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Public Service Commission
Cannon Building
861 Silver Lake Blvd., Suite 100
Dover, DE 19904

RE: 3008 Rules and Procedures to Implement the Renewable Energy Portfolio Standard (Opened August 23, 2005), PSC Docket 56, published March 1, 2017

Please accept these comments in the matter of the adoption of rules and procedures to implement the Renewable Energy Portfolio Standard Act, 26 DEL. C. §§ 351-363, as applied to Retail Electricity Suppliers.  We note this proposed regulation is appropriate in light of Superior Court ruling, C.A. N15A-12-002 AML, dated December 30, 2016, upholding the claim by the Delaware Public Advocate and the Caesar Rodney Institute the Public Service Commission (PSC) incorrectly delegated authority to write this regulation to the Division of Energy & Climate pursuant to the clear language in the Renewable Portfolio Standards Act, and remanding the issue to the PSC for proceedings in accordance with the Court’s decision.

We appreciate the care and thoughtful approach of the PSC Staff in drafting the regulation.  We especially support the affirmation legislative intent was to recognize there is unpriced value to the RPS by allowing a 3% electric rate premium, but did not require those externalities be calculated as an offset against the Cost Cap Calculation.  However, we do point out one issue requiring additional clarity.  We recommend the following additions (in Italics) to clarify the inclusion of REC and SREC Renewable Compliance Charges from Qualified Fuel Cell Providers.

3.2.21.1.1 The total cost of RECs retired to comply with the RPS, including that portion of the net Renewable Compliance Charge from Qualified Fuel Cell Providers used to meet REC requirements, plus       

3.2.21.1.3  The total cost of SRECs retired to comply with the RPS, including that portion of the net Renewable Compliance Charge from Qualified Fuel Cell Providers used to meet SREC requirements, plus           

3.2.21.3.2 The total cost of RECs retired to comply with the RPS, including that portion of the net Renewable Compliance Charge from Qualified Fuel Cell Providers used to meet REC requirements, plus

3.2.21.3.3 The total cost of SRECs retired to comply with the RPS, including that portion of the net Renewable Compliance Charge from Qualified Fuel Cell Providers used to meet SREC requirements, plus

3.2.21.4.2 The total cost of SRECs retired to comply with the RPS, including that portion of the net Renewable Compliance Charge from Qualified Fuel Cell Providers used to meet SREC requirements, plus

            While including the QFCP cost would seem to be self-evident, we note the Division of Energy & Climate has excluded these charges in past Cost Cap calculations.  The Division itself included the QFCP costs in the first three of four iterations of their proposed regulation “2102 Implementation of Renewable Energy Portfolio Standards Cost Cap Provisions”, now in the process of repeal.  The Division will be responsible for the actual calculation, and so needs a clear direction on including the QFCP charges.  We note the PSC regularly balances price, reliability, and environmental issues, while the Division of Energy & Climate is an advocate for renewable energy potentially biasing their regulatory process.  That is why writing the Cost Cap regulation was left to the PSC by the legislature.

The PSC should maintain consistency in its interpretation of the role of RECs from Qualified Fuel Cell Providers.  There are several precedents to consider.

  • The PSC approved the Fuel Cell Tariff in 2011. The Fuel Cell Act required the Commission to reject the tariff if the net levelized cost per month for the fuel cell project exceeded the net levelized cost of the highest current tariff, or the Bluewater Wind project.  The PSC Staff Consultant estimated the levelized cost of the Fuel Cell Tariff to be $1.34/month for the average residential customer compared to $2.27/month for Bluewater Wind.  Built into the assumptions was the Fuel Cell Act provision for energy production to offset the need for RECs and SRECs.  Without this offsetting value the cost of the Fuel Cell Project would have increased over $2.00 more a month, and would have exceeded the price cap requiring rejection of the Fuel Cell Tariff.  DNREC took this one step further and allowed each megawatt-hour of fuel cell generation to create two RECs, while an actual wind farm only creates one REC for each megawatt-hour of generation.  Clearly the REC value component influenced the PSC Tariff approval process.
  • The proposed regulation recognizes QFCP RECs in section 3.2.4 which spells out energy production from the QFCP can be used to fulfill the RPS requirements, and section 3.2.5 requires PJM-EIS GATS tracking similar to all other RECs and SRECs. The QFCP RECs are equivalent to any REC from any Eligible Energy Resource.
  • Every required annual report of RPS cost and the total Retail Cost of Electricity filed by Delmarva Power has included the QFCP cost without objection from the Division or the PSC Staff.
  • In PSC “Docket 13-250 Electric Bill Transparency”, the working group unanimously recommended, and the Commission ruled the Renewable Compliance Charge would be broken out on electric bills. It is now on each monthly bill and includes the QFCP REC cost.  How can the Commission explain to ratepayers any inconsistency of what they can see for themselves on an electric bill to what is used to determine whether the Cost Cap has been exceeded?
  • If the QFCP wasn’t supplying RECs, Delmarva would have had to purchase them under contract or on the spot market. We will shortly see the current contract cost for RECs when the Delmarva RFP solicitation for RECs is complete.  Clearly the QFCP RECs have a cost that adds to the Renewable Compliance Charge.  One could point out the QFCP RECs are expensive.  However, using information from the Delmarva 2014 IRP, page 73, Tables 8 and 9, we can calculate a forecasted cost for the current 2016 Compliance Year.  The costs are $68.14/REC from the QFCP, $33.73 /REC from three existing wind farm contracts, and $24.23/REC from the spot market.  The QFCP RECs are the most expensive but not extraordinarily so.  For example, SREC values vary from a high of $312 from the first residential procurement auction, to $217 from the Dover Sun Park, to $68 in the latest procurement auction, to $15 in the current Maryland spot market.  The Fuel Cell Tariff approval and construction of the generation facility was contemporaneous with the three existing wind farm contracts, and so are representative of a range of REC value at the time the Fuel Cell Tariff was approved.

In conclusion these precedents, and ratepayer expectations cry out for clarity on the fuel cell issue.  Please consider our clarifications to the proposed regulation to ensure the QFCP portion of the Renewable Compliance Charge is included in the RPS Cost Cap Calculation.

Sincerely,

David T. Stevenson
Director, Center for Energy Competitiveness
Caesar Rodney Institute
e-mail: DavidStevenson@CaesarRodney.org
Phone: 302-236-2050
Fax: 302-827-4558

You can make your voice heard right now at the Delaware Public Service Commission (PSC) to protect against future electric bill increases.

The PSC is considering a regulation on how to calculate the cost impact on electric bills of Delaware’s requirement that our electric suppliers purchase more expensive and unreliable wind and solar power every year.  In 2010 the legislature amended the Renewable Energy Portfolio Standard Act (REPSA) to include a cost cap of 3% on electric bills. The legislature figured there was value in using renewable power, but it didn’t want to overburden ratepayers, many who are living paycheck to paycheck.  Thus, it wrote a cap into the law that said electric bills should never go up by more than 3 percent to buy renewables.  If the cap was exceeded, the requirement for more renewable power was to be frozen until costs came down.  In 2011, the legislature again amended REPSA to allow a portion of the cost of fuel cell generation that Delmarva is forced to buy (and for which ratepayers are forced to pay) to count as renewable energy so Delmarva would not have to buy as much wind and solar power.

