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Clear Skies in Delaware

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Highlights of Clear Skies in Delaware

• Delaware sources would reduce emissions of SO2 by 36%, NOx by 27%, and mercury by 54% by 2020 due to Clear Skies.
  
• The health benefits in Delaware would total $420 million ($81 million under the alternative estimate) and include 70 fewer premature deaths (40 under the alternative estimate).
  
• In addition, Delaware would receive environmental benefits including reductions in acid, mercury and nitrogen deposition, and visibility improvements valued at $390 million for Delaware residents who visit National Parks nation wide.
  
• Clear Skies does not significantly impact electricity prices. With or without Clear Skies, electricity prices in the electricity supply region that includes Delaware are expected to remain near 2000 prices.
  

Clear Skies: An Innovative Approach to Improving Human Health and the Environment

Why Clear Skies?

• Air quality has improved, but serious concerns persist
  • Delaware's citizens suffer ill effects from air pollution, including asthma attacks and premature death
• Electricity generation sector remains a major emissions source
  • Very cost-effective to control the power sector, relative to other sources
  • Sources are concerned about upcoming complex and burdensome regulations

Advantages of the Clear Skies Approach

• Guarantees significant nationwide emissions reductions - beginning years before full implementation
• Delaware sources would substantially reduce emissions of SO2, NOx, and mercury
• Delivers dramatic progress towards achievement of critical health and environmental goals
• Uses proven, market-based flexible approach with incentives for innovation
  • Recognizes environmental needs as well as industry constraints, allowing industry to better manage its operations and finances while lowering risks to the public
  • Sources are projected to install pollution controls to enable continued reliance on coal
• Increases certainty across the board for industry, regulators, and consumers

Under Current Clean Air Act Power Plants Would Face a Complex Set of Requirements

For a larger image, click here.

Clear Skies Sets a Firm Timeline for Emission Reductions

The existing Title IV SO2 cap-and-trade program provides an incentive and a mechanism to begin reductions upon enactment of Clear Skies years before regulatory action under the current Act.

2004: The NOx SIP call (summertime NOx cap in 19 Eastern States + D.C.)

2008: Clear Skies NOx Phase I (2.1 million ton annual cap assigned to two Zones with trading programs)

2010:

• Clear Skies Hg Phase I (26 ton annual cap with a national trading program)
• SO2 Phase I (4.5 million ton annual cap with a national trading program)

2018:

• Clear Skies NOx Phase II (1.7 million ton annual cap assigned to two Zones with trading programs)
• Clear Skies Hg Phase II (15 ton annual cap with a national trading program)
• Clear Skies SO2 Phase II (3.0 million ton annual cap with a national trading program)

Emissions in Delaware under Clear Skies

Emissions in Delaware (2020) would be reduced from 2000 levels: 19% reduction in SO2 emissions 18% reduction in NOx emissions 7% reduction in mercury emissions

Emissions: Current (2000) and Existing Clean Air Act Regulations (base case*) vs. Clear Skies in Delaware in 2010 and 2020

Note: The base case using IPM includes Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT in 2007 or any other potential future regulations to implement the current air quality standards or other parts of the Clean Air Act. Base case emissions in 2020 will likely be lower due to state and federal regulatory actions that have not yet been promulgated.

Clear Skies Health Benefits in Delaware

By 2020, Delaware would receive approximately $420 million in annual health benefits from reductions in fine particle and ozone concentrations alone due to Clear Skies. (see note 1)

• Reduced ozone and fine particle exposure by 2020 would result in public health benefits of:
  • approximately 70 fewer premature deaths each year (see note 1)
  • approximately 100 fewer non-fatal heart attacks each year
  • approximately 8,100 fewer days workers are out sick due to respiratory symptoms each year

• Reduced mercury emissions would reduce exposure to mercury through consumption of contaminated fish, resulting in additional, unquantified benefits for those who eat fish from Delaware's lakes and streams

Clear Skies Environmental Benefits in Delaware

In comparison to existing programs,

• Visibility would improve perceptibly in Delaware.
  • The value of improved visibility for Delaware residents who visit National Parks and Wilderness areas throughout the country would be $390 million annually by 2020.
• Sulfur deposition, a primary cause of acid rain, would decrease by 30-60%.
• Nitrogen deposition to the Chesapeake Bay watershed would be reduced by up to 20% beyond what is expected under the Base Case.
• Chesapeake Bay States, including NY, VA, MD, PA, DE, WV and DC, recently agreed to incorporate the nitrogen reductions resulting from Clear Skies legislation as part of their overall plan to reduce nutrient loading to the Bay.
• Mercury deposition would decrease by 5-15% across much of the state and up to 30% in some areas.*

* These results are based on modeling the Clear Skies mercury cap without triggering the safety valve.

