The Adirondack Park is the largest park of any kind in the contiguous United States. It is nearly three times the size of Yellowstone National Park and covers one fifth of the State of New York, making it equal in size to the State of Vermont. The Adirondack Park is roughly six-million acres of public and private land containing the largest assemblage of old growth forest east of the Mississippi River. The Adirondacks include the headwaters of five major drainage basins. Lake Champlain and the Hudson, St. Lawrence, Mohawk and Black rivers all draw water from the Adirondack Park. Within the Park are more than 2,800 lakes and ponds, and more than 1,500 miles of rivers fed by an estimated 30,000 miles of brooks and streams. The Park contains 46 mountain peaks more than 4,000 feet in elevation. Forty-five percent of the Park is publicly owned Forest Preserve protected as “Forever Wild” by the New York State Constitution since 1895. One million acres of these public lands are further protected as Wilderness.

The Adirondack Council was founded in 1975. It is a private, not-for-profit organization dedicated to enhancing the natural and human communities of the Adirondack Park through research, education, advocacy and legal action. We receive no federal or state funding.

Our interest in The Clean Air Act and the problem of acid rain is long held. We helped craft the first acid rain law in the country which was adopted in 1984. The New York law identified both sulfur dioxide and nitrogen oxide as precursors to acid rain, sought limits on total emissions from power plants within the state and even proposed an innovative trading mechanism that Congress adopted nationwide in the Clean Air Act Amendments of 1990.

The Adirondack Council was also an active participant in the national debate that led to the adoption of the acid rain program in Title IV of the Clean Air Act Amendments of 1990. Our publication, “Beside the Stilled Waters,” which was produced and distributed in cooperation with our member organizations, brought the problem of acid rain to the attention of the nation and to Congress. (See Also “Acid Rain and the Adirondacks: A Legislative History.” Albany Law Review. Vol 66 Number 1 2002)

The acid rain program, as adopted, was not without controversy. Congress adopted an innovative “cap and trade” program, modeled after the New York legislation, which would abandon the so-called “command and control” approach to regulation, in favor of a free wheeling pollution allowance trading program that would provide utilities with the flexibility to make compliance strategies part of their long-term business planning. The Adirondack Council, among others raised concern that the cap on total emissions might not be low enough to protect sensitive areas. Others debated both the need for and the cost of the program

The Adirondack Council was also one of the most severe critics of the program EPA designed to implement Title IV. We had concerns about the initial allocation of credits, the adequacy of the continuous monitoring systems, and, together with the Natural Resources Defense Council sought changes in federal court. (Cases consolidated under EPA v. Browner) We are pleased to say that years of good-faith negotiation between the USEPA, the affected industry and the conservation community resulted in very positive changes. Unfortunately, EPA now administers an efficient mechanism that will accomplish a goal that, in hindsight, was too modest.

In 1992, a deputy administrator for the EPA grandly pronounced in a press release that the regulations implementing the new Clean Air Act Amendments would mean “the end to acid rain in the Adirondacks.” Certainly that was the intention of the Senate and the House. But wisely, Congress had ordered a series of reports that would advise the members of the success or failure of the goals of the acid rain program.

Sadly the news has nearly all been bad.

Due to its location and its thin soils, the Adirondack Park has suffered the worst environmental damage from acid rain in America. It is the region where the problem was first documented in the United States. Prevailing winds carry power plant emissions from the Ohio Valley into the Adirondack Mountains, where they fall as acid rain, acid snow, acid fog and dry acidic particles. The acidity alters soil chemistry, inhibits plant growth and releases heavy metals that are toxic to plants, animals and fish.

Reports conducted by a host of federal agencies have shown that more than 500 of the Park’s 2800 lakes and ponds have become too acidic to support their native life over the past 40 years. The same is true for 28 percent of the Park’s 2,000 miles of navigable rivers. Each spring the percentage of acidic rivers explodes to almost 60% over the course of several weeks as the winter’s acidic snowpack melts. The Park’s high elevation spruce and fir and its spectacular maples, are disappearing at an alarming rate. Similar damage to forests is worsening across the East Coast, as well as the Colorado Rockies and the coastal mountains of California.

Every report issued by the federal government in the past ten years reflects these observations, and worse, predicts continuing damage if more is not done to control power plant emissions. The dire predictions are also reflected in a host of other reports from scientists in the field which we discuss later in this testimony.