Well, that cap was exceeded in 2013. Renewables now add about 9% to electric bills, or $100 a year to residential bills, but there is no freeze!  Some industrial customers are paying a job-killing half million to a million dollars a year.

The story of how a freeze was avoided should make your blood boil.  The legislature added the 3% cost cap in 2010 and told the PSC to draft a regulation governing the cost cap calculations, with DNREC’s Division of Energy & Climate (Division) performing the actual calculations.  Then, the two agencies would consult to determine whether a freeze was called for. This division of labor made sense.  The PSC regularly balances the competing objectives of price, reliability, and environmental concerns in approving utility rates.  The Division of Energy & Climate advocates for renewable energy, which could potentially bias its approach to a cost cap calculation regulation to avoid a freeze.

The PSC ducked its responsibility, impermissibly delegating the duty for drafting the cost cap regulation to the Division.  The Division took its sweet time finalizing the regulation (almost four years), until the end of 2015 — thus avoiding doing a calculation that would have led to a freeze.  Moreover, the Division’s final regulation twisted the calculation process to avoid a freeze.  First, it flatly ignored the cost of the Bloom Energy fuel cell project.  Look at your electric bill: you will see the Renewable Compliance Charge broken into the fuel cell cost (Delaware Qualified Fuel Cell) and the wind and solar cost separately.  Divide the charge by your total bill to see what percentage you are paying.  Even though the fuel cells are fueled by conventional natural gas, the legislature approved fuel cell generation counting against the RPS requirements at twice the rate of an actual wind farm!

Second, the Division attempted to calculate the value of unpriced externalities, such as the health impacts of less air pollution, and count those externalities as part of the cost of electric supply.  In doing so, it used outdated emissions data, outdated health impact values, and counted jobs created in the solar industry, while ignoring jobs lost because of higher electric rates.  After exaggerating the benefits, it wanted to allow another 3% price increase!

The REPSA requires that our electric suppliers purchase 25% of their power from renewable sources by 2025; the current year’s target is 14.5%.  The idea was to generate renewable power in-state.  Instead, we are only generating about 1% of the power we use from in-state solar projects.  The rest is coming from landfill gas and biomass projects that were in place before the REPSA became law, natural gas-fired fuel cells, and out-of-state windfarms that raise electric bills but create no Delaware jobs. The point is that for all its cost and effort, the REPSA isn’t even close to doing what it was supposed to – but it is increasing the amount that Delawareans pay for electricity.

The Delaware Public Advocate (DPA), a state agency tasked with advocating the lowest reasonable rates for regulated utility consumers, and CRI petitioned the PSC to do its job and issue regulations.  The PSC refused.  The DPA appealed the PSC’s order and won!

The PSC has now drafted proposed cost cap regulations.  To read them, go to http://regulations.delaware.gov/register/march2017/proposed/20%20DE%20Reg%20713%2003-01-17.htm .

Here’s where you come in.

The PSC did eliminate the use of externalities in the cost cap calculations.  However, the wording is not clear enough: the fuel cell costs are excluded from the cost cap calculation.

CRI thinks the cost cap calculations should take into account the cost to buy solar and wind power and the amount going toward Bloom energy fuel cells when calculating the total cost of REPSA compliance.

If you think so too, let the PSC know. Written public comments are due by Monday, April 24, and the PSC will conduct a public hearing at 1 PM, April 6.  Written comments may be sent to Joseph DeLosa, Public Service Commission, 861 Silver Lake Blvd., Cannon Building Suite 100, Dover, DE 19904, or by e-mail to joseph.delosa@state.de.us.  The hearing is at the same location.

We are encouraging submission of written comments to the PSC similar to the following with the subject line “Regulation Docket No. 56”: “We support the proposed regulation, but please add clarifying language to ensure that the net cost of Renewable Energy Credits from a Qualified Fuel Cell Provider shall be included in the RPS Cost Cap Calculation.”                            

The improved regulation will probably result in a freeze to the increasing requirement for wind and solar power.  It will keep the cost from rising further.  (Interestingly, the price of solar installations has fallen so far it is likely that new solar projects will still be built without the state mandate, as is happening at many locations across America now).

David T. Stevenson
Director, Center for Energy Competitiveness
Caesar Rodney Institute

 

The House Ways and Means Committee 2008 timeline for Obamacare rollout pre-ordained a complete failure of the health insurance industry in 2017 and 2018. The mechanism of the economic failure known as the “Death Spiral” can be best described by adverse selection. Expensive sick patients are staying in and healthy customers are bailing out.

In December, Highmark offered my wife and me a plan in which our premiums for the year would be $19,000 with a combined deductible of $15,000. We bailed out to Medi-share for a vastly reduced amount of money. Highmark BCBS is now in full-fledged collapse mode, greatly exacerbated by eliminating their HMO option and forcing people into high deductible PPO plans. Their biggest block of patients, Delaware state workers, is at risk. Their biggest problem is Aetna which is making a move to consolidate complete control of the Delaware health insurance market, (they just displaced Geisinger as the health insurer for the state’s second largest employer, Christiana Care Health Systems). Aetna may actually survive the death spiral by sheer size and being the last man standing, thereby dictating rates.

The most recent instruction from President Trump to the IRS to not require tax filers to tell whether or not they purchased health insurance in 2016 accelerates the pace of the collapse by eliminating the risk of a penalty for healthy people not participating in the insurance pool. The pool of covered lives is therefore populated with sicker people. Mandated insurance coverage which eliminates denial for pre-existing conditions causes a situation where an uninsured person can develop an expensive disease and then immediately gain insurance coverage, of course at a substantial loss to the insurer.

All of this was obviously predictable, as I wrote in 2009, by simply looking at the timeline. 2017 and 2018 were baked in 8 years ago. Looking forward, the most optimistic chance for stabilization of the chaotic and insolvent market can only begin in 2019. By that time, the temporary federal Medicaid subsidy to Delaware will be gone and Delaware’s budget will not be able to be balanced. Between the loss of free market health insurance competition, the burgeoning cost of Medicaid, and the cost of providing health insurance to Delaware state workers and pensioners, the budget will be busted.

C.D Casscells, MD

Healthcare Policy

Caesar Rodney Institute

In reality, education reform is about economics. If done properly, it will attract/retain businesses, provide jobs, generate tax revenues, increase property values, reduce crime rates, and reduce the single largest item in the state’s budget. This was the direction taken in 1995 by Gov. Carper, State Superintendent Mike Ferguson, and a business consortium (DuPont, Bell Atlantic, Delmarva Power, Hercules, Zeneca, and Christiana Care) when they advocated for change in Delaware’s public education system.

