Hot item: air credits.

Power plants crave certificates

Air pollution mitigation credits, which local air districts give to companies that cut emissions more than the law requires, have become a hot local commodity.

The would-be builders of three proposed power plants in the region want some so they can build their new plants. Manufacturers and local companies that want to grow are trying to buy credits too, so they can expand while complying with air emission guidelines.

The result: The demand for credits is bumping up hard against supply.

"It's never been this tight before," said Becky Wood, an environmental engineer for Teichert Inc., the concrete, paving and construction company in Sacramento. "There's a lot of competition around for credits right now. It's going to be a tough two or three years."

Air credits are a key to ensuring that the region's clean-air efforts stay on track. Sacramento has the nation's seventh-worst air pollution, and must show progress in reducing smog by 2002 or risk losing federal cash for local transportation projects.

The feds expect local smog levels to meet federal clean-air guidelines by 2005. But to do that, businesses that build new sources of smog-forming chemicals, like oxides of nitrogen (NOx), have to mitigate the new NOx they'll be creating, plus a little extra, to stay in line.

Air credits are handed out when pollution has been reduced.

There are only so many air credits to go around. Though they have been routinely bought and sold in the past, they're becoming scarce. Companies that want to expand but can't find any credits to buy have to cut pollution, which could be more expensive and ultimately discourage growth in the area.

When they are available, credits are costing $20,000 to $25,000 per ton of emissions reduced, up from $10,000 per ton a few years ago.

"It's not like real estate in the Bay Area -- yet," Wood said. "EBay for air credits? It's not so far-fetched."

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