In 1998, the Adirondack Council was invited by this Committee to testify about Senate #172, the Acid Rain Control Act, proposed legislation then sponsored by the late Senator Patrick Moynihan. We said at that time that any legislation that seeks to address the acid rain problem should, at a minimum contain two provisions. The same holds true today:

--Build on the successful sulfur dioxide cap-and-trade program by creating a third phase of reductions further along the current time line. All of the advantages of the current program can be preserved in a predictable, flexible, and cost-effective manner while reducing sulfur-dioxide emissions by an additional 50% or more.

--Create a new year-round cap-and-trade program for nitrogen-oxide emissions from utility smokestacks that mirrors the successful program already in place for sulfur. The role of nitrogen deposition both in high elevation waters and forests and in our coastal estuaries is now much better understood and accepted by the scientific community. This cap and trade program should reduce nitrogen emissions from utilities nationwide by approximately 70% or more of 1990 levels, resulting in a substantial and beneficial cut that is also reasonably achievable.

It is our conclusion that the bill before you now, Senate # 485, the Clear Skies Act, meets and exceeds those two minimum provisions. The bill embraces the cuts envisioned in the Moynihan-D’Amato-Schumer-Clinton proposals over the past several sessions of Congress and then goes beyond those levels in an additional phase of reductions We believe that adoption of the caps proposed for sulfur dioxide and nitrogen oxide in the Clear Skies Act will set the course for recovery of the Adirondacks, and the many other acid rain ravaged sections of the country.

Just last week, final approval was granted for the State of New York to adopt the toughest acid rain regulations in the country. The New York initiative was announced by Governor Pataki three years ago, when I last testified before this subcommittee. Senator Voinovich was presiding that day. The Senator, upon hearing the news of the announcement, said, as I recall, that it was an important step. That New York had to show that it was willing to do what we were asking of the rest of the country. Well Senator, it is done, and we are back. The adoption of the regulations reaffirms once again New York’s commitment to this issue, despite the fact that more than 80% of our acid deposition problem originates outside our borders. We are doing what we can, but we need your help.

The Pataki rules are modeled to implement the provisions of the Acid Deposition Control Act authored by the late Senator Moynihan in 1997, which was reintroduced in the last session of Congress by Senators Schumer and Clinton. New York will require over the next several years a 50% reduction from its power plants of sulfur dioxide emissions and a 70% cut in emissions of nitrogen oxides from current levels.

The new rules in New York raise an important issue that should be considered as an amendment to the Clear Skies Act. New York is part of the EPA brokered 22 state SIP Call compact that will reduce nitrogen emissions significantly during the summer ozone season by 2004. Under the new rules, however, New York power plants will be required to implement year- round controls in 2004.

USEPA has established a twenty-two state utility cap-and-trade program for nitrogen emissions as the preferred response for state compliance with its new ozone program. The EPA SIP call, which is only summer seasonal, will not address in a significant way, the acid rain problem. The acid rain dilemma is the total loading of nitrogen to sensitive areas. For high elevation areas the main concern stems from the buildup of nitrogen in the snow pack and the subsequent “acidic shock” to aquatic systems in the spring of the year. Year-round controls will be necessary to address the nitrogen problem. Furthermore, only nationwide reductions will address the problems outside of the twenty-two state region covered by EPA’s plan.

Congress can level the competitive playing field for the utility industry by enacting national controls which will permit an expanded allowance trading market that will be more efficient and cost effective. The Congressional Budget Office, in its report, Factors Affecting the Relative Success of EPA’s Nox Cap-and-trade Program (June 1998), identified similar benefits to providing additional statutory authority in a report on the proposed rules this summer.

The Clear Skies Act as currently drafted does not impose those year-round controls until 2008 for the SIP Call states. The Adirondack Council requests that the Committee to take a look at whether the imposition of year-round controls could be advanced for the states in that eastern trading region.

The Adirondack Council would appreciate consideration of two other amendments to the Clear Skies Act today as well. The second amendment has already been considered once by this Committee. In a mark-up of then Chairman Jefford’s bill last session, Senator Clinton offered up an amendment which was adopted by the Committee. The amendment was similar to a provision of Senate #588 of last year, which would ensure that measurements of water chemistry were conducted in acid sensitive areas of the country. If by a date certain the benefits anticipated by the legislation were not occurring in sensitive areas, the Administrator would have the authority to reduce emissions from contributing sources to reduce acid deposition in the affected area to levels where the affected water bodies have the capacity to neutralize acids sufficiently to avoid additional damage.