To be clear, we must first distinguish between teaching and education. Teaching is a profession consisting mainly of teachers with special knowledge and training who exercise personal judgment in carrying out their responsibilities with students in the individual school buildings. The broader concept of education, however, is a business.

The 1995 concept of Delaware education reform was implemented in a pilot program at a school that proved to be very successful. In a study conducted by Dr. Gary Miron of the Evaluation Center at Western Michigan University at the request of the Delaware Department of Education and the State Board of Education, he observed that students at the new school were, “…outperforming their counterparts at similarly matched traditional public schools…”  The school achieved national recognition and generated a substantial operating surplus.

The essence of this bold plan was to shift operational decision-making authority from a school board and district into the individual school building. Control was now local and exercised by a principal working with teachers, answerable to parents with oversight and support provided by a board. Andreas Schleicher, a member of Rodel’s International Advisory Group, presented data at a Rodel Foundation Education Event to show that, when a school is given that type of autonomy, student performance is improved.

The significant reduction of district and board responsibilities should lead to a reduction of the number of school districts from 19 to 5 (1 in Sussex, 1 in Kent, 2 in New Castle, and 1 VoTech District.) New York City and Los Angeles each have only one school district.

Governor Carney’s first executive order creates a working group to consider a public-private partnership between Delaware’s Economic Development Office and the business community. Perhaps an education component should be added to the mix to reflect the previous business/education initiative. Recently the governor created a board to study government efficiency. Since education makes up about one-third of the state’s budget, if you have read this far in the article, you know this author’s position on education efficiency.

A reduced deficit, an improved economy, and higher student performance, now that’s a bold solution everyone can support.

Ronald R. Russo is a Senior Fellow at the Caesar Rodney Institute, and the Founding President of the Charter School of Wilmington.

7 1LINKEDINCOMMENT

The Obama Administration set records on expansive and expensive new environmental regulations.  In one example, compare the 56 federal implementation plans forced on states during the Obama years to the 5 total imposed by the combined Clinton and Bush presidencies.  Unfortunately, the Obama years also yielded the slowest regulation driven environmental gains in decades, 2% in seven years compared to 2% a year from 1980 to 2009.

The primary force for a better environment turned out to be innovations in natural gas production, a development the administration and environmental groups fought, that was carried out by private industry on private lands. Natural gas prices dropped 80% as producers figured out how to use horizontal drilling and hydraulic fracturing to release tightly held gas from shale formations.  Falling natural gas prices dragged down the price of coal and oil that shows up in lower electricity, gasoline, and heating costs, and is saving families over $1500 a year in lower energy prices!  Fuel switching from coal to cleaner burning natural gas at power plants added almost another 5% improvement in air quality.

Obama era regulations targeted three primary substances; ground level ozone and fine particles the Environmental Protection Agency claimed posed a health hazard, and carbon dioxide the EPA linked to rising global temperatures.  Ozone levels improved by 1% a year up to 2009, but only improved 1% in seven years under Obama.  Fine particles improved 3% a year up to 2009, but only improved 3% over seven years under Obama.  The Obama regulatory effort reduced carbon dioxide emissions by an amount that will lower global temperatures by 0.01°C by 2100, essentially zero impact!  Carbon dioxide reductions from power plants can be attributed 70% to fuel switching for lower prices, and 30% to new regulations.

EPA cost benefit analysis showed new regulations would cost tens of billions of dollars a year to implement.  Free market sources, such as, the US Chamber of Commerce, estimated the cost to more likely be hundreds of billions of dollars.  Either way, a lot of money for marginal air pollution improvements.

The problems don’t end with air pollution regulations.  Voluntary multistate programs to improve water quality in areas such as the Chesapeake Bay brought Water Quality Index improvements of 25-percent from 1986 to 2010. That improvement ended after the voluntary agreement became a regulation in 2010 requiring states to institute mandatory steps, such as, storm water management regulations.  No water quality improvement, but those regulations have managed to increase new home prices by $10,000 each in the Chesapeake watershed.

Aggressive requirements in motor vehicle miles per gallon standards were also mandated.  The latest information shows average MPG for the nations motor vehicle fleet actually dropped from 17.6 MPG in 2009 to 17.5 MPG in 2014.  The mandated MPG standards were unreachable and will likely be scaled back to a more practical level by the Trump Administration.

The Obama Administration, often through procedural short cuts and with support from questionable science, relied on ineffective regulations to “improve” the environment.  Predictably, results were poor.  We look forward to the Trump Administration rolling back bad regulations, and following the rule of law.  We expect a focus on actual improvements to the environment. This could include increasing infrastructure spending on securing drinkable water (remember Flint?), improving sewer systems, and reclaiming brownfields and Superfund sites.  Under the new administration, infrastructure spending could double without increasing the budget by using sources such as multi-billion dollar fines from the Volkswagen settlement for fudging tail pipe emissions, and other large settlements instead of handing them over to the Sierra Club and Greenpeace, favored interest groups of the Obama EPA administration.

For more details on air quality improvements see our study “Sorting Root Causes of Air Quality Improvements 2009 to 2015” at https://criblog.wordpress.com/2017/02/12/sorting-root-causes-of-air-quality-improvements-2009-to-2015/ .

David T. Stevenson, Director, Member Trump Administration EPA Transition Team

E-Mail: David Stevenson@CaesarRodney.org

Executive Summary

There are two pollutants listed for action in the Clean Air Act that still have potential negative health impacts according to the EPA; fine particles (PM2.5) and Ozone. Dramatically tightened rules from the Obama Administration on power plants, motor vehicles, and the Ozone National Ambient Air Quality Standard had essentially no impact on emission levels of those two pollutants.

A number of major regulations have been implemented since 2009. The motor vehicle industry saw a dramatic increase in the requirements for higher Corporate Average Fuel Economy, and tighter emission guidelines. Electric power plants have seen the most impact from regulation including the Mercury & Air Toxics Rule (MATS), the Cross State Air Pollution Rule (CSAPR), the Carbon Pollution Standard for New Power Plants which established New Source Performance Standards (NSPS), and the Clean Power Plan (CPP), all targeted at reducing the use of coal. Two reductions in the NAAQS for maximum Ozone levels tightened the standard by 12.5% and impacts all applications burning fossil fuels.

Fine particle levels were reduced by 3%, but 93% of the U. S. population already lives in areas in compliance with national standards. There was less than 1% reduction in Ozone levels between 2009 and 2015, and it is likely 2016 Ozone levels will show zero improvement from 2009 as it was a hot summer which leads to higher Ozone levels. It is unlikely the regulations will have any additional significant impact going forward. Regulations reduced Carbon dioxide emissions roughly 0.5 billion metric tons annually, but the impact of that on global temperatures in 2100 will be less than 0.01°C.

