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Clear Skies

Clear Skies in Kentucky

Information provided for informational purposes onlyNote: EPA no longer updates this information, but it may be useful as a reference or resource.
Unless otherwise noted, the data presented throughout this Web site reflect EPA’s 2003 modeling and analysis of the Clear Skies Act of 2003. Clear Skies legislation was intended to create a mandatory program that would dramatically reduce power plant emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury by setting a national cap on each pollutant. The Clear Skies bill was proposed in response to a growing need for an emission reduction plan that will protect human health and the environment while providing regulatory certainty to the industry. The proposed legislation for air regulation never moved out of the Senate Environment and Public Works committee in 2005 and was therefore never enacted.
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Highlights of Clear Skies in Kentucky

Kentucky
  • Kentucky sources would reduce emissions of SO2 by 51%, NOx by 74%, and mercury by 68% by 2020 due to Clear Skies.
  • By 2020, Kentucky would receive approximately $3.6 billion in annual health benefits from Clear Skies (an alternative estimate projects $640 million in health benefits in Kentucky). This includes 500 fewer premature deaths (300 under the alternative estimate) and 900 fewer hospitalizations/emergency room visits for asthma.
  • In addition, Kentucky would receive environmental benefits including reductions in acid deposition that will benefit forests and streams in the Appalachian Mountains and visibility improvements.
  • Clear Skies does not significantly impact electricity prices. With or without Clear Skies, electricity prices in the electricity supply region that includes Kentucky are expected to remain below the national average.

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

Why Clear Skies?

  • Air quality has improved, but serious concerns persist
    • Kentucky 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
    • Kentucky 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 consumer

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

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

For a larger image, click here.

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.

Clear Skies Sets a Firm Timeline for Emission Reductions

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 Kentucky under Clear Skies

Emissions in Kentucky (2020) would be significantly reduced from 2000 levels:

  • 70% reduction in SO2 emissions
  • 78% reduction in NOx emissions
  • 76% reduction in mercury emissions

Some of these reductions will occur as a result of Kentucky’s state rule which was not included in EPA modeling because the rule was passed in March of 2003.

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

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

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

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

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 Kentucky

Improve Public Health

By 2020, Kentucky would receive approximately $3.6 billion 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 300 fewer premature deaths each year (see note 1)
    • approximately 300 fewer cases of chronic bronchitis each year
    • approximately 600 fewer non-fatal heart attacks each year
    • approximately 900 fewer hospital and emergency room visits each year
    • approximately 49,000 fewer days workers are out sick due to respiratory symptoms each year
    • approximately 6,400 fewer school absences 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 lakes and streams in Kentucky that are contaminated with mercury.

Counties Projected to Remain Out of Attainment with the PM2.5 and Ozone Standards in Kentucky

Counties Projected to Remain Out of Attainment with the PM2.5 and Ozone Standards in Kentucky

1: Based on 1999-2001 data of counties with monitors that have three years of complete data.

Note: The base case includes Title IV, the NOx SIP Call, the Tier II, Heavy-Duty Diesel, and Nonroad Diesel rules, final NSR settlements as of early spring 2003, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT or any other potential future regulations to implement the current ambient air quality standards or other parts of the Clean Air Act. Based on 1999-2001 data of counties with monitors that have three years of complete data.

Clear Skies would help Kentucky meet Air Quality Standards

  • Currently there are 9 counties exceeding the annual fine particle standards and 13 counties exceeding the 8-hour ozone standard.
    • All of these counties are expected to be brought into attainment with the fine particle standards under existing programs by 2020.
    • All of these counties are expected to be brought into attainment with the ozone standard under existing programs by 2010.

  • Clear Skies would significantly improve air quality in Kentucky further and more quickly than what is expected from existing programs.
    • By 2010, Clear Skies would bring the 2 remaining non-attainment counties (Jefferson and Fayette -- population approximately 1 million) into attainment with the annual fine particle standards.
  • In addition, Clear Skies would reduce ozone and fine particle concentrations in counties attaining the standards throughout the state.

Note: Based on 1999-2001 data of counties with monitors that have three years of complete data.

Clear Skies Environmental Benefits in Kentucky

In comparison to existing programs,

  • Visibility would improve perceptibly. The value of this benefit for Kentucky residents who visit America’s National Parks and Wilderness Areas is $43 million.
  • Sulfur deposition, a primary cause of acid rain, would decrease by 30-60% across the eastern half of Kentucky, speeding recovery of acid-sensitive Appalachian mountain streams.
  • Nitrogen deposition, another significant contributor to acid rain, as well as a cause of damage in nitrogen-sensitive forests, would decrease by up to 20%.
  • Mercury deposition would decrease by up to 15% in most of the state and by up to 60% in areas along the Ohio border.*

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

SO2 and NOx Emissions Reductions under Clear Skies

Projected Changes in Sulfur Deposition with the Base Case in 2020 Compared to 2001

Projected Changes in Sulfur Deposition with Clear Skies and the Base Case in 2020 Compared to 2001

Emissions in Kentucky and surrounding states would decrease considerably. These emission reductions would make it much easier for Kentucky to maintain compliance with the national air quality standards.

