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The Business of Clean Air: Clean Energy Opportunity in Pennsylvania’s Electric Power Sector

The Business of Clean Air: Clean Energy Opportunity in Pennsylvania’s Electric Power Sector. Conrad Schneider Advocacy Director Clean Air Task Force June 21, 2012. The state of Pennsylvania has the second highest electricity output of any state in the U.S., second only to Texas.

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The Business of Clean Air: Clean Energy Opportunity in Pennsylvania’s Electric Power Sector

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  1. The Business of Clean Air:Clean Energy Opportunity in Pennsylvania’s Electric Power Sector Conrad Schneider Advocacy Director Clean Air Task Force June 21, 2012

  2. The state of Pennsylvania has the second highest electricity output of any state in the U.S., second only to Texas. It also boasts some of the worst air pollution from power plants. But this can change.

  3. Nearly half of the 227 million megawatt-hours (MWh) generated by Pennsylvania's power plants in 2010 came from coal.

  4. The 18 gigawatts of coal-fired power plants are old – most of them over 40 years old. Many of these plants lack the state-of-the-art pollution control equipment that would help limit unhealthy air emissions.

  5. This is especially true for emissions of particulate matter...

  6. ...and for mercury.

  7. The public health results are significant. While Pennsylvania exports a lot of power to other states, much of its air pollution stays right at home. Pennsylvania is ranked #1 among all states for the health burdens imposed on its residents. Every year, an estimated 980 premature deaths, 1,016 hospital admissions, and 2,298 heart attacks result from power plant emissions. According to a recent study, emissions from one plant alone -- the Bruce Mansfield plant -- caused an estimated 57-110 premature deaths in 2011.

  8. The good news is that many electric power companies have already invested in reducing emissions. Most of Pennsylvania's coal plants now have scrubbers to reduce sulfur dioxide, for example.

  9. The Environmental Protection Agency has recently promulgated two rules for the electric power sector... ... the Mercury and Air Toxics Standard (MATS) ... and the Cross-State Air Pollution Rule (CSAPR)

  10. These rules require power plants to reduce mercury emissions by about 90% and reduce sulfur dioxide emissions by ~70%. Companies can comply with the rules by improving their pollution control equipment and making operational changes. These changes use proven technology and best practices to help reduce the harmful effects of gaseous and toxic releases from power plants.

  11. The investments required under the MATS rule are expected to prevent 210 premature deaths per year in Pennsylvania. By keeping sulfur dioxide out of the air, CSAPR is expected to prevent 450 premature deaths. So as you see, these rules have significant health benefits in store for Pennsylvania.

  12. Investments in air pollution controls and other clean power generation technology also present an economic opportunity for Pennsylvania. Approximately $4.7 billion will be invested in pollution control equipment by 2015 in Pennsylvania to meet the clean air standards set by CSAPR and MATS. This would directly and indirectly create over 33,800 jobs. Construction of new power plants to replace older, less efficient, and less economical ones could create an additional 25,400 jobs.

  13. Many companies in PA would benefit from this investment...

  14. They operate up and down the value chain...

  15. And they are located all across the state.

  16. As an example, Calgon Carbon, located in Pittsburgh, believes mercury removal regulations will drive market growth by up to 400% by 2015, and plans to build a new plant to meet this new demand. “The Company believes that mercury removal could become the largest U.S. market for activated carbon and has made great strides in establishing itself as a market leader. The Company currently estimates that annual, total demand for mercury removal in North America is 150 to 200 million pounds today and may grow to as much as 500 to 750 million pounds by 2015 … We believe our advanced products for mercury removal, some of which have carbon usage rates of 50% to 70% less than alternative products, are important to our ongoing success in this market. In anticipation of the eventual increase in activated carbon necessary to serve this market, we continue to develop our plans for the construction of a new virgin activated carbon plant in the U.S.” - CalgonCarbon Corporation 2011 10-K Report

  17. The EPA rules, CSAPR and MATS, are driving this investment and creating public health and economic dividends. Yet these rules are facing opposition from large emitters and some members of Congress. The Senate recently rejected one attempt to stall the MATS rule. Just yesterday, Senator Inhofe’s MATS CRA resolution failed, with thanks in part to Senator Casey who voted against the measure. This was a big step in the right direction. Other efforts to revise or repeal EPA rules are expected, and would also place Pennsylvania's future health and welfare in jeopardy.

  18. Additional opposition to the EPA rules has been based on concerns about reliability, but analysis suggests these concerns are unfounded. In their recent reliability assessment, the North American Electric Reliability Corporation (NERC) determined that the PJM Interconnection, home to 58 million electricity customers, is projected to have adequate generation capacity.

  19. “PJM is expected to meet its Reserve Margin requirements through the entire assessment period [to 2020]…No resource-related reliability concerns were identified.” This analysis takes into account 3,600 megawatts of generator retirements, and projects that 2,500 megawatts of wind, 306 megawatts of solar, and 69 megawatts of biomass, 393 megawatts of energy efficiency will be added in the region.

  20. Pennsylvania's electric sector is on its way to a cleaner future. Modernizing the state's power plants and incorporating complementary renewable resources will reduce emissions and... ...help reduce deaths and illness ...spark investment and create jobs ...increase fuel diversity ...lock in long-term economic benefits for Pennsylvania

  21. Support for EPA's air rules is an essential step forward.

  22. Sources • “New Jobs – Cleaner Air: Employment Effects Under Planned Changes to the EPA’s Air Pollution Rules,” Ceres and PERI, February 2011. www.ceres.org/resources/reports/new-jobs-cleaner-air/view • “New Jobs – Cleaner Air Part II: An investment in American Businesses and American Jobs," Ceres and ICAC, November 2011. www.ceres.org/resources/reports/new-jobs-cleaner-air-part-two/view • “2011 Long-Term Reliability Assessment,” North American Electric Reliability Corporation, November 2011. www.nerc.com/files/2011LTRA_Final.pdf • “Net Loss: Comparing the Cost of Pollution vs. the Value of Electricity from 51 Coal-Fired Plants,” Environmental Integrity Project, June 2012. www.environmentalintegrity.org/news_reports/documents/PowerPlantReport_2012.6.6.Final.pdf • “Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards,” EPA, December 2011. www.epa.gov/mats/pdfs/20111221MATSfinalRIA.pdf • U.S. Department of Energy, Energy Information Administration, Form 423. www.eia.gov/cneaf/electricity/page/eia423.html • U.S. Department of Energy, Energy Information Administration, Form 860. www.eia.gov/cneaf/electricity/page/eia860.html • U.S. Department of Energy, Energy Information Administration, Form 923.www.eia.gov/cneaf/electricity/page/eia906_920.html • U.S. Environmental Protection Agency, NEEDs database v. 4.10. www.epa.gov/airmarkt/progsregs/epa-ipm/docs/v410/NEEDSv410.zip • Additional information retrieved from company websites, press releases, and SEC filings.

  23. Thank You! Conrad Schneider Clean Air Task Force cschneider@catf.us www.catf.us

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