  • The entire country is in compliance for Carbon Monoxide, and Nitrogen Dioxide, and will be in compliance by the end of 2017 for
  • Sulphur Dioxide averaged 66% below the standard, and only ½% of the country is above the
  • Fine particles ten micrometers or smaller averaged 65% below the standard, and only 3% of the country is above the
  • Fine particles 2.5 micrometers or smaller averaged 29% below the standard, and only 7% of the country is above the
  • Ground level Ozone averages 1% below the standard, but 37% of the country is above the

The EPA publishes an aggregate of reductions in ambient air quality levels by averaging annual results for six pollutants and ground level Ozone. There have been major improvements with a net 62% reduction since 1980. However, progress since 2009 has been small with most of the improvement related to non-regulatory induced reductions in the price of natural gas. Pricing impacts can be seen starting in 2009 in lower operating hours for coal- fired power plants, with regulatory changes apparent beginning in 2012 with lower coal-fired generating capacity, so calculations are straight forward. Power plant air quality improvements are due 70% to lower natural gas prices, and 30% to new regulations.

Both influences are unlikely to lead to any further improvement in air quality. Regulatory changes for motor vehicles have had almost no impact as fuel use increased 3% and average fuel economy went down ½%. The EPA reported tons of emissions from motor vehicles dropped between 2009 and 2014; carbon monoxide by 16%, volatile organic compounds by 20%, and nitrogen dioxide by 26%. None of those pollutants currently pose a health risk as ambient levels are way below the point they impact health.

Motor vehicle emissions improvements should show up primarily in lower Ozone levels. Ozone ambient levels came down less than 1% in seven years. Clearly, the tougher motor vehicle standards had very little impact on ambient levels of Ozone. We suspect the lack of progress in improving Ozone levels is related to the fact we are most likely approaching natural background levels. Any regulation to reduce ozone will be very expensive with very little positive result.

The air quality impact of new regulations promulgated by the Obama Administration have pretty much run their course. The MATS regulation failed to follow the Administrative Procedures Act by not completing a proper cost/benefit analysis and was overturned by the courts. The Impact of MATS was already completed by the time the courts ruled, and those impacts duplicated most of the potential impact of the Cross State regulation. It is likely the Clean Power Plan will be overturned by the courts, and will certainly be withdrawn by the Trump Administration. The gasoline mileage targets set by the Obama Administration are unrealistically high, and are unlikely to have been met. The Trump Administration will likely review the targets and cut them back to more realistic levels. Plus, it takes fifteen years to turn-over the vehicle fleet so progress on reducing pollution will be slow.

Natural gas prices are unlikely to fall further.  In fact, it is more likely they will increase.

European natural gas prices are running 2.5 times higher than U. S. prices. There is a huge drive to export from the U. S. to Europe which requires expensive capital investment to liquefy the gas to allow shipment in an efficient manner. A number of Liquefied Natural Gas plants are under construction, and natural gas prices should rise as exports begin.  Higher natural gas prices should lead to a slight electric generation shift back to coal raising coal generation capacity factors. Some planned closings of coal-fired power plants will likely continue, but it is likely the plant closing trend would end under either administration.

Methodology

Break out the components of the aggregate air quality improvement reported by the EPA. Compare the timeline of potential key change agents to actual results and historic trends to determine the most likely change agents impacting air quality. Review data to quantify the relative impact of various change agents.

 

Criteria Pollutants

The Clean Air Act establishes a list of pollutants to be regulated by the Environmental Protection Agency. The EPA is to review National Ambient Air Quality Standards (NAAQS) for each pollutant every five years. Air Quality Monitoring Stations scattered around the country measure various pollutants. Dramatic progress has been made since 1980, and the first five pollutants listed below are now not monitored at most stations. The emission source relative contribution is listed in parenthesis.

CO – Carbon Monoxide, 69 sites (NAAQS 9 ppm 8 hour average, not to be exceeded more than once a year). The standard was last revised in 1971, there are no non-attainment areas with the national ambient average 84% below the standard, with the primary source of emissions being motor vehicles (54%), and miscellaneous sources (35%).

Lead – 8 sites (NAAQS 0.15 micrograms/m3 maximum of three month rolling average). The standard was last revised in 2008, there will be no non-attainment areas by the end of 2017 with the national ambient average 85% below the standard, with the primary remaining source being lead smelters.

SO2 – Sulphur Dioxide, 45 sites (NAAQS 75 ppb 99th percentile of one hour daily maximum, averaged over three years). The standard was last revised in 2010, there are 2 million people living in non-attainment areas in small pockets around the country with the national ambient average 66% below the standard, with the primary source being fuel combustion including coal- fired power plants (82%).

NO2 – Nitrogen Dioxide, 26 sites (NAAQS 100 ppb 98th percentile of one hour daily maximum, averaged over three years). The standard was last revised in 1971, there are no non- attainment areas with the national ambient average 55% below the standard, with the primary sources being motor vehicles (58%) and fuel combustion including power plants (29%).

Nitrogen Dioxide (NO2) is the primary source for Nitrous Oxide (NO) when ultraviolet light strips off an oxygen atom, and of other nitrogen oxides (NOx).  Nitrous Oxide is the required catalyst to create Ozone. It is produced directly from the burning of fossil fuels but is very reactive and has a short lifespan in the atmosphere.

PM10 – Particulate Matter ten micrometers or smaller, 171 sites (NAAQS 150 micrograms/m3 averaged over 24 hours, not to be exceeded more than once per year on average over three years). The standard was last revised in 1987, there are 9 million people living in non- attainment areas primarily in California and in pockets in other western states with the national ambient average 65% below the standard, with the primary source being miscellaneous including forest fires, dust, and volcanoes (87%), fuel combustion including power plants (5%), and industry (5%).

PM2.5 – Particulate Matter 2.5 micrometers or smaller, 480 sites (NAAQS 12 micrograms/m3 annual mean, averaged over three years). The standard was last revised in 2012, there are 23 million people living in non-attainment areas primarily in California with small pockets in Ohio and Pennsylvania with the national ambient average 29% below the standard, with the primary source being miscellaneous including forest fires, dust, and volcanoes (71%), coal-fired power plants (14%), motor vehicles (6%), and industry (7%).

Ozone – 212 sites (NAAQS 70 ppb annual fourth highest daily 8 hour maximum, averaged over three years). The standard was last revised in 2015, there are 119 million people living in non- attainment areas primarily in high population density urban areas with the national ambient average 1% below the standard. Ground level Ozone is not emitted directly, but is created in a chemical reaction between oxygen and volatile organic compounds, methane, and carbon monoxide in the presence of sunlight and a nitrous oxide catalyst. High temperatures accelerate reactions leading to summer time peaks in ambient Ozone levels. It is more difficult to weight Ozone precursor sources, but the EPA shows natural sources may make up 50%.

Nitrogen oxides come from motor vehicles (58%), and other fuel combustion including power plants (29%). Volatile organic compounds (VOC) come from industry (39%), natural biogenic (33%), and motor vehicles (23%). Other natural sources, such as, wildfires and methane also play a role. We do note maps of modeled ambient NOx levels show the greatest peaks near major highways and NOx is critical for Ozone production (see below map).

