North Carolina's Clean Smokestacks Act

Secretary William G. Ross, Jr.
N.C. Department of Environment and Natural Resources

North Carolina's General Assembly enacted legislation in 2002 that could provide a model for other states in controlling multiple air pollutants from old coal-fired power plants. The Clean Smokestacks Act, signed by Governor Mike Easley in June, requires power companies to reduce their smog- and haze-forming emissions by approximately three-fourths over the next decade. We hope this landmark multi-pollutant legislation will set the standard for similar actions by the federal government and other states.

Under the act, coal-fired power plants must achieve a 77-percent cut in nitrogen oxide (NOx) emissions by 2009 and a 73-percent cut in sulfur dioxide (SO2) emissions by 2013. NOx is the main cause of ozone, one of North Carolina's biggest air quality problems, and it contributes to haze and acid rain. SO2 is the main cause of tiny particle pollution, haze and acid rain. Although the act does not set caps on mercury, we estimate that the controls needed to meet the NOx and SO2 limits will reduce mercury significantly -- perhaps as much as 60-90 percent. Reducing emissions of these pollutants will help control North Carolina's biggest air pollution problems, thereby safe-guarding public health, improving visibility and protecting the environment.

An important feature of the Clean Smokestacks Act is that North Carolina's two largest utility companies, Duke Power Co. and Progress Energy Corp. (formerly known as Carolina Power & Light), must achieve these emissions cuts through actual reductions at their 14 power plants in the state - not by buying or trading emissions credits from utilities in other states, as allowed under federal regulations. The utilities also cannot sell credits for their emissions cuts, ensuring that utilities in neighboring states don't negate the gains achieved in North Carolina by purchasing the rights to increase or to avoid controlling their own emissions.

These measures ensure that North Carolina should gain substantial improvements in air quality over the next decade or so.

Under the legislation, power companies must reduce their NOx emissions year-round, not just during the ozone season in the warmer months, as under federal requirements. The bill also calls on the N.C. Division of Air Quality to conduct a study of mercury and carbon dioxide emissions in the state, and to make recommendations to the legislature by September 2005 on possible controls for those two pollutants.

We learned a lot in pursuing adoption of the Clean Smokestacks Act. One of the biggest reasons for the bill's passage was the involvement of various stakeholders in developing the legislation. Negotiations included representatives from power companies, environmental groups, the legislature, the governor's office, state agencies, electric rate payers' associations, non-utility industry groups and the state utilities commission.

The legislation had its genesis in a series of public hearings the state held in 2000 regarding rules for complying with the U.S. Environmental Protection Agency's call for revised State Implementation Plans for controlling NOx. The hearings attracted large crowds, particularly in the mountains of western North Carolina, and helped convince state Rep. Martin Nesbitt and state Sen. Stephen Metcalf to co-sponsor a multi-pollutant bill that went beyond the requirements of the EPA's SIP Call.

The state Senate passed the initial version of the Clean Smokestacks Bill in 2001, but it stalled in the House because of concerns over its effects on utility rates for industries. During the interim, Governor Easley and legislators met with utilities and other stakeholders to develop a compromise that could win support in the House. What resulted from these negotiations was a revised bill that would freeze electric rates for five years while allowing utilities to accelerate the write off of their costs for installing new pollution controls - estimated at $2.3 billion. This compromise broke the stalemate, and allowed the bill to move forward.

Another factor working in support of the bill was the completion of the Southern Appalachian Mountains of Initiative (SAMI), a multi-year study of air quality problems in an 8-state region. SAMI modeling provided conclusive evidence that North Carolina would gain substantial benefits from the Clean Smokestacks Act, regardless of what happened in other states. Previously, one of the arguments against the bill was that it would not do much good because of pollutants blown into North Carolina from other states. SAMI showed that each state would benefit most from reducing emissions within its own boundaries. It also showed the cuts would yield benefits across the state, not just in the mountains of Western North Carolina.

Legislators again relied on the SAMI findings with respect to the effects of pollution from other states and regions by adding the following section in the final act: "It is the intent of the General Assembly that the State use all available resources and means, including negotiation, participation in interstate compacts and multi-state and interagency agreements, petitions … and litigation to induce other states and entities, including the Tennessee Valley Authority, achieve reductions in emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) comparable to those required by … this act, on a comparable schedule. The State shall give particular attention to those states and entities whose emissions negatively impact air quality in North Carolina or whose failure to achieve comparable reductions would place the economy of North Carolina at a competitive disadvantage."

We hope that the federal government and other states will follow our lead in North Carolina and achieve comparable reductions on a comparable schedule. In doing so, they will help themselves and also help North Carolina finish the work it has begun.


For the complete text of the Clean Smokestacks Act and related information, please visit the N.C. Division of Air Quality's web site at

Last Modified: Wed May 13 15:18:50 2009