112 



logue with the Department, we're convinced that that quantifica- 

 tion was so suspect that we shouldn't proceed with it. 



So we assessed CO2 damage on a qualitative basis and entered 

 into an agreement that we would try to negotiate with the devel- 

 oper so that they would take the future CO2 risk. In this particular 

 case, Tenaska did accept the risk of future control of CO2. They 

 went out and sought insurance against future CO2 taxes and were 

 unable to procure it. 



So we ended up with an agreement that they would spend a sub- 

 stantial amount of their profits, $1 million, on a sequestration ac- 

 tivity for CO2, and that sequester is, we estimate, up to 50 percent 

 of the CO2 fi'om the project over its life, and that if there were CO2 

 taxes, we would have to open up the agreement and renegotiate the 

 prices and see who would bear them. 



Mr, DeFazio. How do you assess that risk of Congress passing 

 a tax? Congress likes taxes. 



Ms. HiCKEY. I have no idea. It's just basically a business situa- 

 tion where we were likely to lose an arrangement and we had tried 

 to negotiate that sort of damage assumption with two different 

 Independent Power Producers and were unsuccessful. 



Mr. DeFazio. Before I go to the Council, perhaps Ms. Ervin can 

 enlighten me a little bit. I know you're not the PUC, but I think 

 you're fairly familiar with how the PUC operates, just on the ques- 

 tion of the confidentiality when one of these regulated utilities 

 brings a proposal for a generating facility to the PUC. 



The PUC does receive all the information, does it not, and agrees 

 to hold it confidential so they can make a reasonable assessment. 



Ms. Ervin. Mr. Chair, I believe, that is correct, but this is really 

 outside of my area of expertise. 



Mr. DeFazio. I know you're not the PUC, but I just thought 

 maybe 



Ms. Ervin. I believe that is certainly the approach, though. 



Mr. Hardy. Mr. Chairman, if I could interject. 



Mr. DeFazio. Yes. 



Mr. Hardy. We did check with all the State PUCs at the staff 

 level and what Christine reflected back was the answer we got 

 from all the State PUCs, which was that was the way they treat 

 the information. 



Mr. DeFazio. Then my question to Mr. Grace and/or Mr. Dimcan 

 would be, Why didn't the Council request all the pertinent data, 

 agreeing to keep the pertinent data confidential? I'm a little puz- 

 zled as to how you, as the guardians of the 6(c) process, can make 

 a final determination that this meets all the requirements of the 

 Act and is totally cost-effective without having reviewed every- 

 thing, including the confidential information. 



Would you have provided it, had they asked? Well, let me ask 

 Mr. Grace first, then you can respond. 



Mr. Grace. Mr. DeFazio, I don't think we'd addressed that clear- 

 ly. We hadn't had the experience to do that. I'll defer to Mr. Dun- 

 can. We have since looked at the Act and said we can do this. I 

 don't think at the time we even really as a group looked at it and 

 asked. Can we take in this information and maintain the confiden- 

 tiality. 



