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Clear Skies in Maryland

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Highlights of Clear Skies in Maryland

• Maryland sources would reduce emissions of SO2 by 90%, NOx by 70%, and mercury by 69% by 2020 due to Clear Skies.
  
• The health benefits in Maryland would total $3.9 billion ($730 million under an alternative estimate) and include 500 fewer premature deaths (300 under an alternative estimate) and 1,000 fewer hospitalizations/emergency room visits for asthma.
  
• In addition, Maryland would receive significant environmental benefits, including reductions in nitrogen deposition that would benefit the Chesapeake Bay.
• Clear Skies does not significantly impact electricity prices. With or without Clear Skies, electricity prices in the electricity supply region that includes Maryland are expected to increase.
  

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

Why Clear Skies?

• Air quality has improved, but serious concerns persist
  • Maryland’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
  • Maryland 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

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 Maryland under Clear Skies

Emissions in Maryland (2020) would be significantly reduced from 2000 levels: 91% reduction in SO2 emissions 77% reduction in NOx emissions 71% reduction in mercury emissions

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

Emission Reductions under Clear Skies

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

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. Emissions projected for new units in 2020 are not reflected.

Clear Skies Health Benefits in Maryland

Improve Public Health

By 2020, Maryland would receive approximately $3.9 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 500 fewer premature deaths each year (see note 1)
  • approximately 300 fewer cases of chronic bronchitis each year
  • approximately 700 fewer non-fatal heart attacks each year
  • approximately 1,000 fewer hospital and emergency room visits each year
  • approximately 63,000 fewer days workers are out sick due to respiratory symptoms each year
  • approximately 4,100 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 Maryland’s lakes and streams.
  

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

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.

Clear Skies Would Help Maryland Meet Air Quality Standards

• Currently there is 1 county (Baltimore County) exceeding the annual fine particle standard and 12 counties exceeding the 8-hour ozone standard.
  • Most of these counties are expected to be brought into attainment under existing programs
    
• Clear Skies would significantly improve air quality in Maryland further and more quickly than what is expected from existing programs, bringing all remaining non-attainment counties into attainment with both standards by 2020.
  • By 2010, Clear Skies would bring Baltimore County (population approximately 750,000) into attainment with the annual fine particle standard.
  • By 2020, Clear Skies would bring Harford County in Maryland (population 220 thousand) into attainment with the 8-hour ozone standard.
  • In addition, Clear Skies would reduce ozone an fine particle concentrations in counties 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 Maryland

Clear Skies Would Provide Substantial Environmental Benefits in Maryland

In comparison to existing programs,

• Visibility would improve perceptibly in Maryland.
  • The value of improved visibility for Maryland residents who visit National Parks and Wilderness areas throughout the country would be $93 million each year by 2020.
• Sulfur deposition, a primary cause of acid rain, would decrease by 30-60%.
• Oxidized nitrogen deposition to the Chesapeake Bay
  watershed would be reduced by up to 20%.
  
  • 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 loadings to the Bay.
• Mercury deposition would decrease by 5-15% across much of the state and up to 60% in some areas.

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

Electricity Generation in Maryland under Clear Skies

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

Maryland'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 18% from 1999 to 2020.

Maryland'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, 82% of Maryland'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 94%.

Emission Controls in Maryland under Clear Skies

Under Clear Skies by 2020... 14% of coal-fired capacity would install SCRs 67% would install scrubbers The major generation companies in Maryland include: Constellation Mirant Allegheny Power Total coal-fired capacity in Maryland is projected to be 4,740 MW in 2010.

Units in Maryland Projected to Be Retrofitted Due to Clear Skies by 2020 Plant Name Unit ID Technology C P CRANE 1 Scrubber C P CRANE 2 Scrubber CHALK POINT 1 Scrubber* CHALK POINT 2 Scrubber* DICKERSON 1 Scrubber/SCR DICKERSON 2 Scrubber/SCR DICKERSON 3 Scrubber/SCR HERBERT A WAGNER 2 Scrubber/SCR HERBERT A WAGNER 3 Scrubber* MORGANTOWN 1 Scrubber* MORGANTOWN 2 Scrubber*

Notes: 1. Retrofits and total coal-fired capacity apply to coal units greater than 25 MW. 2. RP Smith unit 9 is projected to be removed from operation by 2005 with Clear Skies due to excess gas-fired capacity in the marketplace, unless otherwise needed for voltage purposes. The recent overbuild of gas-fired generation reduces the need for less efficient units operating at lower capacity factors. These units are inefficient compared to other coal-fired plants and newer gas-fired generation. Less conservative assumptions regarding natural gas prices or electricity demand would create a greater incentive to keep these units operational. Electricity Prices in Maryland 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 Maryland) 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 Maryland was approximately 6.7 cents/kWh, which was the same as 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 Maryland 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 Cost In Maryland, Clear Skies is projected to cost approximately $305 million annually by 2020 while providing health benefits totaling approximately $3.9 billion annually. The increases in production costs under Clear Skies represent only a small percentage of total retail electricity sales revenue in Maryland. Retail electricity sales revenue in Maryland was almost $4.1 billion in 2000. Adjusting these sales revenues by the same growth rate used for the modeling of costs would result in revenues of over $6.3 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. 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. State information based on EPA's modeling of the Clear Skies Act of 2002 is presented here for archival reasons. Clear Skies in Maryland 2002 (PDF 337KB) 1. Retrofits and total coal-fired capacity apply to coal units greater than 25 MW. 2. RP Smith unit 9 is projected to be removed from operation by 2005 with Clear Skies due to excess gas- fired capacity in the marketplace, unless otherwise needed for voltage purposes. The recent overbuild of gas- fired generation reduces the need for less efficient units operating at lower capacity factors. These units are inefficient compared to other coal- fired plants and newer gas- fired generation. Less conservative assumptions regarding natural gas prices or electricity demand would create a greater incentive to keep these units operational. top

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