EPA has proposed drastic new standards that the Agency admits are not achievable for many communities, yet has failed to assess the costs and impacts that will be borne disproportionately by our communities and small businesses. These impacts will ultimately be placed on the citizens and consumers represented by cities like Dover, and served by public utilities like the City of Dover Electric System. In fact, EPA has admitted in its proposed rules that available control strategies may not be sufficient to allow counties to achieve attainment of the two proposed standards.\1\

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\1\See Regulatory Impact Analysis for Proposed Ozone National Ambient Air Quality Standard, U.S. EPA Office of Air Quality Planning Standards, Innovative Strategies and Economics Group, December 1996 at p. E-12 Regulatory Impact Analysis for Proposed Particulate Matter National Ambient Air Quality Standard, U.S. EPA Office of Air Quality Planning Standards, Innovative Strategies and Economics Group, December 1996 at p. ES-12, ES-13.

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Therefore, the City of Dover, along with Ohio Municipal Electric Association ("OMEA"), which represents Dover and 78 other municipal utilities in the state of Ohio, calls upon the Congress to ensure that EPA's proposed standards for ozone and particulate matter are both justified by sound science and health data, and take into account the particular impacts on local governments and small business entities. Specifically, Congress should ensure that:

1. The Environmental Protection Agency performs a full assessment of the potential costs and impacts of its proposed ozone and PM rules on small business entities and local governments, including public power entities, prior to the finalization of its standards and their implementation. EPA should be required under the Small Business Regulatory Enforcement Fairness Act to perform a SBREFA Regulatory Flexibility Analysis for both the standard- setting and implementation phases of its proposed ozone and PM revisions.

2. EPA devises a plan to ensure no disproportionate impact from its ozone and PM rules on small communities and public power entities. This plan should be developed with the substantial input of the affected local government and small business sectors.

3. EPA devises an implementation plan to provide the technical assistance and regulatory flexibility to small public power plants that will be necessary for these systems and units to comply with burdensome new regulations without being driven out of the competitive business. 4. Congress should statutorily exempt small utility units -- that is, units with under 25 megawatts of capacity - from additional control requirements for these pollutants, just as the Congress exempted small utility units from the Title IV control requirements for the acid rain program under the Clean Air Act Amendments of 1990.

Once again, I thank you for the opportunity to come before you and give you the perspective of one small "Middle America" community.

II. BACKGROUND ON THE CITY OF DOVER

The City of Dover, Ohio is located in Tuscarawas County.

Tuscarawas County with a population 84,400 and an area of 555 square miles, is situated in the northeastern portion of Ohio. Nearly 36 percent of the total population of the county, or approximately 30,000 inhabitants, is centered in the twin cities of Dover and New Philadelphia. Geographically, these two cities are located in the center of the county, where the majority of the commercial and industrial activity is also centered.

The City of Dover has a total land area of 5.75 square miles. It is located 80 miles south of Cleveland, 26 miles south of Canton, 90 miles west of Pittsburg, and 105 miles northeast of Columbus. The city is bounded to the south by the twin city of New Philadelphia, on the east by the Tuscarawas River, on the west by Interstate 77 and State Route 39, and on the north by the villages of Parral and Columbia.

Local employment is sustained by county wide industry. Dover and New Philadelphia have over 55 diversified industries which has eliminated the concern over the economic growth dependent upon one larger employer, thus allowing for a more secure job forecast for employees.

The local government of the City of Dover is of the Strong Mayor/ Council Statutory form. Elections are held on a partisan basis for the Mayor, Auditor, Treasurer, Law Director, President of Council, four Ward Councilmen, and three Councilmen-at-Large. A Director of Public Service, and a Director of Public Safety are appointed positions. This form of government is supplemented by the City Planning Commission and the Zoning Board of Appeals. The Mayor is the Chief Executive Officer of the city and is in charge of the operation of the city and the eleven city departments.

In 1992 my administration, with the help of a Citizens Advisory Committee, presented a plan which outlined a systematic approach to the renovation, repair, and expansion of our electric plant. This plan, called "Power-up 2000", responsibly provides for the growth of our electric utility in a way that does not place an unfair burden upon our residents. By setting aside 10% of the income generated by the light plant each year, we can plan for our future needs before they become problems. This plan is already proving its worth by the City's ability to bond $10.1 million for the installation of gas fired burners in boiler #4, at the local electric generation facility, the installation of a new Northern Innertie with the American Electric Power Company, and the renovation and expansion of our electric distribution system. Power-up 2000" enabled the city to make a down payment of $1.5 million on these projects which will save the city in excess of $5 million in debt service over the 25 year term of the notes.

*** FOR ADDITIONAL INFORMATION REGARDING THE CITY OF DOVER, SEE APPENDIX "A"

III. CITY BUDGET - SPECIFICALLY LIGHT PLANT AND ELECTRIC DISTRIBUTION BUDGET

Dover's annual budget has steadily increased over the last five years. This is due in part to a strong economy and stable labor and employment market. The Light Plant and the Electric Distribution System accounted for $22,711,515.00 of the City's $45,047,297.00 annual budget for 1995, or 50.4%. Simple math tells the observer that the implementation of these new regulations will have a drastic effect on Dover's annual operating budget.

*** FOR A DETAILED LOOK AT THE ANNUAL BUDGET OF THE CITY OF DOVER, SEE APPENDIX "B".

IV. OPERATION OF THE DOVER ELECTRIC SYSTEM

The City of Dover owns and operates its own electric system, including a generation plant, transmission interconnections and and electric distribution system. The Dover system purchases wholesale electric energy and power from other (typically investor- owned) utilities, through our membership in American Municipal Power-Ohio, Inc, which acts as our negotiating agent in power purchases. "AMP-Ohio" is a non-profit wholesale power supplier and service provider for 77 Ohio and one West Virginia public power systems. The Dover electric power plant has instituted substantial environmental control measures in recent years, including an electrostatic precipitator and natural gas co-firing burners to reduce particulate emissions. We also shut down two coal fired boilers and installed a gas fired combustion turbine as replacement capacity. The Dover Electric System serves 6,185 customers, including residents, commercial and industrial operations, schools and the City's hospital. The City's Electric System plays a vital role in the competitive sale of power to Ohio consumers, supplying relatively low-cost energy to our customers.