Source: ICF International using EPA Modeling Programs

 

Air Quality Changes

The EPA publishes an aggregate of reductions in ambient air quality levels by averaging annual results for six pollutants and ground level Ozone. Table 1 summarizes the raw data, and Table 2 summarizes the percent reductions with the data from the EPA Air Quality Trends website at https://www.epa.gov/air-trends. Table 3 lists emission inventory, and Table 4 highlights the percentage point improvement of each pollutant.

Table 1: Average Ambient Air pollution levels for fifty monitoring stations

Year CO Lead SO2 NO2 PM10 PM2.5 Ozone
1980 9.092754 1.84125 159.75778 108.49615 0.101198113
1981 8.999275 1.34125 151.87889 104.60385 0.095495283
1982 8.486473 1.073125 137.17778 104.94231 0.093757075
1983 8.60628 1.0925 147.22889 96.726923 0.101867925
1984 7.987681 1.0475 134.69333 92.902564 0.09403066
1985 7.480435 1.28875 138.61333 94.888462 0.093212264
1986 7.810145 0.7125 137.17444 96.985897 0.091691038
1987 7.046377 0.830625 134.07778 96.326923 0.095560535
1988 6.908696 1.42625 140.08519 100.50385 0.104970126
1989 6.953623 0.675 134.77185 98.411538 0.089396226
1990 6.478261 0.42625 120.15407 92.153846 84.9298246 0.089580189
1991 6.198551 0.35625 113.66222 92.973077 86.0233918 0.090209906
1992 5.714493 0.31375 110.71185 80.434615 74.5847953 0.084120283
1993 5.378261 0.2625 101.64296 78.126923 73.6461988 0.086837264
1994 5.553623 0.30125 103.8963 81.126923 72.702729 0.086521226
1995 4.997101 0.3275 94.824444 80.961538 73.168616 0.090599057
1996 4.614493 0.1975 87.677778 73.055769 65.4853801 0.085811321
1997 4.249275 0.1975 92.648889 69.919231 66.5964912 0.08509434
1998 4.105797 0.17875 89.708889 67.088462 62.5692008 0.090320755
1999 4.072464 0.20875 91.225926 71.403846 69.3489279 0.088084906
2000 3.585507 0.2175 82.716296 64.565385 65.6491228 13.500417 0.082063679
2001 3.355072 0.30875 85.546667 64.696154 64.3450292 13.2500051 0.083731132
2002 2.923188 0.14875 74.22963 61.880769 63.5643275 12.8225871 0.087933962
2003 2.749275 0.1325 78.805926 61.803846 67.3450292 12.3261245 0.082316038
2004 2.575362 0.27375 75.626667 56.267949 57.1345029 12.0194898 0.075070755
2005 2.322464 0.135 74.914074 55.94359 60.4269006 12.8213388 0.080023585
2006 2.252174 0.11875 68.854815 54.869231 61.0994152 11.6018527 0.079304245
2007 1.973913 0.109375 64.717778 53.192308 63.4951267 11.9017996 0.07925
2008 1.757971 0.11375 58.954815 52.2 58.91423 10.8493589 0.075245283
2009 1.723188 0.099375 50.815185 48 52.5087719 9.79977943 0.069929245
2010 1.636232 0.07625 46.25037 47.511538 53.0643275 9.89908439 0.073382075
2011 1.705797 0.08125 37.940741 47.863462 55.5438596 9.74826315 0.074410377
2012 1.567391 0.09375 36.683704 44.761538 53.380117 9.1044105 0.075929245
2013 1.473913 0.08 30.474444 45.850641 57.5438596 8.89536258 0.067299528
2014 1.398551 0.03625 31.934074 46.866667 55.0233918 8.7921365 0.068033019
2015 1.411594 0.02125 25.257778 44.603846 51.9415205 8.49430699 0.068995283

Table 2: Percent Reduction of Ambient Levels of Pollutants from a Base Year

Year CO Lead SO2 NO2 PM10 PM2.5 Ozone Average
1980
1981 -1.0% -27.2% -4.9% -3.6% -5.6% -8.5%
1982 -6.7% -41.7% -14.1% -3.3% -7.4% -14.6%
1983 -5.4% -40.7% -7.8% -10.8% 0.7% -12.8%
1984 -12.2% -43.1% -15.7% -14.4% -7.1% -18.5%
1985 -17.7% -30.0% -13.2% -12.5% -7.9% -16.3%
1986 -14.1% -61.3% -14.1% -10.6% -9.4% -21.9%
1987 -22.5% -54.9% -16.1% -11.2% -5.6% -22.1%
1988 -24.0% -22.5% -12.3% -7.4% 3.7% -12.5%
1989 -23.5% -63.3% -15.6% -9.3% -11.7% -24.7%
1990 -28.8% -76.8% -24.8% -15.1% -11.5%
1991 -31.8% -80.7% -28.9% -14.3% 1.3% -10.9% -27.5%
1992 -37.2% -83.0% -30.7% -25.9% -12.2% -16.9% -34.3%
1993 -40.9% -85.7% -36.4% -28.0% -13.3% -14.2% -36.4%
1994 -38.9% -83.6% -35.0% -25.2% -14.4% -14.5% -35.3%
1995 -45.0% -82.2% -40.6% -25.4% -13.8% -10.5% -36.3%
1996 -49.3% -89.3% -45.1% -32.7% -22.9% -15.2% -42.4%
1997 -53.3% -89.3% -42.0% -35.6% -21.6% -15.9% -42.9%
1998 -54.8% -90.3% -43.8% -38.2% -26.3% -10.7% -44.0%
1999 -55.2% -88.7% -42.9% -34.2% -18.3% -13.0% -42.0%
2000 -60.6% -88.2% -48.2% -40.5% -22.7% -18.9%
2001 -63.1% -83.2% -46.5% -40.4% -24.2% -1.9% -17.3% -39.5%
2002 -67.9% -91.9% -53.5% -43.0% -25.2% -5.0% -13.1% -42.8%
2003 -69.8% -92.8% -50.7% -43.0% -20.7% -8.7% -18.7% -43.5%
2004 -71.7% -85.1% -52.7% -48.1% -32.7% -11.0% -25.8% -46.7%
2005 -74.5% -92.7% -53.1% -48.4% -28.9% -5.0% -20.9% -46.2%
2006 -75.2% -93.6% -56.9% -49.4% -28.1% -14.1% -21.6% -48.4%
2007 -78.3% -94.1% -59.5% -51.0% -25.2% -11.8% -21.7% -48.8%
2008 -80.7% -93.8% -63.1% -51.9% -30.6% -19.6% -25.6% -52.2%
2009 -81.0% -94.6% -68.2% -55.8% -38.2% -27.4% -30.9% -56.6%
2010 -82.0% -95.9% -71.0% -56.2% -37.5% -26.7% -27.5% -56.7%
2011 -81.2% -95.6% -76.3% -55.9% -34.6% -27.8% -26.5% -56.8%
2012 -82.8% -94.9% -77.0% -58.7% -37.1% -32.6% -25.0% -58.3%
2013 -83.8% -95.7% -80.9% -57.7% -32.2% -34.1% -33.5% -59.7%
2014 -84.6% -98.0% -80.0% -56.8% -35.2% -34.9% -32.8% -60.3%
2015 -84.5% -98.8% -84.2% -58.9% -38.8% -37.1% -31.8% -62.0%

