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Multi-Emissions Legislation

Multi-Emissions Legislation. 2002 Power Generation Conference Electric Power Generation Association Mark Carney Vice President, Environmental Affairs. PG&E National Energy Group. People and Technology Working Together.

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Multi-Emissions Legislation

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  1. Multi-Emissions Legislation 2002 Power Generation Conference Electric Power Generation Association Mark Carney Vice President, Environmental Affairs

  2. PG&E National Energy Group People and Technology Working Together With regional offices from coast to coast, PG&E National Energy Group is one of the nation’s leading competitive power producers, with natural gas facilities that connect major producing regions to some of the fastest-growing markets in North America. It is one of the top energy trading businesses in the country.

  3. Outline “Technological Options and Industry’s Investment Decisions Depend on Policy Framework” • Current regulatory environment • Recommended policies more favorable to technology development • National Multi-Emissions Proposals • Achieving a smooth transition

  4. Today’s Reality • Clean Air Act Requirements • MACT (HAPs), NSR, Regional Haze, PM2.5, etc. • State Environmental Initiatives • MA, NY, CA, WI, CT, NJ, FL, NC… • Health Studies • Fine particulates, Combustion Emissions, Mercury, Ozone • Ecological Studies • Deposition, Visibility, Habitat Loss, Bioaccumulation, GHG Impacts

  5. State Policies • CT Regulation/Legislation (2003): • 3 lb/MWh SO2 and 1.5 lb/MWh NOX • MA Regulation (2004-2008): • 3 lb/MWh SO2,1.5 lb/MWh NOX,1,800 lb/MWh CO2 • Hg requirements to be proposed in 2003 • NH Legislation (2006-2010): • 3 lb/MWh SO2,1.5 lb/MWh NOX,7% below 1990 levels CO2 • Hg limits to be set after EPA adopts Hg MACT • NC Legislation (2009-2013): • 49% reduction in SO2 by 2009 and 74% by 2013 • 78% reduction in NOX by 2009

  6. Impact of Current Policies • Uncoordinated regulations • Impede optimal compliance decisions • Short regulatory deadlines • Do not provide adequate time for innovative solutions • Command-and-control approaches • Do not encourage innovation • Industry needs clear signals for future technology demands • Future programs should encourage competition among multiple technology / compliance options

  7. Recommended Policy Integrated Federal Solution for Power Sector: Enact Multi-Emissions Legislation • Promote market based mechanisms • Establish national targets for multiple emissions • Set timelines for reductions • Provide certainty about future regulations • Modify New Source Review to expedite emission reductions • Promote clean energy sources • Encourage energy efficiency improvements

  8. Clean Energy Group

  9. Clean Energy Group Principles • National cap-and-trade program for all emissions • Specific to power generators • Reasonable levels and timelines • Output-based allowance allocations • Flexible CO2 Provisions • Investment credits • Clear incentive for renewable and efficiency projects • CO2 allowances awarded for $ invested • Credit for early action • International emissions trading • CO2 offsets valid for compliance

  10. National Multi-Emissions Proposals

  11. Why Include CO2 with Flexibility? • Regulatory Certainty • Piecemeal state and regional initiatives are already underway for GHGs • Business Certainty • Integrated multi-emissions program allows long term planning • Baseline Certainty • Legislative approach allows for certainty in GHG investments • Allows for smooth transition • Promotes next generation technologies • Enables GHG mitigation through cost-effective, off-system reductions • Provides time for gradual transition - strategic advantages to starting now

  12. The “Smooth” Transition • Start Now with national program that provides maximum flexibility • Integrate with existing Clean Air Act requirements • Send clear price signals for all emissions • Current investment decisions should incorporate costs for all emissions • Provide value for low emissions and low carbon intensity: incentive for commercializing new technologies • Provide the bridge • Trading and banking flexibility for all emissions • Transition from current infrastructure to next generation of technologies by using CO2 offsets • Maintain fuel diversity during the transition

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