Acid Rain Abatement Act of 1988

Acid Rain Abatement Act of 1988 - Amends the Clean Air Act to phase-in, by 2004, a nationwide reduction in annual emissions of sulfur dioxide of 10,000,000 tons and a nationwide reduction in annual emissions of nitrogen oxides of 3,000,000 tons measured from 1980 emissions. Directs the Administrator of the Environmental Protection Agency to allocate such reductions among States on the basis of each State's share of excess sulfur dioxide and nitrogen oxide emissions from fossil fuel fired steam generating units.

Requires States to submit for the Administrator's approval State implementation plans establishing emissions limitations, compliance schedules, and other enforceable measures necessary for achieving required emission reductions. Provides for the coordination of State plans with respect to electric utilities which serve rate payers in more than one State. Requires State plans to require fossil fuel fired electric utility steam generating units to install and operate continuous emission monitoring for sulfur dioxide and nitrogen oxides.

Directs the Administrator to impose a noncompliance penalty against the owner or operator of a stationary source, based on the number of pounds of excess emissions from such source, if the State in which such source is located fails to: (1) submit an implementation plan to the Administrator which is approved; or (2) enforce any requirement of its approved plan against such source.

Allows State plans to provide for trading of emission reduction requirements: (1) among major stationary sources within a State; (2) among electric utilities in more than one State which participates in the same power pool; and (3) among stationary sources owned or operated by a single electric utility operating in more than one State.

Authorizes a State to extend for up to two years the date by which a stationary source which utilizes clean coal technology must meet emission reduction requirements for sulfur dioxide and nitrogen oxides. Excuses State failures to meet emission reduction requirements when such failures are solely attributable to such extensions.

Prohibits the early termination of any fossil fuel supply contract by reason of changed circumstances wrought by this Act or State implementation plans.

Directs the Secretary of Energy and the Administrator to enter into agreements with, or provide grants to, owners or operators of major sources of air emissions to test the effectiveness and feasibility of clean coal technologies. Requires that such demonstration projects utilize technology which would be appropriate for retrofit on a significant number of existing coal-fired emission sources and be no more costly in reducing emissions of sulfur dioxide and nitrogen oxides than conventional technology. Limits Federal funding to 20 percent of project costs. Exempts projects which receive assistance for the implementation of clean coal technologies from the Clean Air Act's new source performance standards.

Authorizes appropriations for FY 1989 through 1992.

Directs the Administrator to revise the performance standards for sulfur dioxide and nitrogen oxides from fossil fuel fired electric utility steam generating units which commence construction or modification after 1996 so that such standards reflect emission reduction improvements.