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National Coal Conference. April 23, 2013. Chairman Robert F. Powelson Pennsylvania Public Utility Commission. Created in 1937 5 commissioners 500 employees $65 million budget. PA Public Utility Commission. Regulates around 8 ,000 utilities in the following sectors:. Electricity
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National Coal Conference April 23, 2013 Chairman Robert F. Powelson Pennsylvania Public Utility Commission
Created in 1937 5 commissioners 500 employees $65 million budget PA Public Utility Commission • Regulates around 8,000 utilities in the following sectors: • Electricity • Natural Gas • Water • Telecommunications • Transportation
The New Energy Reality • World energy consumption predicted to grow by 53% from 2008 to 2035 • Fossil fuels will continue to supply much of the energy used worldwide • Renewableshare of total energy use is predicted to increase from 10%in 2008 to 14% in 2035 • There are 1.6 billion people without electricity worldwide Source: EIA’ s International Energy Outlook 2011
U.S. Electricity ConsumptionExpected to Grow 30% by 2035 KWH (Billions) Projected Source: Energy Information Administration
u.S. Coal production The U.S. holds the worlds largest estimated recoverable reserves of coal • In 2011, approximately • 72% of coal production • originated in 5 states: • PA • WY • WV • KY • TX
PENNSYLVANIA + Coal • PA is the 4th largest coal producing state in the U.S. • Coal production is vital to PA’s economy • In 2011, PA’s coal industry: • Contributed $3.2 billion in economic output • Supplied well-paying jobs for 41,500 Pennsylvania residents • Provided more than $750 million in federal, state, and local personal income and payroll tax revenue
Coal + Electricity • Over 90% of U.S. coal consumption is in the electric power sector • Coal-fired generation still holds the largest share among all sources of electricity • In March 2012, coal's share of total U.S. generation was 34% • However, coal’s use has declined since 2007 due to: • Slow growth in electricity demand • Strong price competition with natural gas • Increased used of renewables
2013 Pennsylvania Generation by Fuel Type Sources: U.S. Energy Information Administration
Coal and Rail • Coal is the most important commodity carried by America’s railroads • Coal accounts for 43 percent of all tonnage shipped • Coal generates over 24 percent of all gross rail revenues • The business of coal, rail, and power generation are inextricably linked • 70 percent of all call delivered to U.S. power plants is delivered by rail • Coal industry accounts for 1 in 5 railroad jobs
Future of coal Unknown impact of environmental regulations creates tremendous uncertainty for the coal industry.
Real world Examples PJM Plant Retirements: Almost 9,000 MW did not clear in PJM’s Capacity Auction for 2014-2015 Brandon Shores, Crane & Wagner Generating Stations: Scrubbed for billions, but sold for only $400 million FUTURE OF COAL Homer City Generating Station: Edison & GE Capital planning to invest $700 million in scrubbing this plant Dominion Resources Inc.: Completed construction of new coal plant in 2012. One of the last new coal plants?
Conclusion • With the rising demand for electricity, we need to rely on all sources of generation, from wind to coal • A diverse mix, or portfolio, approach is the answer • For coal plants to compete in the future, clean coal technology is a must • Coal will be a major player in the future of electric generation