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Wednesday, April 16, 2014

DEP's recommendations on 111(d): An EPA watcher's guide.

As we pointed out in our recent report, Clean Energy Wins: A Policy Roadmap For Pennsylvania, regulation of carbon pollution from power plants will likely be one of the most significant steps in the development of regulations to combat climate change and its impacts on human health and the environment. The Pennsylvania Department of Environmental Protection (DEP) has recognized this and, late last year, held a series of listening sessions to get input from both industry and the environmental community on forthcoming federal regulation.(PennFuture was happy to present testimony at those sessions.)

This new rule will likely be governed by Section 111(d) of the Clean Air Act (the Act), which sets out a framework for limiting pollution from of existing sources. Under the Act, the Environmental Protection Agency (EPA) will develop targets and guidelines, but it is ultimately the responsibility of the individual states to craft specific performance standards. In a June 25, 2013, memo, President Obama directed the EPA to issue draft guidelines by June 1, 2014, and final guidelines by June 1, 2015. Last week, the DEP took the initiative of sending the EPA a white paper it developed containing its recommendations for the draft guidelines. Rather than give PennFuture's perspective on the paper, I'll give some notes on what to watch for in the EPA's proposal.

There are a number of points in the DEP white paper which are not particularly controversial and to which the EPA may readily agree. For example, the DEP asserts that 111(d) is the most appropriate section of the Act under which to regulate this pollution. This is very much in line with President Obama's June 25, 2013 memo so one would not expect the EPA to take issue with this. The DEP also recommends that the eventual guidelines issued by EPA "can and should be less stringent than the [New Source Performance Standards] NSPS." While there is always cause to question "less stringent" standards, this seems within the intent of the Act, which specifically allows more leeway in the case of existing sources so that states may consider factors such as the remaining useful life of the plants. Similarly, the Act clearly gives the states the responsibility to establish the performance standards so it would not be surprising if EPA agrees with the DEP that the guidelines "should be developed in close consultation with the states."

Other areas of the proposal might raise some eyebrows should EPA agree. One, for example, is DEP's suggestion that states be allowed "to exclude certain electric generators that have environmental benefits beyond the CO2 emissions from those sources" which, they suggest, may include waste coal and coal bed methane facilities. The merits of that argument aside, DEP made a similar request to the EPA in the context of Maximum Achievable Control Technology (MACT) rules a couple years ago and EPA didn't take DEP's advice. While it wouldn't be particularly shocking if EPA reconsidered, it seems more likely that EPA will establish general guidelines and leave such specifics to the DEP, perhaps proposing to address the issue through a trading program.

There are suggestions, however, that, should EPA adopt, would likely signal the agency is prepared to make fundamental changes to its approach. One of these is a proposal for the EPA to amend its New Source Review regulations to redefine "major modification" to include increases in rate or intensity (i.e., lbs/MWh) rather than amount (tons/year). Again, without debating the merits of this, and without arguing the legal basis, it would be surprising if EPA made this change. The EPA's interpretation of the term "modification" in the context of the prevention of significant deterioration (PSD) program has already been litigated up to the Supreme Court as recently as 2007. While we can't rule out any changes, it would be surprising if EPA decides to revisit that issue so soon.

Rob Altenburg is senior energy analyst for the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Wednesday, April 9, 2014

Hey, Levin Furniture! That green sofa goes well with your LED lighting.

It's difficult to imagine all the resources that go into shopping for your new sofa...and I'm not talking about making the sofa. The transportation costs, warehouse lighting, and the refuse left over collectively add up to big energy usage -- and big costs. We're guessing that when you're standing in a furniture showroom, that's likely the last thing you're thinking about. However, for the people behind the scenes at one iconic western Pennsylvania furniture showroom, taking on these resource costs, and the environmental impact that comes with them, is part of the business culture.

Courtesy Levin Furniture

Here's a taste of what I'm talking about. Solar installations on three showroom facilities, a fleet of hybrid company cars, a comprehensive Light Emitting Diode (LED) lighting retrofit program, and the diversion of over 1,815,708 lbs. of waste. Sound like Google or some other high profile, green corporate entity? Nope. All this is from Levin Furniture, a stalwart in western Pennsylvania since 1920.  

All those initiatives must really eat into their profits, right? Let me tell you, this business knows how to make "green" out of green. We can all take a page from their playbook.