Public power systems like Dover's play a vitally important role in our nation's communities and the competitive electric industry. U.S. public power utilities, which are community- owned, locally-controlled and not-for-profit, serve 1 in 7 Americans (35 million people) and collectively possess a $77 billion investment in all types of generation capacity, representing 8.7 percent of coal-fired, 15.5 percent of gas-fired and 9.7 percent of oil-fired generation capacity. Public power is inherently accountable to communities and their citizens, because they are owned and governed by these communities. Public power stands for the development of a viable and sustainable competitive wholesale market, improved environmental quality, and protection of the public interest against market power.

Indeed, public power systems are a relatively insignificant source of pollutant emissions and should not bear the brunt of stringent control requirements. A recent report by the Natural Resources Defense Council finds that 80% of electric utility Nox emissions in the 37 eastern states is produced by the top 50 generating companies. NRDC, Benchmarking Air Emissions of Electric Utility Generators In The Eastern United States P.11, (April, 97).

At the same time, public power is subject to anti-competitive threats from private, investor-owned electric utilities, and is disproportionately burdened by regulatory requirements. Public power systems and utility units, like Dover's, tend to be smaller and older than investor-owned systems and units.

These smaller public utilities often suffer from diseconomies of scale and bear particular burdens from technology-forcing requirements. These constraints on public power have been recognized by Congress both in energy legislation and environmental law, such as through the exemption of small utility units from Clean Air Act Title IV acid rain requirements. That is, Congress exempted small utility units -- those under 25 megawatts of capacity -- from the Title IV control requirements of the Clean Air Act Amendments of 1990, recognizing the relatively insignificant emissions and competitive importance of small utility units, which often cannot bear the same burdens as larger utilities. The Dover Generation plant is an example of a small utility unit that Congress recognized in the 1990 Amendments.

The City of Dover owns and operates its own electric generation plant. The City's main source of generation is through the burning of local coal mined in the Tuscarawas Valley. In 1995 the City installed two gas burners in the City's boiler #4. These burners enable the Light Plant to start up with gas and to co-fire gas with coal during normal operations. With the gas burners' installation, the Light Plant has experienced a two to three percent increase in efficiency at low gas firing rates and are able to start up the plant without the normal four to six hours of excess capacity.

At the same time the gas burners were installed, the controls for boiler #4 were upgraded. With the new controls and the gas burners the Light Plant has increased the load of boiler # 4 by 5%. The combination of these two improvements not only increases the efficiency of boiler #4 but it creates a much cleaner burn, which in turn aids in the protection of the environment.

Approximately 15.5 megawatts of Dover's load is generated by the power plant and another 18 magawatts is obtained through purchased power. The plant has an annual generating peaking capacity of 32.5 megawatts, using the coal fired boiler, a combustion turbine, and an internal combustion diesel generator. The average summer time peak of 39 plus megawatts is met through generation and long term purchase of power contracts. Our various resources are scheduled by economic dispatch to provide our rate payers low cost, reliable electric service. This is done through our membership in OMEA, who acts as our negotiating agent in power purchases.

The City of Dover also operates a distribution system within the city, known as the Electric Field Distribution Division. This division is responsible for maintaining the distribution system in a secure and reliable condition while meeting the City's growing electrical needs. This system includes 85 miles of distribution lines and 5 pole miles of transmission lines, along with two substations, numerous transformers and over 7,400 meters.

The Division has always been a progressive and innovative part of the utility, from installing submarine cables under the Tuscarawas River in 1935, to being the first Ohio municipal electric system to install fiber-optic cables as a communication link between the plant and a substation.

The Division has completed many major projects, including the construction of 2.5 miles of 69KV lines to the North Substation in 1987. In 1995, the Division completed a program converting street lighting to high-pressure sodium lighting.

Since 1989, the Electric Filed Division has operated the City's south substation as a temporary installation. After an electrical trans- mission and distribution system study, it was recommended the City construct an interconnection substation north of the City. This north substation will improve the capacity and reliability of the transmission system, the distribution system, and the interconnection with American Electric Power. This northern interconnection will be completed in the latter part of 1997.

V. DISCUSSION OF PERTINENT QUESTIONS REGARDING USEPA PROPOSED REGULATIONS AND THEIR IMPACT ON DOVER

1.) WHAT ARE THE CURRENT LEVELS OF EMISSIONS FROM THE DOVER LIGHT PLANT FOR SO2, NOX, AND CO, IN RELATIONSHIP TO OUR PERMITTED LEVELS UNDER THE 1990 CAA?

[TABLE OMITTED]

At the present time we only have permitted levels on SO2 and Total Particulate Matter, because that is all that is required by the (SIP) State Implementation Plan. As can be seen, our average tested emission levels, for total Particulate Matter, are only 28.9%, and for SO2 are only 36% of our permit levels. SO2 emissions are based upon the sulfur content of the coal burned. Even though our SO2 emissions are well below our permitted levels, the City of Dover, in a conscious effort to improve the air we breath, installed natural gas co-firing burners in 1995. These burners not only further reduce our SO2 emissions, but they also reduce Particulate Matter emmissions by improving efficiency through increased carbon burnout.

The above calculations for NOX and CO2 levels were calculated using the EPA's AP-42 method. However, if monitoring of modeling data suggest that an ambient air quality standard is being violated, then limits for other pollutants may be imposed.

2.) WILL EPA's PROPOSED NEW STANDARDS PUT THE CITY OF DOVER AND TUSCARAWAS COUNTY IN NONATTAINMENT?

EPA's proposed ozone standard would likely throw Dover and Tuscarawas County into ozone nonattainment. The proposed PM-2.5

standard may also put the City and County in nonattainment, although it is difficult to determine because Dover, like most other cities, does not currently monitor for PM-fine. The Ohio EPA has monitored tropospheric ozone for a long time. At the proposed standard, past monitoring shows the Tuscarawas County would qualify as a non-attainment area. This conclusion is verified by USEPA's press release that lists Tuscarawas County as a non- attainment area under the new standard. Ozone concentrations are falling and will continue to fall in the near future as existing regulations continue to maximize their effect. However, the rate of decrease will not be enough to compensate for the radical decrease in the standard being proposed.