SO2 and NOx Emissions Reductions under Clear Skies

Emissions in states surrounding Delaware would decrease considerably. These emission reductions would make it much easier for Delaware to comply with the national air quality standards.

Note: The base case in IPM includes Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT in 2007 or any other potential future regulations to implement the current ambient air quality standards or other parts of the Clean Air Act. Base case emissions in 2020 will likely be lower due to state and federal regulatory actions that have not yet been promulgated. Emissions projected for new units in 2020 are not reflected

Electricity Generation and Pollution Controls in Delaware under Clear Skies

Delaware's electricity growth is projected to be met by increases in gas-fired and coal-fired generation. Clear Skies does not significantly alter this projection. Electricity from coal-fired generation will increase by 107% from 1999 to 2020.

Delaware's sources are projected to reduce their emissions through the use of existing pollution controls, rather than through a switch from coal to natural gas. In 2010, 82% of Delaware's coal-fired generation is projected to come from units with advanced SO2 and/or NOx control equipment that also substantially reduce mercury emissions; in 2020, the percentage is projected to increase to 83%. No pollution controls are projected to be installed in Delaware under Clear Skies. No coal-fired units in Delaware are projected to be removed from operation as a result of Clear Skies.

The major generation companies in Delaware include: Conectiv Corporation City of Dover Total coal-fired capacity in Delaware is projected to be 994 MW in 2010.

Electricity Prices in Delaware under Clear Skies

With or without Clear Skies, retail prices in the North American Electric Reliability Council (NERC) MAAC region (the electricity supply region that contains Delaware) are projected to increase between 2005 and 2020. With Clear Skies, retail prices are projected to be approximately 2.1 - 4.2% higher between 2005 and 2020 than in the absence of the legislation.

In 2000, the average retail electricity price in Delaware was approximately 11.2 cents/kWh, which was above the average national retail price of approximately 6.7 cents/kWh.

Note: The base case using IPM includes Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT in 2007 or any other potential future regulations to implement the current ambient air quality standards or other parts of the Clean Air Act. Base case emissions in 2020 will likely be lower due to state and federal regulatory actions that have not yet been promulgated.

Costs and Benefits in Delaware under Clear Skies

Benefits Outweigh the Costs

Clear Skies.... Guarantees significant emissions reductions - beginning years before full implementation Uses a proven and flexible market-based approach with incentives for innovation Increases certainty across the board for industry, regulators, and consumers

• In Delaware, Clear Skies is projected to cost approximately $22 million annually by 2020 while providing health and visibility benefits totaling approximately $540 million annually.
• The increases in production costs under Clear Skies represent only a small percentage of total retail electricity sales revenue in Delaware.
  • Retail electricity sales revenue in Delaware was almost $0.8 billion in 2000.
  • Adjusting these sales revenues by the same growth rate used for the modeling of costs would result in revenues of almost $1.2 billion annually in 2020.
• Nationwide, the projected annual costs of Clear Skies (in $1999) are $4.3 billion in 2010 and $6.3 billion in 2020; the nationwide benefits of Clear Skies are expected to be over $113 billion annually by 2020.
  • An alternate estimate projects annual health benefits totaling $23 billion.

Note: Costs include capital costs, fuel, and other operation and maintenance costs (both fixed and variable) associated with the achievement of the emissions caps in the legislation (for example, the installation and operation of pollution controls). These state-level production costs are estimates; they do not account for the costs associated with the transfer of electricity across regions, nor the costs or savings that could be associated with allowance movement between sources.

Notes on EPA's Analysis

• The information presented in this analysis reflects EPA's modeling of the Clear Skies Act of 2003.
  • EPA has updated this information to reflect modifications:
    • Changes included in the Clear Skies Act of 2003.
    • Revisions to the Base Case to reflect newly promulgated rules at the state and federal level since the initial analysis was undertaken.
  • The Clear Skies modeling results presented include the safety valve feature
• This analysis compares new programs to a Base Case (Existing Control Programs), which is typical when calculating costs and benefits of Agency rulemakings.
• The Base Case reflects implementation of current control programs only:
  • Does not include yet-to-be developed regulations such as those to implement the National Ambient Air Quality Standards.
• The EPA Base Case for power sector modeling includes:
  • Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in Connecticut, Massachusetts, Missouri, New Hampshire, North Carolina, Texas, and Wisconsin finalized before March 2003.
• For air quality modeling, the Base Case also includes federal and state control programs, as well as the Tier II, Heavy Duty Diesel, and Nonroad Diesel rules.





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1. An alternative methodology for calculating health-related benefits projects approximately 500 premature deaths prevented and $1.2 billion in health benefits each year in Delaware by 2020.

State information based on EPA's modeling of the Clear Skies Act of 2002 is presented here for archival reasons. Clear Skies in Delaware 2002 (PDF 344KB)






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