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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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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?

To determine

(a)

Clean act: the Act characterizes an "electric utility steam-generating unit" as "any fossil-fuel− terminated burning unit of in excess of 25 megawatts electric that serves a generator that produces electricity available to be purchased." A unit that cogenerates steam and electricity and supplies more than 33% of its potential electric yield limit and more than 25 yield to any utility power appropriation framework available to be purchased is additionally viewed as an electric utility steam-generating unit.

To discuss:

In what places on the financial statements of coal-dependent electric utilities do you expect to observe the effects of this legislation?

Explanation

The second report to Congress on the environmental statement of toxins to the Great Waters was finished in June 1997. The report affirmed, and gave extra help to, the discoveries of the first Report to Congress that relentless and bio collective poisonous contaminations and over the top nitrogen can antagonistically influence the ecological state of the Great Waters. Electric utilities and versatile sources are recognized, in emonstrating studies and emanation information, as significant supporters of NO to the Chesapeake Bay and its watershed...

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