Electricity prices in Pennsylvania could increase significantly if the Environmental Protection Agency (EPA) enacts a Clean Air Interstate Rule. Hearings on the measure took place in September and even sparked protests. The measure requires 31 states, from Massachusetts to Texas, to substantially reduce emissions from power plants. Specifically, the rule calls for a 71% reduction in sulfur dioxide emissions and a 52% decrease in nitrogen oxide emissions (based on 2005 emission levels) by 2014.
This provision would have a significant effect on Pennsylvania electricity rates as coal, the main emitter of sulfur dioxide and nitrogen dioxide, also provides over half of the state?s electricity. The main concern of the coal industry is the unpredictability of the regulations, which forces coal companies to predict future emission standards. In other words, the pollution reduction technology is so expensive that coal companies cannot afford to continually install new scrubbers or easily make upgrades if emission standards are constantly upgraded.
The new regulations are expected to cost plants in Pennsylvania a total of $2.8 billion dollars, an insurmountable amount for some of the state’s oldest plants. And companies contend the actual cost of regulations will be much higher. It?s likely the coal industry will be forced to close many noncompliant coal-fired generation plants, restricting the supply of electricity.
Doug Biden, President of the Electric Power Generation Association, has noted about 65% of Pennsylvania’s coal-fired electricity capacity already meets or exceeds the proposed standards set forth by the EPA; however, older and smaller plants do not.
The electricity power plants are already working to cut emissions. For example, PPL recently spent $1.4 billion for pollution controls on its 1961 plant in York County and the Montour plant built in 1972. Sulfur dioxide emissions at Montour fell 88% – from 128,000 tons in 2007 to 15,000 tons in 2009. Overall, the coal industry has been able to decrease pollution while increasing production. From 1970 to 2007, coal use increased by 225%, while emissions dropped by more than 70%. But change isn?t coming fast enough for the EPA.
Forcing large emission reductions in a short time span will not only result in higher electricity prices, but could cost jobs as plants close. Jeff Holmstead, a former EPA official who authored the original interstate rule, said it was not clear whether utilities will be able meet the new standards while still providing affordable and reliable electric power.
However, the worries for coal will not be ending anytime soon. Regulations limiting interstate transport, reclassifying, ozone pollution, and new emission levels of toxins are all coming down the pipeline. And talk of classifying coal ash as a hazardous waste could add tremendous cost to coal-generated electricity. Together with the natural gas boom there are a lot of unknowns in the supply side of the Pennsylvania electricity market. All the more reasons to stay informed and always on the look out for the best electricity generation rates.