Because PM-2.5 has not been extensively monitored in Ohio, no one knows for sure how it will impact attainment status. USEPA has projected that the most urban counties will be unable to comply with this standard. These are the areas that are currently monitored. I suspect that many more areas, especially those with significant coal combustion facilities, will be considered non-attainment areas as more monitoring and modeling data becomes available.

3.) WHAT EFFECT COULD EPA's PROPOSED STANDARDS HAVE ON THE CITY OF DOVER, THE DOVER ELECTRIC SYSTEM AND THE CITY'S RESIDENTS AND CONSUMERS?

EPA's PROPOSED STANDARDS COULD REQUIRE BURDENSOME TECHNOLOGY-FORCING COMPLIANCE REQUIREMENTS THAT WILL DISPROPORTIONATELY BURDEN SMALL UTILITIES LIKE THE DOVER POWER PLANT. The EPA's proposed stringent new ozone and PM standards could have a drastic and disproportionate impact on small, publicly-owned utility systems like the Dover Electric System. Although the exact compliance requirements that might be imposed on Dover cannot be determined until the EPA implementation process is completed, Ohio's "State Implementation Plan" is developed and detailed economic analyses are performed by Dover to determine the impact of these rules on the City, certain results are likely.

First, the EPA ozone and PM rules would likely require significant reductions in emissions of oxides of nitrogen ("NOx") by utilities. EPA efforts related to the Ozone Transport Commission and the Clean Air Power Initiative suggest that utilities may be forced to reduce NOX emissions by as much as 60-75 percent. Such NOX reductions may force the City of Dover Municipal Power Plant to install control technology including "low-NOX burners," "Selective Catalytic Reduction technology," or "Selective Non-Catalytic Reduction technology."

Second, the EPA PM-fine rule, which could require utilities to reduce gaseous nitrogen and sulfur precursors of particulate matter, could require further imposition of expensive control technology on the Dover Municipal Power Plant, including the upgrade of its existing electrostatic precipitator, or the installation of new baghouse equipment.

In addition, the need to control gaseous sulfurs under the proposed PM standard could require further reductions in SO2 emissions by utilities, which could require utility units like Dover's to switch to lower sulfur coal or even install SO2 scrubbers at considerable cost.

As explained earlier, these technology-forcing requirements that would likely result from EPA's new rules will be difficult, if not impossible, for small utility units like Dover to bear. For example, economic studies by other municipal utilities have estimated that the cost of SCR technology on a utility unit of 25 megawatts or less could cost up to $400 per kilowatt - a level that cannot be sustained in a competitive electric industry.

The modification of the ozone and PM NAAQS cannot be divorced from the impacts and costs that will be associated with the required implementation of revised standards. Such impacts will be borne disproportionately by small public power systems and units like those owned by the City of Dover. Indeed, the adverse impacts on Dover's electric system from an increase in the stringency of the PM and ozone standards could pose an almost insurmountable competitive disadvantage to small utility systems as the electric utility industry prepares to enter a new, competitive era. These disproportionate impacts from the implementation of the ozone and PM NAAQS are recognized by the EPA itself in its Regulatory Impact Analyses for the two proposed rules.

EPA itself recognizes the drastically disproportionate burden that would be placed upon small utility systems by the proposed revisions to the ozone and PM NAAQS. For example, the Economic Assessment of the Regulatory Impact Analysis for the proposed ozone standard indicates that the economic impact of the proposed ozone rule would be THREE TIMES greater on "SMALL utility entities" as compared to all utility entities. In the Ozone RIA, EPA measures the "cost-to-sales" ratios on a wide range of industrial categories associated with various control measures that would be necessary to meet the proposed ozone standard. The EPA analysis adopts a "standard rule of thumb" that recognizes an impact of a regulation to be a "significant impact on small entities" when 20% or more of the affected small entities\2\ have an expected cost of regulation to sales ratio of equal to or greater than 3%. See Ozone Regulatory Impact Analysis at pp. VIII-1 and VIII-2. The Ozone RIA estimates that utility boilers overall will have a cost-to-sales ratio of 7.3% - which is over twice the level determined "significant" by EPA's impact standard. More importantly, the cost-to-sales ratio estimated for small utility boilers is over three times that level for utilities in general, at a 22.6% ratio.\3\ Moreover, the EPA economic impact estimates recognize that "average cost per establishment does not always account for plant size (and)...any economies and diseconomies of scale associated with controlling large plants compared to controlling smaller plants." Ozone RIA at VIII-23. Particularly when emissions compliance requirements force the application of a particular technology (such as selective catalytic reduction or "SCR" as may be necessary for the control of utility ozone precursors and particulate matter), the diseconomies of scale for pollution control at small utility units can be substantial.

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\2\The ozone and PM RIAs adopt a generic definition of "small entities" to include entities with 100 employees or less. The City of Dover Municipal Electric Plant falls within this definition, as well as the "small entity definition" that applies to electric utilities under the Small Business Regulatory Enforcement Fairness Act.

\3\Ozone RIA at Table D-4, p. D-8, D-9

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The disproportionate impact on small utility units from the control requirements associated with the proposed ozone standard cannot be doubted.

