Clear Skies

Clear Skies in Tennessee

Note: 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 Tennessee

Tennessee sources would reduce emissions of SO2 by 55%, NOx by 72%, and mercury by 49% by 2020 due to Clear Skies.
The health benefits in Tennessee would total $4.8 billion ($870 million under the alternative estimate) and include 600 fewer premature deaths (400 under the alternative estimate) and 1,200 fewer hospitalizations/emergency room visits for asthma.
In addition, Tennessee would receive environmental benefits including improved visibility and reduced sulfur deposition in the Great Smoky Mountain National Park region.
Clear Skies does not significantly impact electricity prices. With or without Clear Skies, electricity prices in the electricity supply region that includes Tennessee 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

Tennessee'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

Tennessee 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 Tennessee under Clear Skies

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

71% reduction in SO2 emissions
82% reduction in NOx emissions
59% reduction in mercury emissions

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

Emissions: Existing Clean Air Act Regulations (base case*) - Sulfur dioxide.

Emissions: Existing Clean Air Act Regulations (base case*) - Nitrogen oxides.

Emissions: Existing Clean Air Act Regulations (base case*) - 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 ambient air quality standards or other part 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.

SO2 and NOx Emissions Reductions under Clear Skies

Emissions in Tennessee and surrounding states would decrease considerably. These emission reductions would make it much easier for Tennessee to comply 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.

Clear Skies Health and Air Quality Benefits in Tennessee

Improve Public Health

By 2020, Tennessee would receive approximately $4.8 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 600 fewer premature deaths each year (see note 1)
approximately 400 fewer cases of chronic bronchitis each year
approximately 800 fewer nonfatal heart attacks each year
approximately 1,200 fewer hospital and emergency room visits each year
approximately 66,000 fewer days workers are out sick due to respiratory symptoms each year
approximately 900 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 Tennessee's lakes and streams.

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

Note: Based on 1999-2001 data of counties with monitors that have three years of complete data. 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 Tennessee Meet Air Quality Standards

Currently there are 7 counties exceeding the annual fine particle standards and 15 counties exceeding the 8-hour ozone standard.
- Several of these counties are expected to be brought into attainment with the fine particle standards under existing programs.
- All of these counties are expected to be brought into attainment with the ozone standard under existing programs.

Clear Skies would significantly improve air quality in Tennessee beyond what is expected from existing programs.

By 2010, Clear Skies would bring 3 of the remaining nonattainment counties (Sullivan, Roane, and Davidson -- population approximately 800,000) into attainment with the annual fine particle standards.
By 2020, Clear Skies would bring all remaining nonattainment counties (Knox and Hamilton counties -- population approximately 700,000) 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 Tennessee

Clear Skies Would Provide Substantial Environmental Benefits in Tennessee

In comparison to existing programs,

Visibility would improve perceptibly in the area around Great Smoky Mountain National Park, resulting in $1.9 billion in benefits under Clear Skies by 2020.
Sulfur deposition, a primary cause of acid rain, would decrease by up to 60% across the eastern half of the state, including Great Smoky Mountain National Park.
Nitrogen deposition, another significant contributor to acid rain as well as a cause of damage in nitrogen sensitive forests and coastal waters, would decrease by up to 20%.
Mercury deposition would decrease by 5-15% across much of the state, and by 15-30% in small areas.*

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

Note: Sulfur deposition in the West is generally low. The large percentage increases correspond to relatively small changes in actual deposition from expected increases in emissions primarily from sources not affected by Clear Skies (e.g., metals processing, petroleum refining, chemical and fertilizer manufacturing). A few power plants are expected to increase emissions slightly under existing programs.

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

Visibility Benefits in National Parks

Click here for a larger image

Airsheds for the Southern Blue Ridge Mountains

Projected SO2 Emissions from Existing Power Generation Sources in the Southern Blue Ridge Airshed in 2020

Projected NOx Emissions from Existing Power Generation Ssources in the Southern Blue Ridge Airshed in 2020

This section shows regional airshed maps that were developed for the Southern Blue Ridge Mountains (which includes Shenandoah National Park).
Multiple emission sources in numerous states contribute to air quality degradation and acid deposition in the Southern Blue Ridge region.
In 2020, emissions from power plants in the Southern Blue Ridge region are projected to be substantially lower with Clear Skies than under the Base Case:

SO2 emissions are projected to decrease 61%;
NOx emissions are projected to decrease 68%.

SOx and NOx Emissions in the Airsheds (2020)

Note: An "airshed" depicts a modeled approximation of a large proportion of sources contributing to air quality in a particular receptor region.

Electricity Generation in Tennessee under Clear Skies

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

Tennessee'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 6% from 1999 to 2020.

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

Tennessee'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, 66% of Tennessee'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 86%.
No coal-fired units in Tennessee are projected to be removed from operation as a result of Clear Skies.

Current and Projected Coal Production for Electricity Generation

Emission Controls in Tennessee under Clear Skies

Under Clear Skies by 2020:

18% of coal-fired capacity would install SCR
37% would install scrubbers

The major generation companies in Tennessee include:

Tennessee Valley Authority
Allegheny Energy

Total coal-fired capacity in Tennessee is projected to be 8,373 MW in 2010

Units in Tennessee Projected to Be Retrofitted Due to Clear Skies by 2020

Plant Name	Unit ID	Technology
ALLEN	1	Scrubber
ALLEN	2	Scrubber
ALLEN	3	Scrubber
GALLATIN	1	SCR/Scrubber
GALLATIN	2	SCR/Scrubber
GALLATIN	3	SCR/Scrubber
GALLATIN	4	SCR/Scrubber
KINGSTON	1	Scrubber
KINGSTON	2	Scrubber
KINGSTON	3	Scrubber
KINGSTON	4	Scrubber
KINGSTON	5	Scrubber
KINGSTON	6	Scrubber
KINGSTON	7	Scrubber
KINGSTON	8	Scrubber
KINGSTON	9	Scrubber
JOHNSONVILLE	10	SCR
JOHNSONVILLE	7	SCR
JOHNSONVILLE	8	SCR
JOHNSONVILLE	9	SCR

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

Electricity Prices in Tennessee under Clear Skies

With or without Clear Skies, retail prices in the North American Electric Reliability Council (NERC) SERC region (the electricity supply region that contains Tennessee) are projected to decrease between 2005 and 2020.

With Clear Skies, retail prices are projected to be approximately 0.7 - 2.8% higher between 2005 and 2020 than in the absence of the legislation.

NERC

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

Projected National Retail Electricity Prices and Prices in Tennessee under Clear Skies (2005-2020)

In 2000, the average retail electricity price in Tennessee was approximately 5.6 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 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 Tennessee 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 Tennessee, Clear Skies is projected to cost approximately $145 million annually by 2020 while providing health benefits totaling approximately $4.8 billion annually.
- The increases in production costs under Clear Skies represent only a small percentage of total retail electricity sales revenue in Tennessee.
  - Retail electricity sales revenue in Tennessee was over $5.4 billion in 2000.
  - Adjusting these sales revenues by the same growth rate used for the modeling of costs would result in revenues of over $8.3 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.

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:
- 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, Tennessee, 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.