Projected SO2 Emissions from Power Plants with the Base Case and Clear Skies (2020) - South

Projected NOx Emissions from Power Plants with the Base Case and Clear Skies (2020) - South

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 in Kentucky under Clear Skies

Current and Projected Generation by Fuel Type in Kentucky under Clear Skies (GWh)
Current and Projected Generation by Fuel Type in Kentucky under Clear Skies (GWh)

Kentucky’s sources are projected to reduce their emissions through the installation of emission controls, rather than through a switch from coal to natural gas.

  • In 2010, 80% of Kentucky'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 89%.
  • No coal-fired units in Kentucky are projected to be removed from operation as a result of Clear Skies.

Kentucky’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 16% from 1999 to 2020

Current and Projected Coal Production for Electricity Generation

Emission Controls in Kentucky under Clear Skies

Under Clear Skies by 2020...

  • 21% of coal-fired capacity would install SCR or SNCR
  • 32% would install scrubbers

  • The major generation companies in Kentucky include:
    • Kentucky Utilities Company
    • Louisville Gas & Electric Co.
    • East Kentucky Power Cooperative
    • Tennessee Valley Authority
  • Total coal-fired capacity in Kentucky is projected to be 14,179 MW in 2010.

Units in Kentucky Projected to be Retrofitted due to Clear Skies by 2020

Plant Name

Unit ID

Technology

BIG SANDY BIG BSU1 Scrubber/ SCR
SANDY BSU2 Scrubber*
COLEMAN C1 Scrubber/ SCR
COLEMAN C2 Scrubber/ SCR
COLEMAN C3 Scrubber/ SCR
COOPER 2 Scrubber

E W BROWN

2

Scrubber/ SCR

E W BROWN 3 Scrubber/ SCR

GHENT

2

Scrubber

GHENT 3 Scrubber
GHENT 4 Scrubber
H L SPURLOCK 1 Scrubber
H L SPURLOCK 2 Scrubber*
CANE RUN 6 SCR*
E W BROWN 1 SCR
ELMER SMITH 2 SCR*
HMP&L STATION 2 H1 SCR*
MILL CREEK 1 SCR*
R D GREEN G1 SCR*
R D GREEN G2 SCR*
SHAWNEE 10 SCR
DALE 3 SNCR
DALE 4 SNCR

* Retrofit was installed under Clear Skies by 2010

Note: Retrofits and total coal-fired capacity apply to coal units greater than 25 MW.

Electricity Prices in Kentucky under Clear Skies

  • With or without Clear Skies, retail prices in the North American Electric Reliability Council (NERC) ECAR region (the electricity supply region that contains Kentucky) are projected to increase between 2005 and 2020.
  • With Clear Skies, retail prices are projected to be approximately 2.4 – 6.4% higher between 2005 and 2020 than in the absence of the legislation.
 


NERC

Projected Retail Electricity Prices in Kentucky under the Base Case and Clear Skies (2005-2020)/Projected National Retail Electricity Prices and Prices in Kentucky under Clear Skies (2005-2020)

In 2000, the average retail electricity price in Kentucky was approximately 4.1 cents/kWh, which was below 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 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 Kentucky under Clear Skies

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

Benefits Outweigh the Costs

  • In Kentucky, Clear Skies is projected to cost approximately $292 million annually by 2020 while providing health benefits totaling approximately $3.6 billion annually.
  • The increases in production costs under Clear Skies represent only a small percentage of total retail electricity sales revenue in Kentucky.
    • Retail electricity sales revenue in Kentucky was $3.2 billion in 2000.
    • Adjusting these sales revenues by the same growth rate used for the modeling of costs would result in revenues of over $4.9 billion annually in 2020.
  • Nationwide, the projected annual costs ofClear 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 alternative 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 Vermont, Massachusetts, Missouri, Vermont, 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 Non-Road Diesel rules.

Clear Skies


1. An alternative methodology for calculating health-related benefits projects approximately 300 premature deaths prevented and $640 million in health benefits each year in Kentucky by 2020.

State information based on EPA's modeling of the Clear Skies Act of 2002 is presented here for archival reasons.

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