The same disproportionate burden on small utility systems occurs under the proposed PM standard. In the PM RIA, EPA performs a cost-to-sales ratio screening analysis to identify those industries or source categories potentially experiencing impacts from the proposed regulations. The EPA analysis shows that the proposed PM standard impact on "small" (i.e. 100 employees or less) establishments would result in 53 industrial categories experiencing a substantial cost-to-sales ratio of 10% and above, as opposed to an impact on all establishments (i.e., both small and non-small) resulting in only 27 industrial categories experiencing the high, 10% or above cost-to-sales ratio. PM RIA at p. 8-15, 8-16. In other words, more than twice as many industrial categories will experience this substantial economic impact when the impact is measured on small business entities only, as opposed to all business entities. Or, as recognized by EPA, (t)here is some evidence...that there may be potentially significant impacts on 10 to 20 percent of all U.S. industries (represented by SIC codes), and potentially significant impacts on small establishments only in 15 to 25 percent of all U.S. industries." PM RIA at 8-17. These drastically disproportionate impacts from EPA's proposed new rules are not abstract to communities like Dover. To comply with these rules would force existing sources to spend considerable sums of money in an effort to reach attainment status. This expense has not been planned for and would need to be recovered. If the increased cost cannot be recovered through rates, then either tax revenues will need to be increased or the city budget will need to be cut in other areas.

Implementation of these strategies will require the expenditure of capital funds and will increase the cost of operations. The strategy of switching to a low sulfur, higher cost coal will result in the City of Dover purchasing coal from outside the state of Ohio. Therefore, the City of Dover would no longer be purchasing $1,040,000.00 worth of coal from local suppliers, but rather would be purchasing between $1,240,000.00 and $1,440,000.00 worth of coal from out of state suppliers, thereby having a detrimental impact on the state's coal mining industry. Depending on the control strategies implemented, the capital costs could easily be in the millions of dollars. All of these costs will be passed on to our citizens in the form of increased rates.

If these costs become too large, the City of Dover may be forced to close the Municipal Power Plant, thereby eliminating employment for 20 people at the plant. The plant has proven to be a valuable asset for the city for the past 87 years, and is a main reason why the city has been able to provide its citizens with low cost electricity. Closing down the power plant will make the City of Dover less competitive in the electric industry and may lead to the evidential elimination of the City's Municipal Electric System. Although the electric utility industry is entering a competitive new era, neither wholesale or retail electric competition is in place yet, and anti-competitive threats and market power abuses may exist, or even increase, as de-regulation is implemented. If municipal power systems like Dover's are disproportionately impacted and hobbled by regulatory requirements, these public power entities will be less able to respond flexibly to customer needs at a time when the risks are greater.

These significant, disproportionate costs on small utility systems like Dover's could potentially force many small municipal systems out of business. Without the benefit of detailed economic studies, it is difficult to say for sure. However each additional regulation places additional burdens on the city generating plant. It must be pointed out that the Dover Light Plant is small, generating 15 megawatts on an average basis, in comparison to most investor- owned utilities. There is a natural tendency for expensive solutions to be easier to make for large plants, because the cost can be spread over a much larger customer base. Over the years, the City of Dover has reduced emissions from its generating plant while being able to provide competitively priced electricity to its citizens. The proposed NAAQS would raise the cost of power to our citizens and jeopardize the city's capability to provide competitive services in the electric industry even though the benefits to the public health from the new rules and regulations are still uncertain.

THE BURDEN OF EPA's RULES ON THE CITY OF DOVER'S ELECTRIC SYSTEM WILL ADVERSELY IMPACT DOVER'S CITIZENS AND CONSUMERS.

If EPA's proposed rules and their likely technology-forcing effect do not put the Dover Electric System out of business, they will certainly have a direct negative impact on the community's citizens and consumers. If we were to assume that we could still purchase electricity at the same rate of our current purchased power contracts that the city had to generate electricity via the burning of natural gas (because burning Ohio coal would be prohibited), and were maintaining our basic electric rates at current levels, a typical Dover electric bill each month would increase as follows due to the fuel switching required by the EPA rules.

CURRENT PROJECTED

Residential (2,000 Kwh)

$120.00 $ 150.00
Industrial (300,000 Kwh)
$13,153.00 $16,907.00
Union Hospital (455,000 Kwh)
$19,376.00 $25,965.00
Commercial (4,000 Kwh)
$ 314.00 $ 400.00

As can be seen in the above projection electric rates for customers of Dover Power would dramatically increase in the attempt to bring the city's electric plant into compliance with these new regulations. In addition to the rate increase caused by compliance, the city has built in subsequent rate increases to pay for the Municipal Electrical System Revenue Bond issue of $10,075,000.00 dated 1995 to 2020 with increasing principle and interest rates over the 25 year period. The purpose of this issue is to improve the city's municipal electrical system both in reliability and environmental aspects. Increasing the electric rates for both of these issues would virtually eliminate the city's ability to generate electricity competitively as it has for the past 87 years. An additional impact on the city budget would be disproportionate wage increases for all city employees to keep in step with the increased cost of living caused by the artificial inflationary effect of complying with these new rules and regulations.

Additional impacts specific to the City of Dover Municipal Electric Generating System could result from EPA's proposed rules. The Power Plant and the Field Division employ a total of 33 people, 20 of which are employed at the Power Plant. The Power Plant annually burns 40,000 tons of locally mined Ohio coal at an annual cost of $1,040,000.00. The shut-down of the plant due to disproportionate regulatory burdens could thus result in a substantial loss of jobs or decrease in the use of locally mined coal.

EPA's PROPOSED RULES COULD ALSO HARM COMMUNITIES BY THWARTING ECONOMIC DEVELOPMENT AND PUSHING NEW DEVELOPMENT INTO THE NATION'S GREENFIELDS AND PRIME AGRICULTURAL AREAS

Stifled economic development for attracting new business, business expansion, and retaining existing businesses will be the primary product of these new regulations. Any new or expanding business contemplating the construction of facilities in the area will not only spend additional money on air pollution control equipment but will spend additional time procuring environmental permits. With a limited number of offsets available in Tuscarawas County (due to non-attainment status), it may be impossible to obtain the offsets needed to permit any new development. The end result will be a negative impact on the Dover and Tuscarawas County economy. Rural, greenfield attainment areas will be more attractive because the regulations are not as stringent and the threat of additional reductions in the future is not as strong. Encouraging business development in the nation's greenfields while viable urban areas decay seems counterproductive to improving the environment.

WHAT ROLE DID/DOES THE EPA'S "CLEAN AIR SCIENTIFIC ADVISORY COMMITTEE (CASAC) PLAY IN THESE PROPOSALS?