Table 3: Emission Inventory in millions of short tons

CO 09  

14

SO2 09  

14

NO2 09  

14

PM10 09  

14

PM2.5 09  

14

VOC 09  

14

Motor Vehicle 43.36 36.30 0.25 0.10 9.60 7.16 0.54 0.49 0.49 0.35 5.12 4.12
Fuel Comb. 4.45 4.60 7.47 4.09 4.75 3.59 0.98 0.98 0.84 0.84 0.58 0.63
Industry Comb. 1.82 1.97 0.70 0.58 1.06 1.18 1.16 0.94 0.45 0.40 6.72 6.94
Waste Recycle 1.29 1.11 0.02 0.02 0.09 0.08 0.22 0.19 0.19 0.16 0.17 0.13
Misc. 21.84 23.78 0.15 0.20 0.28 0.40 18.29 18.06 4.06 4.29 4.91 5.81
Total 72.75 67.76 9.09 4.99 15.77 12.41 21.20 20.62 5.99 6.03 17.58 17.62

Source: Emissions are from EPA emission inventory summary at https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_ statistics/index.html  Tables 4.45 to 4.50

 

Table 4: Percentage Point Improvement for each pollutant (2009-2015)

Pollutant CO Lead SO2 NO2 PM10 PM2.5 Ozone VOC Aggregate
% Point Reduction 3.5 4.2 16 3.1 0.6 9.7 0.9 N/A 5.4
% Emission Reduction 6.9 N/A 45.1 21.3 2.7 0 N/A 0 N/A

Note: SO2 and PM2.5 account for over two thirds of the aggregate improvement of air quality

 

Regulatory Impacts

A number of major regulations have been implemented since 2009. The motor vehicle industry saw a dramatic increase in the requirements for higher Corporate Average Fuel Economy, and tighter emission guidelines. Electric power plants have seen the most impact from regulation including the Mercury & Air Toxics Rule (MATS), the Cross State Air Pollution Rule (CSAPR), the Carbon Pollution Standard for New Power Plants which established New Source Performance Standards (NSPS), and the Clean Power Plan (CPP), all targeted at reducing the use of coal. Two reductions in the NAAQS for maximum Ozone levels tightened the standard by 12.5% and impacts all applications burning fossil fuels.

The EPA reports the primary health impacts of pollutants are related to fine particulate matter (PM2.5) and Ozone. Motor vehicles have a small impact on fine particles (6%), but are the greatest influence on Ozone precursors providing 58% of the Nitrogen Dioxide, 54% of the Carbon Monoxide, 23% of the Volatile Organic Compounds. Between 2009 and 2014 (latest data available) motor vehicle miles driven increased 2.3%, fuel use increased 3%, and average fuel economy actually decreased 1/2 % from 17.6 MPG to 17.5. The EPA reported tons of emissions from motor vehicles dropped between 2009 and 2014; CO by 16%, VOC by 20%, and NO2 by 26%.  Despite dramatic new regulations on motor vehicles, Ozone ambient levels came down less than 1% in seven years. Clearly, the tougher motor vehicle standards had very little impact on ambient levels of Ozone.

We suspect the lack of progress in improving Ozone levels is related to the fact we are most likely approaching natural background levels. It takes a very small amount of NO to fill its catalytic role, and the supply needed is readily available from sunlight interacting with just about any level of NO2. We compared Ozone levels over several years in very urban Wilmington, DE to very rural Lewes, DE. Ozone levels were essentially the same both on average and for peak times during the May through September Ozone Season. We found no correlation between daily NO2 levels and Ozone despite the fact NO2 averaged six times as high in Wilmington. Similarly, almost 95% of manmade VOC’s come from motor vehicle and industrial sources. We expect Wilmington to have very high levels of manmade VOC’s while Lewes would have almost none (VOC’s are not measured in Lewes). Yet the Ozone levels were essentially the same. At this point, naturally occurring Ozone is swamping human impacts.

Coal-fired power plants account for up to 82% of Sulphur Dioxide (SO2) emissions which are precursors to fine particles, and about 40% of direct fine particle (PM2.5) emissions. Only about 1/2% of Americans live in areas above air quality standards for SO2, and 7% live in areas above the fine particle standard. As noted above, reduced SO2 and PM2.5 account for about two thirds of the aggregate improvement in air quality from 2009 to 2015. EPA emission inventory shows direct PM2.5 emissions didn’t change during the period but SO2 emissions were cut in half.

The key question is how much of the improvement in power plant emission reduction was caused by EPA regulations. As shown in Chart 1 below, natural gas prices dropped significantly starting about 2009 driven by an increase in supply from the deployment of hydraulic fracturing and horizontal well drilling technology in shale formations. EPA regulations began taking effect in 2012. Lower prices played a major role in a switch from coal to natural gas for electric generation starting in 2009, and regulations impacted generation capacity starting in 2012.

Chart 1

chart-1

Source: US Energy Information Agency

Total electric generation has been relatively constant since 2003, but increased almost 3% from 2009 to 2016 as the economy recovered from the recession (Chart 2 below). That increase in demand was met with wind and solar power growth driven by state Renewable Portfolio Standards along with federal and state subsidies. Coal-fired generation was relatively constant until 2008, and began to fall in 2009. The fall paralleled declining natural gas prices. Natural gas generation has been increasing for decades at a relatively constant rate.

Chart 2

searching-root-causes-chart-2

Source: US Energy Information Agency

EPA regulations did impact coal-fired generation capacity as shown in Chart 3. Many older, smaller power plants were shut down rather than invest in expensive filtration equipment that would be needed to meet new standards. The downturn in coal capacity coincides with new regulation implementation beginning in 2012.

Chart3

searching-root-causes-chart-3

Source: US Energy Information Agency

However, more important to coal-fired generation was the change in how often power plants ran in comparison to natural gas-fired power plants over time (Capacity Factor) which is shown in Chart 4.  The decline tracks the falling natural gas price curve.

Chart 4

searching-root-causes-chart-4

Source: US Energy Information Agency

We can parse the relative impact on generation between regulatory induced capacity reductions and price driven capacity factor shifts from fuel switching. In 2008, before any impact of lower natural gas prices or new regulations, there was 1,986 million megawatt-hours of coal fired power produced by 337,300 megawatts of capacity at a 73% capacity factor. In 2016, 1,211 million megawatt-hours of power was produced from 295,986 megawatts of capacity at a 51 % capacity factor for a net loss of 775 megawatt-hour, or a 39% reduction. If the capacity factor had stayed the same, the lower 2016 capacity would have produced 1,743 million megawatt-hours of power for a 243 megawatt-hour, or 12% reduction. So, lower natural gas prices resulted in 69% (532/775) of the power reduction and 31% (243/775) was a result of new regulations. All generation data is from the US EIA Electric Power Monthly.