We have every reason to expect that, with the level of reductions proposed in the Clear Skies Act, that such a provision might never need be invoked. But we prefer a belt and suspenders in this case. Neither our region of the country, nor any other that suffers from acid rain, should need to wait another twelve years to solve this problem. We urge you to consider adding language that allows a limited reopener by the Administrator to protect sensitive resource areas. We appreciate that Senator Jeffords has retained the provision in the reintroduction of his bill this session.

Our third request is that the Committee examine whether there can be faster timetables, especially in the out years for the second phases of SOX and NOX reductions. One of the remarkable aspects of the 1990 Amendments was that the industry was able to fully comply with two phases of sulfur dioxide reductions only five years apart. New York is requiring our power plants to implement year-round reductions of nitrogen oxides very rapidly. While we concede that our generators had a very public “notice” three years prior, the Committee should examine whether a more ambitious timetable can be accomplished in the out years. The faster we lower emissions, the quicker we will see recovery.

There are many issues ahead to resolve, including the timing and depth of the reductions in emissions of the target pollutants. We encourage you to adopt the deepest cuts in the faster manner that can be accomplished in negotiations with your colleagues. We are excited by the fact that this bill which you sponsor , Mr. Chairman, and that of Senator Jeffords and the bill anticipated from Senators Carper and Chafee all will solve the acid rain problem. Every year that can be gained and every ton that can be saved will hasten the biological recovery of our parks, our rivers and our coastal estuaries, and will save thousands of lives.

Last spring , President George W. Bush visited the Adirondack Park on Earth Day. He said he was committed to solving our acid rain problem and we believe him. We were pleased to see the President chose the solemn occasion of the State of the Union message to renew that commitment. The introduction by the leadership of this Committee of the Administration’s proposal is an important step forward. The Clear Skies Act is a good point at which to begin your deliberations Congress now has the historic opportunity to stop acid rain, smog and haze from harming our environment and our health.

I want to extend at this time, on behalf of the Board of Directors of the Adirondack Council, an invitation to all the members of this Committee to visit the Adirondack Park and see what a wonderful resource you will have saved. Perhaps, you will hear the haunting call of the loon in the wilderness and know that you have acted to ensure that future generations will share the experience.

This nation committed itself to the task of ending the destruction of acid rain over a decade ago. We think it is time to finish the job. We urge the earliest consideration of measures to improve Title IV of the Clean Air Act and bring an end to acid rain this year.. Thank you again.

Reports to Congress have shown the need for more cuts in emissions

The first report was due in 1993, from the USEPA (ordered under sec. 404, Title IV appendix B of the 1990 CAAA). Entitled the Acid Deposition Standard Feasibility Study Report to Congress, the report (dated October 1995) was finally released in 1996 under the threat of litigation from the Adirondack Council and the State of New York.

The report concluded that the pollution reductions accompanying the 1990 Clean Air Act Amendments would not be sufficient to allow recovery of certain sensitive ecosystems and that some would continue to get worse. The report was particularly compelling for New Yorkers because it revealed that, despite the reductions expected from the 1990 CAA Amendments, the loss of nearly fifty percent of its lakes and acidification of most streams in the Adirondack Park could be expected.

The second of two reports to Congress, the Report of the National Acid Precipitation Assessment Program, NAPAP Biennial Report to Congress: An Integrated Assessment, was submitted to Congress during the August recess in 1998 (ordered under Sec. 901J of the 1990 CAAA). It was due in 1996 and it too was released under pressure from then Senators Moynihan and D’Amato and the threat of litigation from the State of New York. The NAPAP report confirmed and substantially elaborated upon the findings of the earlier report to Congress submitted in 1996 from the EPA.

We believe that a fair reading of both reports to Congress lead to the same two findings:

First, the mechanism of a national cap in emissions coupled with the pollution allowance trading program has been an outstanding success. Facilities are in compliance with Title IV and on schedule. The administrative and implementation costs of the program are less than projected at the time of adoption. The simple, efficient design of the program, coupled with large automatic penalties for exceedences, and the diligence of EPA Administrators and the regulated community are all factors in this success.

The administrative and implementation costs are far below those associated with traditional regulatory approaches because in many ways the program is self-implementing. Devices known as Continuous Emissions Monitors (CEMS) count each ton of pollution as it is emitted from the smokestack. At the end of each year a utility must have enough credits (either initially allocated or purchased) to cover those emissions. The accounting of allowance holdings and trading is in a database maintained by EPA. Each pollution credit is tracked with its own serial number.

