Question 2c:

Answer:

QUESTIONS FROM CONGRESSMAN COOPER

Projected carbon dioxide emissions from those same sectors that you expect to gain from the President's proposed National Energy Strategy (compared to base case and Clean Air Act ĝains).

Tables and a figure are attached.

The overall effect of the Clean Air Act Amendment of 1990 (CAAA) on carbon dioxide is rather small. Removing the CAAA from the NES Actions would

increase carbon dioxide emissions in the projections as given below in millions of metric tonnes of

FOSSIL FUEL CO2 EMISSIONS by FUEL-million metric tonnes Carbon (mtC) per Year

FOSSIL FUEL CO2 EMISSIONS by SECTOR-million metric tonnes Carbon (mtC) per Year

Question 2d.:

Answer:

QUESTIONS FROM CONGRESSMAN COOPER

Key assumptions regarding (i) fuel use (coal, oil, natural gas, renewables, nuclear and demand-side management) for each sector during the time periods in question; (ii) reductions in other greenhouse gases for each sector during the same time periods; (iii) reductions from "sinks," such as trees, particularly the amounts attributed to Federal forestry program using the same time intervals; and (iv) other basic assumptions you believe to be required for proper understanding of this data.

The Department will shortly by mid-April - publish a supplement to the National Energy Strategy (NES) on the analytical methodology and assumptions used for the projections in the NES. This document details the assumptions used in the "Current Policies" and "NES" cases with respect to fuel use, tree initiatives, CFC reductions, the Clean Air Act, efficiency improvements, tax credits and reforms, and technology

improvements. When this report is printed, we will be pleased to make it available to you.

QUESTIONS FROM CONGRESSMAN COOPER

Pricing of Electricity from Federal Facilities

We

Question 4: On November 19, 1990, I wrote to President Bush along with 15 of my colleagues from the Tennessee Valley region. We expressed our concern about an OMB proposal for the NES that would force price hikes for customers of federal electric power. noted that this proposal conflicts with the explicit direction of the Congress not to change the pricing of hydroelectric power by agencies like TVA. (see Section 506, Public Law 101-514, the 1991 Energy and Water Appropriations Act and attached letter.)

Answer:

Nonetheless, it is my understanding that the
President's NES includes such a provision. Why?
Since such policy would undoubtedly raise energy
prices and cause more inflation in our region, how
does the Department of Energy maintain that it would
be in the public interest? What effect would the
price hikes caused by this policy have on economic
and industrial development in the TVA region?

Public Law 101-514 prevents the Department of Energy
from analyzing policy options that would result in the
sale of PMA assets or would alter their pricing
policies from cost-based rates to market-based rates.
During development of the NES, one proposal presented
to the Cabinet for consideration would have increased
PMA rates to market levels. This proposal was rejected
by the Administration and is not included in the NES.

Given

The Administration found, however, that the existing
repayment terms on PMA unpaid appropriated debt amount
to a subsidy for the PMA ratepayers at the taxpayers'
expense. Such subsidies tend to discourage
conservation and encourage energy consumption.
the serious financial constraints the Federal
government operates under, we can no longer afford this
subsidy. The Administration is therefore proposing a
measure which will generate additional revenues to the
Treasury, but which does not have a serious rate impact
on PMA customers.