The final calculation is to adjust each of the aggregate reduction contributors for non- regulatory change impacts (Table 5). There were no new regulations for lead and PM10. Motor vehicles and power plants accounted for 54% of CO emissions, 87% of NO2 emissions, and we assume 50% for Ozone although it could be as low as 10%. Therefore, air quality only improved 1.9% from 2009 to 2015 because of regulations, or about 0.27%/year.

Table 5: Adjusted Aggregate Improvement in Air Quality 2009 to 2015

Pollutant % Point Reduction % from Reg. Change Net Point Reduction from Reg.
CO 3.5 54 1.9
Lead 4.2 0 0
SO2 16 31 5
NO2 3.1 87 2.7
PM10 0.6 5 0
PM2.5 9.7 31 3
Ozone 0.9 50 0.5
Total/7 Pollutants 1.9

 

Carbon Dioxide Emissions

According to the U.S. Energy Information Agency total carbon dioxide emissions fell 12% from 2005 to 2015 from 6,023 million metric tons to 5,300. Electric generation accounted for 68% of that reduction as the industry switched from coal to natural gas which has about half the carbon dioxide emissions per megawatt-hour as coal. Most of the balance of reductions came from the transportation sector.  As calculated above, lower natural gas prices drove 69% of the electric generation reductions, so in total, market forces drove about 47% of the total carbon dioxide reduction, or 226 million metric tons. Regulations cut emissions by 497 million metric tons.  That reduction will lower global temperatures by 0.007°C by 2100.

 

Going Forward

The air quality impact of new regulations promulgated by the Obama Administration have pretty much run their course. The MATS regulation failed to follow the Administrative Procedures Act by not completing a proper cost/benefit analysis and was overturned by the courts. The Impact of MATS was already completed by the time the courts ruled, and those impacts duplicated most of the potential impact of the Cross State regulation. It is likely the Clean Power Plan will be overturned by the courts, and will certainly be withdrawn by the Trump Administration.

Natural gas prices are unlikely to fall further. In fact, it is more likely they will increase. European natural gas prices are running 2.5 times higher than U. S. prices. There is a huge drive to export from the U. S. to Europe which requires expensive capital investment to liquefy the gas to allow shipment in an efficient manner. A number of LNG plants are under construction, and prices should rise as exports begin. Higher natural gas prices should lead to a slight electric generation shift back to coal raising coal generation capacity factors. Some planned closings of coal-fired power plants will likely continue, but the closing trend would end under either administration.

The gasoline mileage targets set by the Obama Administration are unrealistically high, and are unlikely to have been met. The Trump Administration will certainly review the targets and cut them back to more realistic levels. Plus, it takes fifteen years to turn-over the vehicle fleet so progress on reducing pollution will be slow. As discussed above, it appears no regulatory or market action will likely improve Ozone ambient levels as we are so close to natural background levels. Ozone levels were reduced by less than 1% from 2009 to 2015, but higher temperatures in the US in 2016 will likely wipe out even that small gain.

 

Conclusion

There are two pollutants listed for action in the Clean Air Act that still have potential negative health impacts; fine particles (PM2.5) and Ozone.  Dramatically tightened rules from the Obama Administration on power plants, motor vehicles, and the Ozone National Ambient Air Quality Standard had essentially no impact on emission levels of those two pollutants. Fine particle levels were reduced by 3%in seven years, but 93% of the U. S. population already lives in areas in compliance with national standards. There was less than 1% reduction in Ozone levels between 2009 and 2015, and it is likely 2016 Ozone levels will show zero improvement from 2009 as hot summers lead to higher ozone levels. It is unlikely the regulations will have any additional significant impact going forward. The regulations reduced Carbon dioxide emissions roughly 0.5 billion metric tons, but the impact of that on global temperatures in 2100 will be less than 0.01°C

David T. Stevenson, Director

Center for Energy Competitiveness

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/16/2016

Gina McCarthy

Administrator

United States Environmental Protection Agency

Ariel Rios Building

1200 Pennsylvania Avenue, N.W.

Mail Code: 1101A

Washington, DC 20460

 

RE: Public Comments on EPA-HQ-OAR-2016-0347, Section 126 Petition from Delaware and Connecticut on Brunner Island Power Plant

 

We urge the EPA to deny the petition of these states that would require the Brunner Island power plant to add Selective Catalytic Reduction (SCR) technology, to switch to 100% natural gas fuel to reduce nitrous oxide emissions, or to move to a 24 hour maximum average emissions regimen for the following reasons:

  • The Brunner Island power plant meets the EPA mandated Pennsylvania State Implementation Plan which limits the nitrous oxide emissions rate to 0.35lbs per million British Thermal Units averaged over 30 days. Meanwhile, Delaware has met the EPA National Ambient Air Quality Standard (NAAQS) of 8 hour maximum limit of 75 parts per billion (PPB) for the fourth highest day, averaged for ozone over the last three years, and even met the new 70 PPB limit in 2015.  No action is required under current regulations.
  • A $100 million construction project to convert the Brunner Island power plant to co-firing potential with coal or natural gas will be complete in the spring of 2017, and will significantly lower nitrous oxide emissions in the ozone season (May 1 to September 30) reducing any impact on Delaware.
  • Power plants account for only 7% of nitrogen dioxide (NO2) levels in Delaware, and totally eliminating this source would not significantly change ozone levels.
  • A key assumption of the petitioner’s claims is higher NO2 levels yield higher ozone levels. An analysis of ambient levels of nitrogen dioxide (NO2) and ozone (O3) in New Castle County, Delaware, from 2013 to 2015, show no correlation between higher levels of NO2 and higher levels of ozone.

 

Brunner Island to Switch to Natural Gas from Coal during the Ozone Season in 2017

A $100 million construction project to convert the Brunner Island power plant to co-firing potential with coal or natural gas will be complete in the spring of 2017, and will significantly lower nitrous oxide emissions which are a precursor for ground level ozone.  Natural gas inherently emits 80% less nitrous oxide during combustion compared to coal.  Natural gas is used as the primary space heating fuel in 56% of homes in the United States according to the US Energy Information Agency so, prices peak in the winter when demand is high (Graph 1). This is why average generation with natural gas fired power plants peaks every summer when prices are lower (Graph 2).  There is a very high probability natural gas will be the fuel used at Brunner Island during the Ozone Season (May 1 to September 30), and would have been used all year in 2015 except for the winter.  The co-firing project meets the same ozone season nitrous oxide emission goals as a $600 million1 SCR project would while offering a lower cost impact for electric customers.  The project also cuts carbon dioxide emissions in half and lowers sulfur dioxide emissions during the period natural gas is used.  Co-firing also offers fuel diversity critical to maintaining electric grid reliability.  Over dependence on natural gas could lead to blackouts during severe winters in the future when natural gas is in tight supply and pipelines might freeze as happened during the 2014 polar vortex.