The compliance costs of the program are proving to be far below those estimated when Title IV was adopted. EPA estimated that the fully implemented program would cost four billion dollars a year, and industry estimates were much higher. A report by the the Massachusetts Institute of Technology found compliance costs of less than one billion dollars per year. Again, the design of the program helped achieve these relatively low compliance costs. Other factors, such as rail transportation improvements that reduced the cost of transporting low-sulfur coal were crucial here as well.

The market for trading allowances is improving as well. Each year there are more “economically significant” trades occurring and the value of each allowance is rising steadily. In fact, the Adirondack Council is a market participant. We have acquired thousands of pollution allowance credits, most of them donated as a community good- will gesture by utilities in New York. Unlike most other holders of allowances, it is our intention to retire all credits we may obtain by transferring them to a retirement account we maintain with USEPA. Thousands of individuals around the nation, have “Clean Air Certificates” on their home or office walls, assuring them that the Adirondack Council has permanently retired, in their name, one-ton of sulfur dioxide emissions.

There is a real need for emission reductions beyond those called for in the 1990 Amendments. Projections (by EPA and ICF Resources) of what new SO2 and Nox reductions would cost indicate that deep new reductions could be achieved at or near the initial four billion dollar estimate made by the House and Senate in 1990.

The second major finding of both reports to Congress was that despite the success of the regulatory scheme, the overall cap in emissions is too high to accomplish one of the primary goals of Congress, which was to protect sensitive resource areas from the harmful effects of acid rain.

The NAPAP report also confirmed that acid rain is not just an Adirondack problem.

Ecological damage is significant and widespread

The damage that sulfur and nitrogen pollution causes is far from a regional issue. It is an issue of national importance. Excess nitrogen in waters and in soils-- “nitrogen saturation”-- can be found in the North East and in West Virginia’s Allegheny Mountains, Tennessee’s Great Smoky Mountains, Colorado’s Front Range of the Rockies and even as far west as the San Bernardino and San Gabriel Mountains. High levels of nitrogen deposition are causing nitrate to leach in stream water from these watersheds. This nitrate leaching acidifies streams and strips base cations from soils. In snow covered areas, the flush of nitric acid stored in the snowpack is the leading cause of “acid pulses” or “spring shock”, which is responsible for fish kills during spring thaws.

NAPAP found that high elevation areas in the Northeast and the Appalachians are bathed in acidic cloud water for extended periods of time. Sulfuric acid from sulfur dioxide emissions is the significant cause of the widespread loss of red spruce trees in these areas. The reason for the die back is the leaching of calcium from the spruce needles and aluminum from the soils by the acidic fog which makes the trees susceptible to frost and winter injury.

The coastal estuaries of the entire east coast suffer from airborne inputs of nitrogen that can make up nearly 40% of the total nitrogen loaded into their systems. In estuary systems such as the Long Island Sound, Narragansett Bay, the Chesapeake Bay and Tampa Bay in Florida, nitrogen-based pollution is overloading the water with nutrients. This causes “eutrophication,” an overabundance of algae. When algae dies and decays, it depletes the water of precious oxygen needed by all aquatic animals. This condition is known as hypoxia. Algae blooms are also associated with fin fish kills, shellfish kills and human illness.

NAPAP also concluded that areas of the United States that are not seeing damage now are likely to in the future, due to an effect known as soil acidification. Over the long term, acidic deposition is slowly leaching away key soil nutrients, like calcium and magnesium (known as base cations) that are essential for plant growth. This nutrient depletion is occurring in high- and mid- elevation forests in New England, New York and the Southern Appalachians. NAPAP cited studies which concluded that fifty- nine percent of the commercial pine forest soil in all of the South East has low enough reserves of these chemicals to warrant concern.

Acid deposition, whether from sulfur- or from nitrogen- based pollution, not only leads to base depletion, but also results in the release of toxic compounds from soils to living things. For example, the release of aluminum from soils rapidly accelerates when pH drops below 5. The release of aluminum interferes with plant biochemistry. It is also the leading cause of fish mortality in affected lakes. In other words, it is not only the acidity directly, but also the aluminum toxicity that is responsible for the damage. This effect is very widespread. NAPAP cited studies, conducted in the Shenandoah National Park, show that fish species richness, population density, condition, age distribution, size and survival rate were all reduced in streams no longer able to neutralize acidity. Another NAPAP study of streams in the Adirondacks, Catskills and Northern Appalachians in Pennsylvania showed that episodic acidification “acid pulses” had long term adverse effects on fish populations including significant fish mortality.

