ARIPPA, EPCAMR Urge Senate To Continue Waste Coal Power Plant Tax Credits

ARRIPA, the Anthracite Region Independent Power Producers Association, Tuesday urged the Senate Environmental Resources and Energy Committee to preserve a recently adopted tax credit measure that is set to increase from $7.5 million to $10 million per year in 2017 and to explore other opportunities for economic support and regulatory relief that would help to keep the plants operating.

Robert Hughes, Executive Director, Eastern PA Coalition for Abandoned Mine Reclamation, also presented comments to the Committee supporting the tax credit program.

The FY 2016-17 state budget included a new $7.5 million Coal Refuse Energy and Reclamation Tax Credit Program promoted by Sen. John Yudichak (D-Luzerne), Minority Chair of the Committee.
Click Here to watch a video of the hearing.

Coal Waste Power Plants

In the last 20 years, Pennsylvania’s 14 coal-refuse generating plants have removed 200 million tons of environmentally damaging coal refuse scattered throughout the coal regions of the state, improved or restored more than 1,200 miles of polluted streams and reclaimed more than 7,000 acres of abandoned land into productive uses.

With at least 300 million tons of coal refuse remaining, the industry is in danger of having to shutter these plants, leaving behind the coal piles, either to become a taxpayer clean up liability or a continuing source of acidic water and air pollution and a health and safety threat.
The reasons for this distress are largely economic.  

A sluggish economy has reduced the demand for electricity, while a dislocated natural gas market in Pennsylvania featuring excessive supply and abnormally low prices have conspired with such reduced electricity demand to undercut the wholesale electricity pricing market and make it uneconomical to generate electricity with coal refuse.

“We’re asking the Commonwealth to be our partner in addressing an important environmental issue,” said George Ellis, Executive Director of ARIPPA.  “We’ve made steady progress over the last two decades in removing coal refuse and turning it into energy, along with beneficial ash that can be recycled and used to remediate mining sites and in products such as concrete and asphalt.  

“We generate electricity in order to pay for our environmental activities – the removal of abandoned coal refuse piles and the remediation and restoration of coal refuse affected sites.  If our industry does not survive, the cleanup becomes the responsibility of the Commonwealth and its taxpayers.

“The refuse to energy industry also plays a very important role in the economy of the Commonwealth,” said Ellis  Our facilities support family-sustaining jobs that pay an average of $70,000 per year.  When operating at peak capacity, the industry generates $740 million annually in economic benefits to Pennsylvania, concentrated mainly in rural areas.  

“A robust tax-credit program combined with other regulatory and economic support will enable these economic benefits along with the environmental remediation activities to continue.”

The Commonwealth provided this past June a tax credit of $4 for each ton of qualified coal refuse used to generate electricity, capped at $7.5 million in 2016. The cap is set to increase to $10 million in 2017 and beyond.

ARIPPA is urging the Commonwealth to let this process play out to ensure continued remediation of these coal refuse piles.

ARIPPA presented the Senate Committee with an economic and environmental analysis prepared by Econsult Solutions, of Philadelphia.  

The report said, at its peak, the industry removes and uses 10 million tons of coal refuse and reclaims and remediates 200 acres per year, improving numerous waterways and groundwater resources, the Commonwealth’s air, and the health and safety of its citizens in the process.

Starting at a baseline of zero today and supporting these activities moving forward would yield quantifiable environmental benefits of nearly $6 million in the first year alone and would total more than $520 million over the next 20 years.

Moreover, the industry is estimated to generate nearly $20 million in annual taxes and fees for the Commonwealth through sales, income and business taxes and environmental taxes and fees.

Coal refuse, also known as waste coal, boney, culm and gob, is a legacy of previous coal mining.  It consists of low-quality coal mixed with rock, shale, slate, clay and other material that was discarded as a “waste” during the original coal extraction operations and randomly disposed in piles near the mine sites or at transfer stations.

According to the Department of Environmental Protection, there are at least 840 such piles on nearly 10,000 acres of abandoned mine lands scattered throughout the commonwealth’s anthracite and bituminous coalfields.