 

Graph 1: Pennsylvania Power Plant Fuel Cost 2015 by Month – $/MMBTU

BI graph one

Source: US Energy Information Agency Electric Power Monthly Tables 4.10A and 4.13A

Note: Coal prices are adjusted for lower heat rates but higher operating costs for FGD use  

 

Graph 2: Seasonal Electric Generating Unit Coal vs. Natural Gas Generation

BI graph two

Source: U.S. Energy Information Administration, Electric Power Monthly, Short-Term Energy Outlook

                                   

Upwind Power Plants Account for a Small Percent of Delaware’s Ambient NO2 Levels

The Delaware petitioner claims that upwind emission sources account for 94% of Delaware’s ozone levels.  By omission, the petitioner leaves the impression the transport of ozone from upwind sources is the problem.  Ground level (tropospheric) ozone is actually produced locally in two general chemical reactions2:

  • The energy of sunlight splits a nitrogen dioxide molecule (NO2) into a nitric oxide molecule (NO) and a free oxygen atom (O). The free oxygen atom combines with an oxygen dioxide molecule (O2) to form ozone (O3).  The reaction reverses fairly quickly as nitric oxide and ozone are very reactive.  Coal fired power plants emit a combination of nitrogen dioxide and nitric oxide (which quickly reacts to become nitrogen dioxide) and can be transported by the wind.  NO2 also occurs naturally, and from a variety of manmade sources, primarily motor vehicles.
  • A sunlight split nitrogen dioxide molecule can also react in a complex way with a wide range of Volatile Organic Compounds (VOC) to form ozone which tends to be longer lasting. VOCs can be generated by natural sources, such as vegetation, and by manmade manufacturing and combustion.  Natural sources can be overwhelming in places like the Great Smokey Mountain National Park which derives its name from naturally occurring ozone in the form of smog.  The VOC source is pinetene from pine trees and ozone levels exceed national air quality standards!

 

In both cases nitrogen dioxide is considered a catalyst, the reaction can’t occur without it but the amount of nitrogen dioxide is ultimately unchanged over a 24 hour period.  Ozone is highly reactive with any physical surface and can cause injury to plants and animals, especially sensitive people with asthma or COPD.  The local nature of ozone is confirmed by Graph 3 below which shows how ozone forms in the day and falls to essentially zero overnight.  Ozone is also formed in the stratosphere and can be mixed by downdrafts with ground level ozone but that generally occurs in mountainous areas such as the Rockies.

 

Graph 3: Diurnal Ozone Production

BI graph three

Source: NASA Earth Observatory

 

There are a number of variables in ozone creation including the amount of sunlight, temperature, wind, humidity, the amount of VOCs, and even ocean breezes as ozone has a longer shelf life over water.  The highest ozone days are on hot summer days grouped around the summer solstice, with low wind and moderate humidity, in urban areas with high VOCs.

The petitioner also leaves the false impression power plants are the main source of ozone precursors.  Power plants account for only 7% of NO2 levels in Delaware.  Electric Generating Units (EGU) emissions are overwhelmed by vehicle and other emission sources as shown in Graph 4 below.  The claim the Brunner Island power plant has a significant impact on ground level ozone levels in Delaware is simply wrong.

 

Graph 4: NOX Contribution Sources in Delaware

BI graph four

Source: Delmarva Power 2012 IRP “Air Quality & Health Impacts Assessment”, ICF International using 2010 to 2013 average data

 

There is No Correlation between Higher Levels of Nitrogen Dioxide and Higher Levels of Ozone

The Petitioner relies on modeling from Sonoma Technology Inc. (STI).  They used a computer model based on work done by the United States Environmental Protection Agency to determine downwind dispersion of various emissions, including nitrous oxide, and the chemical reactions related to the emissions.  The model used is the Comprehensive Air Quality Model with Extensions (CAMx) with Ozone Source Apportionment Technology (OSAT). According to the Sonoma report, page 12, “OSAT uses reactive tracers to track the fate of these precursor emissions and the ozone formation resulting from them within a CAMx simulation”.  Unfortunately, STI did no real world, on the ground verification of the validity of the tracers.

Ambient levels of NO2 are currently averaging 19 PPB daily one-hour maximum during the ozone season with a range of 5 to 50 PPB over the years 2013 to 2015 (measured at the Martin Luther King Blvd. air quality monitoring station in Wilmington, Delaware).  The Wilmington site is the only air monitoring station in Delaware regularly measuring NO2.  Monitoring equipment doesn’t always work so we only had data for 346 days out of a possible 459.  The 19 PPB is 80% below the NAAQS 98th percentile, three year average maximum allowed of 100 PPB.  When we ran a statistical correlation between NO2 levels and ozone levels we found the correlation was 0.08, so essentially there was no correlation between the two!  Zero equals no correlation and 1 equals perfect correlation.  The computer may have done an excellent job tracking NO2 concentrations, but the Brunner Island simulation only added 1.9 PPB average to ozone levels with a range of 0.7 to 4.9 PPB according to STI.  However, real world data does not confirm the computer tracer module results.  There was no impact from Brunner Island on Delaware ozone levels.

For further verification we looked at 2013 data from the Lewes, Delaware, air monitoring station which measured NO2 that year.  Lewes is a rural station while Wilmington is more urban.  The Lewes station showed an ozone season average ambient level of NO2 of only 3 PPB, one-sixth as much as Wilmington, with a range of 0.3 to 10 PPB.  The statistical correlation was only 0.01, or once again essentially zero.

 

Conclusion

The facts do not support the Petitioner’s request to require shorter periods for nitrous oxide emission averaging, such as a 24 hour cap, or to add SCR pollution control equipment at Brunner Island.  We note the link to the report is on a Sierra Club website alongside its “Beyond Coal” campaign that counts down how many coal-fired power plants have been closed on the way to zero.  We suspect the Delaware and Connecticut Air Quality Divisions have responded to an advocacy group call for action to end the use of coal at Brunner Island.   It would not make economic sense to spend $600 million on Brunner Island for SCR on top of the $100 million on-going project to convert to the ability to co-fire with natural gas.  If the EPA grants the petitioner’s request the Brunner Island facility will simply convert 100% to natural gas and the Sierra Club can scratch off another coal plant.  However, electric customers will be worse off with higher winter time electric rates, and the lost reliability of having fuel diversity.  The environmental outcome for ozone comes out the same either way.

 

Notes:

1 – Press release from Four Corners Power Plant, Fairmount, NM showing 1636 MW capacity SCR project now under way will cost $635 million.  Brunner Island is about 5% smaller at 1549 MW.

2 – “Chemistry in the Sunlight”, NASA Earth Observatory, http://earthobservatory.nasa.gov/Features/ChemistrySunlight/

 

 

David T. Stevenson

Director, Center for Energy Competitiveness

e-mail: DavidStevenson@CaesarRodney.org

Phone: 302-236-2050

Fax: 302-827-4558