Lake acidification, whether from sulfur or nitrogen is also clearly implicated in the increase in mercury concentrations found in fish. Acidity leads to greater conversion of mercury from its less toxic elemental form to methyl mercury, which is much more toxic. Fish consumption warnings due to mercury contamination are common in many states and are on the rise. The bio-accumulation of mercury in some species of fish in New York has reached levels that threaten our loon population, which are dependent on the fish as a primary food source. In dozens of lakes in the western mountains of the Adirondack Park and in the Catskill Mountain reservoirs of New York City’s water supply, the levels of mercury in some fish species exceed that which is safe for human consumption, and children and women of child-bearing age are urged to avoid perch and bass altogether. The acid rain problem is now a public health problem.

The cost to Americans from acid rain is not just the loss of pristine lakes in one of its greatest parks, or the almost imperceptible die out of sensitive species of trees, or even the haze obscures the views of four national parks, it is also in the loss of our great monuments, our collective tribute to our ideals and to those who have come before us.

The Capitol building is crumbling. The corrosive effects of acid rain are eating away at its marble and that of many of the great monuments on the mall. The Lincoln memorial corrodes more every year. So it is with buildings and monuments throughout the Capitol, so numerous and so obvious that until recently you could purchase an illustrated guide to the acid rain damage to our nations capitol, thoughtfully provided free of charge to the public by the U.S. Park Service. (Acid Rain and our Nation’s Capital, U.S. Dept. of the Interior/U.S. Geological Survey, 1997)

The monuments to the fallen on the great battle sites of the Civil War, Gettysburg and Vicksburg, are dissolving from the acid bath they endure each rainy day. The Statute of Liberty stands melting on its solitary island.

This is why the fight to stop acid rain has been joined by many of the nation’s prestigious organizations dedicated to historic preservation, such as the National Trust For Historic Preservation and the “Save Our Sculpture” Project of the Smithsonian.

All of this disturbing information was been exhaustively peer reviewed and verified by the May 1998 National Acid Precipitation Assessment Program Biennial Report to Congress.

Other studies have found similar results.

Environment Canada, in its 1997 report “Towards a National Acid Rain Strategy”, said that reducing sulfur emissions significantly beyond the current Clean Air Act requirements in both countries would be needed for all of eastern Canada to be protected from acid rain. In southern Canada, an area the size of France and Britain combined continues to receive harmful levels of acid deposition. As many as 95,000 lakes in the region will remain damaged.

A study released by Trout Unlimited in 1998, that was conducted by the University of Virginia found that without deep additional deposition reductions up to 35% of Virginia trout streams would become “chronically acidic” and would no longer support trout populations. The study further estimated that thousands of trout stream miles in the Southern Appalachians may be lost to acidification.

While we hold no special expertise in the field of the health effects of air pollution, a brief review of the literature reveals some interesting facts. EPA’s 1995 study, Human Health Benefits from Sulfate Reductions Under Title IV, estimates that every dollar spent reducing SO2 emissions could generate ten dollars in savings from reduced health care costs. Considering the steep rise in asthma cases, acting to reduce air pollutants now is an important health initiative.

In 1999, Nature, perhaps the most respected journal of its kind, published the broadest geographical study of acid rain to date. Written by 23 scientists, all of them top acid rain researchers, and taking samples from roughly 200 sites, the study again confirmed and elaborated on the disturbing findings of earlier works.

Unfortunately, the next scheduled report by NAPAP to Congress is again two years overdue. It is easy to predict that its findings will only stimulate more demand for action by Congress on acid rain. Several studies released since that time only reinforce the desirability of moving ahead.

In May of 2000, the Ecological Society of America released it workshop report from its 1999 conference of 50 of North America’s top research scientists. The report states that parts of New Hampshire, Maine and California were suffering lake acidification and forest death as severe as those observed in New York’s most sensitive areas. Major findings of the report included:

* More cuts are needed in sulfur dioxide and nitrogen oxides to protect sensitive areas of the country from environmental damage;

* The White Mountains of New Hampshire and the lake country of Maine were showing little or no recovery;

* Nitrogen oxides can be equal in destructive power to sulfur dioxides;

* Nitrogen saturation, already begun in the Adirondacks, is actually worse in the San Gabriel and San Bernardino Mountains of southern California, which had the highest concentrations of nitrogen in North America;

* Acid shock is more widespread than previously believed; and

* It is very important to continue the long-term research into the effects of acid rain, including studies of cloud water, dust particles, rain, sleet and snow.