These piles, which can spontaneously combust or catch fire from lightning strikes, and which also leach acid mine water and other hazardous substances, are major sources of polluted water and air and represent public health and safety hazards.

Based on DEP’s most recent inventory, the piles are estimated to contain at least 300 million tons of coal refuse.

The coal refuse energy facilities provide a unique environmental benefit by utilizing state-of-the-art “fluidized-bed combustion” technology to generate electricity from coal refuse.

The facilities are strategically located adjacent to the coal refuse piles, and with the exception of one plant – the Seward facility –  are relatively small in size, with heat input rates as low as 30 megawatts, and averaging between 80 to 85 megawatts of generating capacity.

Nevertheless, the plants collectively generate about 10 percent of the total electricity produced in the Pennsylvania/West Virginia region.

In 2010, Pennsylvania’s 14 coal refuse plants generated 10.5 million megawatt-hours of energy and consumed 11.4 million tons of coal refuse.  Production declined slightly over a five-year period, but still averaged 9.3 million megawatt-hours of energy and 10.5 million tons of coal refuse from 2010 through 2014.

In 2015, energy production fell an estimated 27 percent from this five-year average, to 6.8 million megawatt-hours, and coal refuse consumption fell an estimated 22 percent, to 8.2 million tons.

Projections for this year show an even steeper annual decline, with energy production projected to decline 33 percent to 4.5 million megawatt-hours, and coal refuse consumption projected to decline 35 percent, to 5.3 million tons.  

The 2016 activity levels are anticipated to be approximately half of the annual averages observed from 2010 through 2014.

“These plants have saved the Commonwealth millions of dollars in cleanup costs, but the current economic conditions have caused a large drop in the cleanup efforts,” said Ellis.  “Maintaining the tax credit program at increasing levels as set forth in the 2016-17 budget, combined with other regulatory and economic support, will help us return to the level of activity of previous years, reducing pollution, restoring streams and reclaiming land for productive uses.”

Click Here for a copy of ARIPPA’s complete testimony.

EPCAMR Mine Reclamation

“To see the amount of material that has been excavated, backfilled, seeded, and mulched, on dozens of reclamation sites over the last two decades is simply amazing and truly a testament to the land reclamation efforts of the waste coal industry,” said Robert Hughes, Executive Director of EPCAMR. “Fuels managers, machine operators, plant operators, and heavy equipment operators and their fuel supply companies, like Northampton Fuel Supply, Inc., who just won the National Association of Abandoned Mine Lands Reclamation Award last week for the extensive land reclamation efforts that has had to occur on the “Loomis Bank Operation,” Hanover Township, Luzerne County, PA to backfill, regrade, create surface contours and conveyances to control stormwater, and to keep surface water from entering the underground abandoned mine pool in the lower Wyoming Valley that would have ultimately continued to contribute to the formation of abandoned mine drainage (AMD) that would have ended up discharging into the Nanticoke Creek Watershed, had they not reclaimed the site.

“What stands out the most is the lack of the mountainous black banks of waste coal, culm, slate rock, and burnt clinkers of coal that dominated the regional landscape historically,” explained Hughes.  “There is no longer the smell of burning mine fires with its sulfur gas dispersing into the air as prevalent as it was 20 years ago. The greening of the landscape and topography, along with the surface features that have been reclaimed now dominate hundreds of reclamation sites.

“Land reclamation has significantly reduced the environmental damage that had historically been a problem across the Coal Region,” said Hughes. The work of the waste coal industry has improved thousands of acres of trees, grasses, and wildflowers that have now been reestablished on sites with lush vegetative growth and ground cover that has reduced sediment and erosion into the local waterways.”

Click Here for a copy of EPCAMR complete testimony.

The hearing was held in the Carbon County Courthouse Annex Building in Jim Thorpe.

Visit the Senate Environmental Committee webpage for more information on the hearing. Click Here to watch a video of the hearing.

Sen. Gene Yaw (R-Lycoming) serves as Majority Chair of the Senate Environmental Committee and can be contacted by sending email to: gyaw@pasen.gov.   Sen. John Yudichak (D-Luzerne) serves as Minority Chair and can be contacted by sending email to: yudichak@pasenate.com.