Assessing the Effects of the “Clean Air” Legislation
Congress is considering legislation that would require significant reductions over a several-year period in the quantity of emissions that electric utilities will be allowed to discharge into the air. Electric utilities that generate their electricity by burning inexpensive, but relatively high-sulfur, coal will be most affected by this legislation. Some utilities plan to comply with this legislation by burning coal with a lower sulfur content. Other utilities plan to comply with this legislation by installing devices on power plant smokestacks that would filter emissions before it is discharged into the air.
Required:
1. In what places on the financial statements of coal-dependent electric utilities do you expect to observe the effects of this legislation?
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