At the beginning of the last session of Congress, the Hubbard Brook Research Foundation released a new summary report, Acid Rain Revisited of its findings of the scientific advances since the 1990 Clean Air Act Amendments. The report’s main conclusions are that our soil problems are getting worse and the forests are dying faster than we thought. The Hubbard Brook study is one more brick in a huge wall of evidence that acid rain must be stopped as soon as possible.

Briefly stated, the findings include;

* Acid rain is still a problem and has a greater environmental impact that previously projected;

* Acid deposition has altered soils and stressed trees in areas of the Northeast and has impaired lakes and streams;

*The Clean Air Act has had positive effects, but emissions and deposition remain high compared to background conditions; and

* The rate and extent of ecosystem recovery from acid deposition are directly related to the timing and degree of emission reductions.

And in January of 2003, the US Environmental Protection Agency’s Office of Research Development issued a report showing that the cuts in air pollution since 1990 have produced corresponding modest-but - encouraging improvements in concentrations in lake water across the Northeast, including the regions’s hardest-hit area, the Adirondack Park. The good news from that report is that we have been taking the right approach by reducing sulfur dioxide and nitrogen oxide emissions from power plants. We are targeting the right sources and the right pollutants. Our natural ecosystems are beginning to show signs of chemical recovery, but is a long road from the start of chemical recovery to full biological recovery- the point where you see the fish, trees, and other native species coming back in healthy numbers. We need to continue down this road and act this year to make significant new cuts that will not only turn the corner but also accelerate the natural healing process.

The call for additional action on acid rain is not just a New York plea.

The problems these pollutants bring are felt from Maine to Florida and beyond. The actions we call for will improve the environment and public health to the benefit of virtually every American.

In May of 1998, the Conference of New England Governors and Eastern Canadian Premiers recommended additional reductions in utility emissions of SO2 and NOx, similar to the provisions of the Moynihan legislation.

In August of 2002, the unanimous report of the Southern Appalachian Mountains Initiative, released by representatives of eight southern states (North Carolina, South Carolina, Kentucky, Virginia, West Virginia, Tennessee, Georgia and Alabama), concluded that its mission cannot be accomplished without emissions reductions in states outside the region. The final report also states that “The SAMI states support and will promote national multi-pollutant legislation for electric utility plants to assure significant sulfur dioxide and nitrogen oxide reductions, both

inside and outside the SAMI region. This national multi-pollutant legislation should result in no less than the reductions for sulfur dioxide and nitrogen oxides represented by the Administration’s Clear Skies Initiative”. We concur.

Congressional action is the best solution

The sad alternative of more delay is continued destruction of the nations most pristine resources and treasured monuments. The failure to act now will also heighten the desire to find alternative, and more confrontational, routes to stop acid rain.

The disturbing and overwhelming evidence of the destruction of the streams, lakes and forests on public lands, protected by New York’s State Constitution as “Forever Wild” and the pollution of our coastal estuaries has raised grave concern in New York. Absent clear movement by Congress to adjust the sulfur program and deal with the companion problem of nitrogen as long-range transport of pollutants, there have already been numerous efforts in New York to mitigate the problem through any other avenue available. In the past several years, the Office of the Attorney General of the State of New York has sought legal redress via other provisions of the Clean Air Act. Most recently, Attorney General Eliot Spitzer has brought suit against seventeen utilities in five states, using the long arm of the Clean Air Act to force change.

In 2000, New York’s State Senate passed unanimously a bill that is intended to discourage the trade or sale of excess pollution allowances that our own utilities may own for the eventual use in twelve upwind states. I assure you, the New York State Senate is not known for its hostility to business or to the free market. The State Senate action, we believe, reflects a consensus that something must be done. The State Assembly did adopt the same measure, which was signed into law that year. Not surprisingly, a coalition of utilities challenged the measure on constitutional grounds, winning at the federal district court level. The lower court decision is currently under appeal by the State, where an opinion is pending. (See Clean Air Markets Group, 194 F.Supp. 2nd.147 NDNY 2002)

We believe that the greater the delay in action by Congress to repair the flaw in the acid rain program, the more likely that you will see actions like those just mentioned in New York taken in other affected states. The better alternative is to fulfill the original intent of Congress to solve the acid rain problem by taking action soon.