As you know the CASAC is a committee primarily made up of scientific individuals that review the criteria documents and staff papers submitted to them by the USEPA on their proposed regulations. CASAC'S duty is to review these documents and advise the USEPA Director whether or not to implement said proposed regulations.

George T. Wolff, Chairman of the EPA's Clean Air Scientific Advisory Committee, and Principal Scientist for General Motors Corporation, in a report printed in EM, (September,1996) a publication of the Air & Waste Management Association, cited CASAC'S interpretations and recommendations as follows:

"The Panel felt that the weight of the health effects evidence indicates that there is no threshold concentration for the onset of biological responses due to exposure to ozone above background concentrations. Based on information now available, it appears that ozone may elicit a continuum of biological responses down to background concentrations. It should be noted that a biological response does not necessarily imply an adverse health effect. Nevertheless, this means that the paradigm of selecting a standard at the lowest-observable-effects-level and then providing an "adequate margin of safety" is not possible. It further means that risk assessments must play a central role in identifying an appropriate level.

To conduct the risk assessment, EPA had to identify populations at risk and the physiological responses of concern, develop a model to estimate the exposure of this population to ozone, and develop a model to estimate the probability of an adverse physiological response to the exposure. EPA selected a small segment of the population, 'outdoor children' and 'outdoor workers', particularly those with preexisting respiratory disease as the appropriate populations with the highest risks. The Panel concurred with the Agency that the models selected to estimate exposure and risk were appropriate models. However, because of the myriad of assumptions that are made to estimate population exposure and risk, large uncertainties exist in the model estimates."(emphasis added)

"Of the 10 members who voiced an opinion, all endorsed an 8-hour standard and all endorsed multiple exceedances. Three members recommended 0.08 ppm which is clearly more stringent than the present NAAQS. Three other members recommended 0.09 ppm and one member recommended a range of 0.09 to 0.10 ppm which, with multiple allowable exceedances, ranges from NAAQS equal in stringency to the current NAAQS to a NAAQS less stringent to the current NAAQS. Two other members (including the author) said it is a policy decision because the science has not shown any of the alternatives that are being considered as being more protective of public health than any other. This can be interpreted as a vote of support for an 8-hour NAAQS equivalent in stringency to the current NAAQS." ..."In summary, although the panel members' opinions differed, none supported the lower end of EPA staff's recommendations, and the majority of the members stated a position which included an 8-hour NAAQS of equivalent stringency to the present 1-hour NAAQS of 0.12 ppm." (emphasis added)

Why then does the USEPA continue to press forward with their proposed 0.08 ppm in direct conflict with the recommendations of its own Clean Air Scientific Advisory Committee?

In the October, 1996 Issue, of the same publication, discussing USEPA's proposed regulations on PM 2.5 Mr. Wolff reported the following: "Estimated PM 2.5 concentrations were calculated for all counties with PM 10 samplers by multiplying the relatively abundant PM 10 data by ratios derived from a much more limited PM 2.5/PM 10 database. At present, 12% of the counties with monitors exceed the PM 10 standard, mostly due to exceedances of the 24-hour NAAQS. A combined annual 24-hour PM 2.5 NAAQS of 25-75 ug/m 3 results in approximately the same number of counties not in attainment (15% versus 12%) but these combined levels are above the range recommended in the SP (staff paper). The least stringent combined NAAQS within the Agency's recommended range is 20/65 ug/m 3 which results in 24% of the counties not in attainment. At 15/50 ug/m3 the percentage soars to 56%, and as the lower end of EPA's range is approached, virtually the entire country is out of compliance." (emphasis added)

Once again the various Panel members had a diversity of opinion regarding allowable levels of PM 10/PM 2.5 . "The diversity of opinion expressed by the Panel members reflected the many unanswered questions and large uncertainties associated with establishing causity of the association between PM 2.5 and mortality." ... "Because of measurement errors, the present statistical methodologies are incapable of detecting the existence of a possible threshold concentration below which acute mortality would not occur. Finally, there is some concern because the statistical models used in the various geographical areas are different. At different sites, different combinations of variables, averaging times, methods for accounting for seasonality and meteorology, and lag times have been used to produce the reported PM-mortality relationships." The bottom line is: CASAC stated: "...there does not appear to be any compelling reason to set a restrictive PM 2.5 NAAQS at this time." (emphasis added)

Why then does the USEPA continue to press forward with their proposed PM 2.5 in direct conflict with the recommendations of its own Clean Air Scientific Advisory Committee?

From Policy Study Number 136, Has the Battle Against Urban Smog Become "Mission Impossible?" by Kenneth W. Chilton and Stephen Huebner, regarding the reduction of ozone: "Another important consideration is the attainability of any air quality standard for ozone. Natural emissions from trees and other vegetation can release enough chemicals (volatile organic compounds) to lead to ozone levels that are very close to the level being advocated by the American Lung Association - 0.07 ppm. Indeed eight-hour daily average levels as high as 0.072 ppm have been recorded in Theodore Roosevelt National Park in North Dakota. Thus, too tight a standard could literally be "mission impossible."

How does the USEPA propose to regulate a naturally occurring phenomenon?

ARE UTILITIES REALLY TO BLAME FOR AN OZONE PROBLEM?

The Midwest Ozone Group produced a study in December, 1996 which challenged EPA's assumption pollution from utilities represents a large piece of 'unfinished business' for the nation.

The MOG study entitled: "From Ozone Attainment, Proceeding in the Right Direction, Will sound science and objectivity prevail?" states as follows:

"Overall, electric utilities contribute less than 17 percent of all ozone precursor emissions while the transportation (vehicular) sector contribute 41 percent and the industrial sector about 37 percent. Utilities contribute approximately 33 percent of NOx and less than 0.2 percent of VOCs."

