Wednesday, February 5, 2020

Joint Conservation Committee: DEP- Coal Waste-Fired Power Plants Will Not Incur Significant Compliance Costs Under Draft RGGI Reg.

On February 3, DEP Secretary Patrick McDonnell told the Joint Legislative Air and Water Pollution Control and Conservation Committee coal waste-fired power plants will not incur significant compliance costs under DEP’s draft Regional Greenhouse Gas Initiative regulations.
The remarks were made at a Committee hearing on the impact a RGGI-type greenhouse gas cap-and trade program will have on coal waste-fired and co-generation power generators.
Secretary McDonnell said, “...[T]he Department has provided additional flexibility for co-generation plants that are interconnected with and supply power to manufacturing facilities. An example of a co-generation facility would be a Combined Heat and Power (CHP) plant that concurrently produces electricity and useful thermal energy. 
“DEP has proposed that co-generation plants that supply less than 15 percent of their annual total useful energy to any entity, not including the energy sent to the interconnected manufacturing facility, do not have compliance obligations. 
“Additionally, fossil fuel-fired power plants that have a capacity of 25 megawatts (MW) or greater and supply less than 10 percent of its annual gross generation to any entity also do not have compliance obligations.”
DEP has also provided a set-aside option to assist Pennsylvania’s waste coal generation with RGGI compliance and have carved out allowances for their use.
“In other words, waste coal facilities will not incur significant compliance costs as a result of Pennsylvania's participation in RGGI, as long as the emissions from the waste coal generation sector do not exceed the set-aside amount on an annual basis,” McDonnell explained.
“While RGGI participation will have tangible health, environmental and economic benefits; the inclusion of the waste coal set-aside has the additional benefit of avoiding unintended impacts to this sector, so that the environmental benefits of continuing to remediate Pennsylvania's legacy coal piles may continue,” said McDonnell.
Click Here for a copy of McDonnell’s testimony.
Gladys Brown Dutrieuille, Chairman of the Public Utility Commission, provided background on cogeneration in Pennsylvania and the actions the Commission has taken related to cogeneration.
She noted the U.S. DOE database includes combined heat and power generation at 166 end-user sites in Pennsylvania with 2,729 MW of capacity, which is roughly equivalent to the Peach Bottom Nuclear Power Plant.
In addition, there are 86 natural gas-fired reciprocating engine CHP sites ranging in size from 50 kWs to facilities as large as 10 MWs.
The Chairman noted the state’s Alternative Energy Portfolio Standards Program includes coal waste-fired power generation.
She said there are certain exemptions provided in the RGGI rule that should cover many coal waste and other CHP generation sites.
“The degree of cost for resources included in RGGI, on a per unit basis such as MWh, is a direct result of the carbon intensity of the resource and the RGGI carbon allowance cap,” said Chairman Brown Dutrieuille.  “Utilizing data from RGGI and the EPA shows that the increased cost of operations for CCGTs in Pennsylvania would have been approximately $2 to $3 per MWh in 2019.” 
“In comparison, the average locational marginal price in PJM during the first three quarters of 2018 and 2019 was $39.43 and $27.60 per MWh respectively,” she explained.  “At this time, the Commission is not able to comment on any ramifications increased costs may have on applicable cogeneration resources, we are only able to acknowledge their existence.”
Click Here for a copy of Chairman Brown Dutrieuille’s testimony.
Jaret Gibbons, Appalachian Region Independent Power Producers Association, outlined in detail the economic and environmental benefits of coal waste-fired generators in Pennsylvania.
“Today, there are only 10 plants operating in Pennsylvania with a net operating capacity of just under 1,200 megawatts,” said Gibbons.  “These plants continue to play a critical role in environmental remediation by removing abandoned coal refuse piles and cleaning-up the land and water polluted by the piles with minimal to no cost to the taxpayers.  [Coal waste-fired power plants are eligible for an annual, taxpayer funded $20 million tax credit program to help keep them stay in operation.]
“However, the number of tons of coal refuse remediated continues to decline due to economic hardships and plant closures,” said Gibbons.  “At historic operating levels, the industry would generally remove and consume 10-12 million tons of coal refuse annually, improving numerous waterways in the process. 
“However, plant closures and idling have led to an overall reduction in the volume of coal refuse consumed by plants. Thus, in recent years, plants have only consumed closer to 8 million tons of coal refuse annually,” explained Gibbons.  “While energy production has sadly plummeted in recent years due to market and regulatory changes, this reduction in activity results in corresponding reductions in economic and environmental benefits.”
Click Here for a copy of Gibbon’s testimony.
Vince Brisini, Olympus Power, LLC, provided an analysis of the impact of a RGGI-type cap-and-trade program on electric generation in Pennsylvania.
He said RGGI will not result in carbon dioxide emissions regulations that will affect local, regional or global climate; will only generate $175-$200 million per year in RGGI tax revenue for Pennsylvania; will result in the loss of 830 direct jobs and 8,000 indirect jobs in Western Pennsylvania; will result in the lost of $3.1 billion in annual economic benefits; and will result in the loss of annual local and state tax revenues and service fees of $52.3 million.
Click Here for a copy of Brisini’s testimony.
Heather Smiles, Fish and Boat Commission, provided an overview of the impact of coal waste on water quality in Pennsylvania.
For more information on RGGI, visit DEP’s Regional Greenhouse Gas Initiative webpage.  Click Here for a copy of DEP’s draft RGGI regulation.
Feb. 21 Follow-Up Hearing
The Joint Conservation Committee has scheduled a follow-up hearing on this same issue for February 21 at the Strand Theatre in McAdoo, Schuylkill County for 10:00 a.m.
Among those expected to testify is the PA Coalition for Abandoned Mine Reclamation.
Rep. Parke Wentling (R-Mercer) serves as Chair of the Joint Conservation Committee.
For more information, visit the Joint Conservation Committee website, call 717-787-7570, Like them on Facebook or Follow them on TwitterClick Here to sign up for regular updates from the Committee.
(Photo: Rep. Wentling.)
Related Article:
[Posted: February 5, 2020]   PA Environment Digest

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