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Title: May acid rain legislation excuse performance obligations under coal contracts

Journal Article · · Energy Law Journal; (United States)
OSTI ID:5614443
 [1]
  1. Akin, Gump, Strauss, Hauer Feld, Washington, DC (United States)

The Clean Air Act Amendments of1990 (CAAA) require 111 electric utility plants to reduce significantly their emissions of sulfur dioxide and nitrogen oxides by January 1, 1995. Further reductions of these emissions by all electric utilities will be required prior to January 1, 2000. Many electric utilities find themselves unable to utilize coal purchased under long-term contracts before the enactment of the CAAA unless they make significant and costly modifications to their generating facilities and/or purchase sulfur dioxide allowances. The act of installing new equipment to meet the requirements may cause a utility to be unable to meet its annual purchase agreements. The purpose of this article is to review the extent to which the acid rain provisions of the Clean Air Act Amendments of 1990 may give rise to a claim of force majeure, commercial impracticability or frustration of purpose. An extensive body of case law exists concerning the applicability of the doctrine of force majeure, commercial impracticability, and frustration of purpose to governmental actions affecting a buyer's ability to take a commodity purchased under a long-term contract. This case law should provide guidance to the analysis and resolution of claims asserted by electric utilities as a result of their inability, due to compliance with the CAAA, to take coal under long-term contracts.

OSTI ID:
5614443
Journal Information:
Energy Law Journal; (United States), Vol. 14:2; ISSN 0270-9163
Country of Publication:
United States
Language:
English