EMISSION INVENTORY ISSUES

"An emission inventory is the identification of emission sources and the rate of their emissions which provides essential data (inputs) for the model. Unfortunately, there is no way of generating an ozone modeling emission inventory at this time that accurately describes an ozone episode....While the use of profiles in the absence of actual operating and/or emissions data is accepted modeling technique, the use of default profiles almost always generates an inventory larger than actually occurred during the episode being modeled. In a review of the modeling inventory for the 1995 OTAG episode conducted by Enviroplan which looked at only utility sources, it was determined that emissions from the identifiable portion of the utility sources in the modeling inventory were overstated by roughly 34% when the inventory was compared to Continuous Emission Monitoring System (CEMS) data collected and reported by utilities under the Acid Rain program."

CONCLUSIONS AND RECOMMENDATIONS OF THE STUDY

"OTAG, under great pressure from USEPA, has not reached the conclusions on long range transport expected by USEPA and has been forced to proceed on such a tight schedule that sound science and objectivity are compromised. With USEPA's November 8, 1996 announcement of its intention to make Advance Notice of Proposed Rulemaking in December, 1996 on regional NO x reductions to reduce ozone transport, it is obvious that OTAG and other scientific studies are now being preempted by USEPA. The ozone nonattainment issue has been transformed into an ozone transport issue that is being driven by politics and not science and objectivity."

"The ozone nonattainment issue is one that challenges some of the fundamental public policy decisions of the nation and threatens to impose significant new costs on numerous entities. As such, it is imperative that OTAG and USEPA look at this problem from an objective point of view. Significant No x reductions are or will be achieved through Title IV of the CAA Amendments of 1990 by the year 2000. It is premature for USEPA to reach a conclusion on the need for further NO x reductions outside of ozone nonattainment areas, before the Title IV No x reductions are fully implemented and evaluated for their impact on ozone concentrations. To further complicate the issue, USEPA has proposed revisions to the ozone standard."

"Ozone nonattainment is a problem that must be solved using sound science and not politics. It is critical that OTAG assure the strategies they recommend will achieve the goal of ozone attainment. It is also critical that USEPA take the opportunity to look at this issue objectively with participation from all affected parties. When a scientifically based conclusion is finally reached, if it is determined that one or more specific source categories are playing a large part in the ozone nonattainment problem in any nonattainment area, then each such source category should be asked to do its part in reducing emissions of ozone precursors."

VI. HEALTH DATA

The following information has been obtained from the records of Union Hospital, located in the City of Dover, regarding the documented occurrences of the following upper respiratory ailments during the years 1992 through 1996.

Upper Respiratory Infection 1992 1993 1994 1995 1996 Inpatient 30 20 17 8 8 Emergency 1102 1764 1683 2062 1859

Laryngotracheobronchitis

1992 1993 1994 1995 1996 Inpatient 10 26 5 7 6 Emergency 54 93 67 95 82

Pneumonia

1992 1993 1994 1995 1996 Inpatient 57 48 40 31 4 Emergency 53 41 39 70 70

Asthma

1992 1993 1994 1995 1996 Inpatient 127 78 67 77 65 Emergency 295 383 340 516 502

Total Emergency Room visits for the same period is as follows:

1992 1993 1994 1995 1996 Total E.R. Visits 21,252 23,976 24,235 26,097 27,198

The steady increase in the number of emergency room visits over the five year period is due a $8.3 million expansion of the Hospital completed in 1993. In addition, there has been an increase in the number of physicians based at the Hospital and the implementation of a new Emergency Room Trauma program, which has permitted the various emergency transport services to choose Union Hospital as their primary transport choice. Union has also embarked on a comprehensive EMTA program which is centered in the Emergency Room area, and which provides support and service to the areas emergency services.

One would suppose that reducing emissions would improve the health of our citizens, and this was largely true for most of the early history of the Clean Air Act. However, I think it is safe to say that we have reached a period of diminishing returns - perhaps a period of no returns at all. Even EPA's own science advisors admit that the more stringent ozone standard will not significantly improve public health.

One of the principle health studies that USEPA used to calculate health benefits found that if compliance with the proposed ozone standard is achieved, there would be a reduction of less than one percent in the hospital visits per year in the New York City area for asthma related illnesses (Ohio EPA Director Don Schregardus, January 29, 1997 testimony before Ohio Senate Energy, Natural Resources and Environment Committee. Recall that incidence of asthma continues to increase while the air is getting cleaner, (as is evidenced by the figures for Union Hospital shown above). Perhaps the billions of dollars at stake here would be better spent on health care facilities, doctors and research.

Dover does not have, nor do we expect to have a health problem associated with air pollution. Again, the air is getting cleaner and we expect this trend to continue. It is possible that reducing emissions of NOx could actually increase ozone concentrations. Under certain conditions, NOx actually strips ozone from the air. If NOx and VOC's are not reduced in the right proportion, it is possible that utility reductions may increase the concentration of tropospheric ozone. Assuming EPA's assertions of ozone impacts on public health are correct, such action may contribute to the problem. While this scenario is unlikely, it is possible if the EPA zealously pursues NOx reductions MERELY FOR THE SAKE OF REDUCTION!

From the pamphlet "Breathing Easy with Asthma", published by Marion Merrell Dow, Inc.:

"While we know that asthma tends to run in families, no one knows why certain people get it. We do know that many different things can cause an asthma attack. These are called "triggers." You can prevent episodes of breathing difficulties if you understand your personal triggers and learn how to avoid them. Not all asthma sufferers react to the same triggers, but here are some of the most common ones:

INFECTIONS. ...colds and other upper respiratory infections can trigger asthma symptoms...recurring sinus infections also may contribute to asthma.

ALLERGIES. Among the common allergens are (1) pollen from trees, grasses, ragweed, and other weeds, (2) molds, which are found outdoors and indoors, (3) animal skin, hair, saliva, and feathers, (4) house dust and the waste products of dust mites (microscopic creatures), especially in the bedroom.

EXERCISE. Exercise is good for many people, even people with asthma. But people with asthma tend to have problems with a variety of forms of exercise. Luckily before you begin exercising, you can take medication to block an asthma attack. In fact, treatment works so well that there are many people with asthma among the world's top athletes, including Olympic medalists.

CHEMICALS AND TOBACCO SMOKE. Some people are sensitive to substances without being allergic to them. You should not smoke and should avoid tobacco smoke. Other triggers may include the chemicals in household products like cleaners, solvents, paints, and chlorine bleach and even personal grooming products such as deodorants, hair spray, perfume and cosmetics. Fumes and dust encountered on the job can also lead to asthma attacks.

