Clear Skies in Virginia

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Highlights of Clear Skies in Virginia

• Virginia sources would reduce emissions of SO2 by 55%, NOx by 42%, and mercury by 42% by 2020 due to Clear Skies.
• The health benefits in Virginia would total $5.1 billion annually ($950 million under the alternative estimate) and include approximately 700 fewer premature deaths (400 under the alternative estimate) and 1,300 fewer hospitalizations/emergency room visits each year.
• In addition, Virginia would receive environmental benefits, including improved visibility, faster attainment of air quality standards, and reduced acid deposition.
• Clear Skies does not significantly impact electricity prices. With or without Clear Skies, electricity prices in the electricity supply region that includes Virginia are expected to remain below 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
• Virginia'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
• Virginia 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

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 Virginia with Clear Skies

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

Emission Reductions under Clear Skies

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

Clear Skies Health Benefits in Virginia

Improve Public Health

• Reduced ozone and fine particle exposure by 2020 would result in public health benefits of:
• approximately 700 fewer premature deaths each year (see note 1)
• approximately 400 fewer cases of chronic bronchitis each year
• approximately 1,000 fewer nonfatal heart attacks each year
• approximately 1,300 fewer hospital and emergency room visits each year
• approximately 78,000 fewer days workers are out sick due to respiratory symptoms each year
• approximately 4,500 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 Virginia's lakes, streams, and coastal waters.

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

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 air quality standards or other parts of the Clean Air Act.

Clear Skies Would Help Virginia Meet Air Quality Standards

• Currently there are 2 counties exceeding the annual fine particle standards and 14 counties exceeding the 8-hour ozone standard.
  • All of these counties are expected to be brought into attainment with the fine particle standards under existing programs by 2010.
  • All of these counties are expected to be brought into attainment with the ozone standard under existing programs by 2020.

• Clear Skies would significantly improve air quality in Virginia further and more quickly than what is expected from existing programs.
• By 2010, Clear Skies would bring Caroline County (population approximately 200,000) into attainment with the 8-hour ozone standard.
• 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.

Airsheds for the Southern Blue Ridge Mountains

• 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%.

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

Visibility Benefits in National Parks

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Clear Skies Environmental Benefits in Virginia

Clear Skies Would Provide Substantial Environmental Benefits in Virginia

In comparison to existing programs,

• Visibility would improve perceptibly throughout the state. In Shenandoah National Park, the visual range would increase by approximately four miles, resulting in $290 million in benefits under Clear Skies by 2020.
• Sulfur deposition, a primary cause of acid rain, would decrease by up to 60% across nearly the entire state, including Shenandoah National Park, providing greater protection for acid-sensitive streams.
• Nitrogen deposition, another significant contributor to acid rain, as well as a cause of damage in nitrogensensitive 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.*

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.

Electricity Generation in Virginia under Clear Skies

Current and Projected Generation by Fuel Type in Virginia under Clear Skies (GWh)
		Virginia'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, 85% of Virginia'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 88%.

Emission Controls in Virginia under Clear Skies

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

Notes:
1. Retrofits and total coal-fired capacity apply to coal units greater than 25 MW.
2. Potomac River units 1 & 2 are 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 Virginia 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 Virginia) 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.

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.

Costs and Benefits in Virginia under Clear Skies

Benefits Outweigh the Costs

• In Virginia, Clear Skies is projected to cost approximately $100 million annually by 2020 while providing health benefits totaling approximately $5.1 billion annually.
• The increases in production costs under Clear Skies represent only a small percentage of total retail electricity sales revenue in Virginia.
• Retail electricity sales revenue in Virginia was almost $5.7 billion in 2000.
• Adjusting these sales revenues by the same growth rate used for the modeling of costs would result in revenues of almost $8.8 billion annually in 2020.

• Nationwide, the projected annual costs of Clear Skies (in $1999) are $4.3 billion in 2010 and $6.3 billion in 2020; the nationwide benefits of Clear Skies are expected to be over $113 billion annually by 2020.
• An alternate estimate projects annual health benefits totaling $23 billion.

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

Notes on EPA's Analysis

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

1. An alternative methodology for calculating health-related benefits projects approximately approximately 290 premature deaths prevented throughout New England and $60 million in health benefits each year in Virginia by 2020.

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