EMOTIONS. Asthma is not a mental or emotional disease, but strong emotions like excitement, fear and anger can affect breathing and may aggravate asthma.

MEDICATIONS. Certain medications can cause some people to have more problems with their asthma.. These include aspirin, ibuprofen and related drugs and beta-blockers used to treat high blood pressure, migraine headaches and glaucoma.

WEATHER AND AIR POLLUTION. Your asthma may be very sensitive to weather, especially unusual cold or heat and humidity or wind and weather changes. Air pollution, which can be made worse by weather, is another problem.

GASTROESOPHAGEAL REFLUX. Sometimes stomach acid can flow up into your esophagus and trigger an attack.

My personal experience as an asthmatic and as the father of an asthmatic makes me especially concerned about the causes and triggers of asthma.

It also makes me particularly aware that EPA's studies may not have accounted for the causes, other than ozone and particulate matter, of asthma attacks. In relation to the above explanation of asthma, I have the following personal observations to make.

As an asthmatic and the father of an asthmatic I know the problems asthmatics face on a day-to-day basis. In our family's case our asthma is largely triggered by allergies. Mowing the lawn can at times be sheer agony if the proper precautions have not been taken to keep our allergies in check, and playing a round of golf can be misery, (apart from the scoring process), if the same precautions are not taken.

I knew when my son was two months old that he had asthma. He wheezed, coughed, and sneezed when he was exposed to cold air, and allergens.

However, as asthmatics, my son and I know what precautions we need to take in order for us to perform certain tasks and/or exercises. Likewise, the prudent asthmatic should learn to make allowances for their asthma.

For myself, I get allergy shots on a monthly basis, take allergy pills and use an inhaler on a daily basis. My son, who excels in cross country, takes three different inhalers daily. Yet during certain meets, when the course goes through wooded areas and near farms, he still has problems.

I wonder if the study the USEPA did involving children at summer camp is flawed. Anyone with asthma knows that the spring and summer are some of the worst times for asthma related incidents. All plants, trees, grasses, and weeds are in full bloom producing pollen one of the main aggravations for asthmatics. Choosing the location for a study on asthmatics, which one would assume would have wooded areas, makes the resultant data appear worse than it really is.

VII. SUMMATION

In conclusion, the City of Dover and its municipal electric system, along with American Municipal Power-Ohio and its members, wish to convey that EPA's proposed standards for ozone and particulate matter are likely to have a burdensome, drastically- disproportionate impact on small utility systems and the local governments that own and operate them. These impacts could force public power systems out of business, or at the least impose substantially higher power costs upon our citizens and customers. Such an impact has not been adequately assessed nor justified by the Environmental Protection Agency. For these reasons, the City of Dover and AMP-Ohio respectfully request the Congress to ensure that EPA fully assess the costs and impacts of its proposed standards upon local governments and small businesses, including public power, prior to the implementation of such standards. Further, I encourage the Congress to ensure that the EPA develop and implement a plan to avoid any disproportionate impact from its air standards on small public power units, including through the use of regulatory flexibility, technical assistance and market incentives, all of which will be necessary for small public power generators to implement such stringent, technology-forcing requirements.

APPENDIX "A"

BACKGROUND ON THE CITY OF DOVER, OHIO

A.) REGIONAL DATA

The topography of the county is rolling to hilly with an average precipitation of 38 inches of rainfall per year. Temperatures range from a January average of 23.2 degrees to July with an average of 75 degrees. The mean temperature is 50.3 degrees with an annual frost free period of 150 days.

Categorized by property type, 48.8 percent of the region's land area is comprised of farms, totaling 1,287 in total.

Tuscarawas County ranks 12th statewide in land area and 32nd in total population, indicating a lower than average population density.

B.) COMMUNITY DATA

LAND USE AND HOUSING

The City of Dover is primarily a residential community and is noted for its older elegant homes built on quiet tree-lined streets. Characteristically, Dover is a commercial area and is the leading industrial city in Tuscarawas County.

The following is a break down of the total land use for the City of Dover:

31.4% Residential 9.0% Commercial 10.5% Industrial 6.0% Public and Institutional 3.2% Open Space and Recreation 5.2% Agricultural 7.1% Vacant 27.7% Street & Rail Right-of-Ways

64.40 Miles of Streets 75.03 Miles of Water Lines 59.45 Miles of Sanitary Sewer Lines 28.99 Miles of Storm Sewer Lines 85 Miles of Electric Distribution Lines

The City's housing market is characterized by low vacancy rates and a high percentage of owner-occupied units. Approximately 73% of the City's housing units are occupied by the property owners.

The average cost of home ownership in Dover has steadily increased over the last 5 years. The average sales price for the years 1992- 1996 is as follows:

1992 $70,399.34 1993 $76,147.70 1994 $80,386.97 1995 $83,737.20 1996 $93,927.86

ACCESSIBILITY AND TRANSPORTATION:

Dover is easily accessible due to the number of major transportation arteries which serve the city. Interstate 77 runs north/south connecting Dover with the larger industrial cities to the north and with Interstate 70, a major east/west route, 40 miles to the south. Interstate 77 interchanges are located on the city's west side.

Additional routes are: U.S. Route 21 and State Routes 800, 21, 211, 250, and 416. Thirty common motor freight carriers serve the area, and three bus lines provide passenger service to and from the area. Freight service is also provided by the R.J. Corman Railroad, which transports over the CSX Rail System.

There is no public intra city bus service. However, senior citizen bussing is provided on a five-day per week basis, which provides transportation to and from shopping areas, hospitals and other necessary services.

Harry Clever Municipal Airport is situated in the adjacent city of New Philadelphia with a paved runway of 3,950 feet and lighted for 24-hour use providing for private and corporate air travel. The quality of the airport for the size of the area has been an advantage in attracting major industry to the area. Canton-Akron Airport, with full service, is within a 45 minute drive to the north.

SCHOOLS

The City's public school system consists of three elementary schools, one middle school, and one high school. The total elementary enrollment is 1,275 pupils, middle school enrollment is 750 pupils, and the high school enrollment is 860 pupils. Average teacher to student ratio in all the grade levels is 1:21.6.

The Dover School system is ranked as one of the best in the State of Ohio. The Dover Middle School has been recognized as the #1 Middle School in the state for the past two years, for their facilities, and curriculum.

Dover also has one elementary parochial school. Tuscarawas Central Catholic High School is located in New Philadelphia, and is accessible to the residents of Dover and the remainder of the county residents.

Buckeye Career Center provides on the job vocational training for all county students who so desire, and is located in New Philadelphia.

All of the school systems are fully accredited and maintain an excellent overall and academic reputation.

Kent State University, Tuscarawas County Campus, offers two-year associate degree programs and selected baccalaureate and graduate offerings. Four-year degree programs are in the fields of Business Administration, Technology, Nursing, and Management and Industrial Studies, which further the educational opportunities available to Dover and Tuscarawas County residents.

Dover is served by the Tuscarawas County District Library with full audio-visual facilities and 103,000 volumes, as well as by the Dover Public Library.

HOSPITALS

Union Hospital, situated in the City of Dover, has just completed a 8.3 million dollar expansion program. New Emergency Room and Trauma facilities, as well as, new Laboratory facilities, ICU Unit, Radiology, and Surgical Units have been renovated and expanded in this full service 220 bed facility. In addition, a full service outpatient mental health facility is located adjacent at the hospital site.

PARKS AND RECREATION

Dover has 113 plus acres devoted to its parks system. The major portion is located at the Dover City Park, where 103 acres of land provides baseball, basketball, tennis, swimming, football, picnicking, walking, jogging, and an amphitheater, as well as all related recreational opportunities for the residents of the community.

Four public golf courses are within a 12-minute drive, as well as one private country club located within the city limits. The Tuscarawas County YMCA, located within the city, has just completed a 3.5 million dollar renovation program. This facility provides year-round recreational activities for the residents of Dover and Tuscarawas County.

CHURCHES

The City of Dover is served by 23 Protestant and one Catholic Church.

COMMUNICATIONS

One daily newspaper, The Times-Reporter, with a circulation of 35,400 on a seven-day per week basis services the area. Three radio stations with AM-FM programming are available, as well as television service from Cox Cable TV.

SOCIAL AND ECONOMIC FACTORS

Analysis of the total work force in Dover indicates that 73 percent work within the Dover/New Philadelphia area, with a combined percentage of 85.7 percent of the total work force residing in Dover, working somewhere within Tuscarawas County. Of this work force, 14.3 percent work outside the county the majority of which work in Stark County to the north.

UTILITIES AND SERVICES

Water is provided from the city well fields which produce 1,000,000 gallons of water per day. The city is in the process of constructing a new water treatment plant, adjacent to the well field, which will supply chlorinated drinking water to the community. The sanitary sewer plant is adjacent to the Tuscarawas River and treats an average of 1.5 million gallons of water per day.

Telephone service is provided by the General Telephone Company of Ohio. Gas is provided by the East Ohio Gas Company and electricity is provided by the Dover Municipal Power Plant.

POLICE AND FIRE PROTECTION

Dover is served by a 22 member police force and a 16 member fire department. Two fully equipped ambulances manned by the Dover Fire Department provide full paramedic service to the Dover residents. In addition, the fire department has a fully accredited Hasmat response team.

INCOME TAX

The City of Dover has a one percent income tax initiated to provide required income for operational purposes.

APPENDIX "B"

OPERATION OF THE CITY OF DOVER, OHIO CITY BUDGET FOR PERIOD ENDING DECEMBER 31, 1995

City of Dover, Ohio Combining Statement of Revenues, Expenses and Changes in Retained Earnings All Enterprise Funds For the Year Ended December 31, 1995

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BIOGRAPHY

MAYOR RICHARD P. HOMRIGHAUSEN

Mayor Richard P. Homrighausen, age 48, was born and reared in Canton, Ohio. He is a graduate of Northland College at Ashland, Wisconsin, with a degree in Business Administration & Economics, and a degree in English. He is also a graduate of the Cincinnati College of Mortuary Science.

A Licensed Funeral Director and Embalmer in the State of Ohio, he moved to Dover in 1977, where he founded the Homrighausen Funeral Home. In 1981, he started the R. W. Hoge Wood Products & Awards Co. and in 1984, with a partner, began operations of the Canal Dover Novelty Co.

Active in Professional and Community Associations he is a Past President of District 16, Ohio Funeral Directors Association and past member of the Executive Board of Directors of the Ohio Funeral Directors Association. He was the 56th President of the Ohio Jaycees, and is a past member of the Executive Board of Directors of the United States Jaycees. Locally he served as the 35th President of the Dover Jaycees, was Charter President of the Dover Community Development Association, and currently serves as Vice Chairman of the Tuscarawas County Republican Party, and President of the Dover Republican Club.

He is a Past Vice President of Grace Lutheran Church Council at Dover, where he is an Ordained Deacon, Liturgist, and Lay Homilist. He is presently serving his second four year term as Vice President of the Northeastern Ohio Synod of the Evangelical Lutheran Church in America.

He served as Ward I City Councilman prior to his election to the office of Mayor in 1991. He is currently serving in his second four year term. During his tenure as Mayor, he has implemented an extensive plan of expansion for the city's light plant, worked effortlessly with the EPA to delay and/or rescind its order to chlorinate Dover's drinking water supply, spearheaded the combining of two departments (General Services and Electric Field Division) under one roof with the purchase and renovation of an unoccupied industrial building in the city, worked with City Council in passing an industrial waste ordinance that will be paying for itself and will not jeopardize our wastewater system, and continues to work toward economic development in the city while striving to provide a safe and healthy environment for the Citizens of Dover.

His wife, Linda, who plays an integral part in the operation of the family businesses, is a Registered Nurse at Aultman Hospital at Canton, Ohio. They have two sons, Nicholas and Peter, ages 14 and 11 respectively.