$130,000 in annual electricity savings

Let's start with lighting. As you regular readers well know, the age of LEDs has arrived and Levin Furniture is with the times. Over the course of 2012 and 2013, the company upgraded to LEDs and motion sensors at its Smithton, Pa. warehouse and 21 stores across the region. Now, when I say "upgraded to LED and motion sensors," I'm not talking about in just a few conference rooms at the corporate office. I mean, the entire warehouse is illuminated by LED lighting. This warehouse has forklifts busing furniture to and fro. And the coolest thing I witnessed on a recent visit is that if a forklift isn't in a particular section of the warehouse, then those lights aren't on. This turns the entire facility into something of a smart warehouse, lighting only what is needed, when it's needed. This approach has led to a 75 percent reduction in electricity load at the warehouse and a 78 percent reduction in the showrooms as well as associated savings in cooling costs thanks to the LED technology not giving off as much heat as the old style lighting. The other cool thing is that the LED lights don't need their bulbs change, so the savings in labor costs is estimated at 515 hours.

What about financial savings? The Levin warehouse will save roughly $130,000 per year. The 21 showrooms? Nearly $500,000. That will buy a lot of curios. Levin Furniture was also able to take advantage of about $275,000 in utility rebates via Act 129 programs.      

Since we're talking electricity, let's add in some solar. Levin was at the vanguard of the solar movement, installing solar on two Pennsylvania showrooms over 10 years ago. Recently, the company added another system at one of its Ohio stores, Pennsylvania's poor solar renewable energy credit (SREC) price likely driving them to seek that investment at an out-of-state location. Stay tuned, though. If I were a solar fan, I'd be looking up at a Levin Furniture roof -- you may be (solar) surprised. In the meantime, the PennFuture Energy Center will be working to hasten that business decision with improved state solar policies.  

Stay tuned as we cover the dollars and cents Levin Furniture makes from recycling in a subsequent blog post.

Evan Endres is project manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

"Drill, baby, drill" isn't the answer

In any given year, the energy market will look like some version of what you see in the 2012 Energy Information Administration (EIA) graph below. While the graph appears fairly complicated, it shows that all of the production and import of energy balances with the use and export of energy. It also shows how those various sources and users compare with thicker sections accounting for more energy.

Source: (click for full size image)

Pennsylvania produced about 3.86 quadrillion Btus (quads), or about 4 percent of the national energy consumption, in 2011, and used about 3.7 quads, or roughly 3.8 percent of the national consumption.

How does this compare to new domestic fossil fuel sources? Natural gas production from the Marcellus shale has been steadily increasing. Production in Pennsylvania was under 1.5 trillion cubic feet in 2011 but, by 2013, it was above 3.1 trillion cubic feet of gas, or an increase of about 1.6 quads. Phase IV of the Keystone XL Pipeline, much in the news recently, will expand the existing pipeline's capacity by 0.5 quads. Similarly, drilling in the Arctic National Wildlife Reserve (ANWR) is expected to yield about 1.2 quads per year.

Compare this to the Act 129 Statewide Evaluator's (SWE) Market Potential Study that found Pennsylvania could economically reduce annual residential energy usage by 35.4 percent. Including commercial and industrial sources, the average economical reduction could be 27.2 percent. If that performance could be replicated across the country, it would represent a savings of 18 quads per year. Even if only a quarter of the economic potential would be achieved, we would still be saving more energy than we gain from Marcellus, Keystone, and ANWR combined.

While these levels were determined to be economically achievable, the SWE's calculation on cost effectiveness didn't include economic benefits of improving public health and mitigating environmental damage. If those other factors are considered, even more reductions could be obtained in a cost-effective manner.

Rob Altenburg is a senior energy analyst with the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Thursday, April 3, 2014

The polar vortex: Gone but not forgotten

According to the U.S. Energy Information Administration's (EIA) Natural Gas Monthly for March 2014, the average price of natural gas sold to electric power companies spiked from $4.75 per thousand cubic feet (mcf) in December 2013, to $21.06/mcf in January 2014. Those average prices, however, hide significant spikes that occurred during January’s polar vortex, when gas was selling for around $100/mcf, driving wholesale electric prices over the $1,000 per megawatt hour cap. This resulted in our grid operator, PJM, getting a waiver to make additional make-whole payments to generators totalling about half a billion dollars across the PJM region.

Michael Kormos, executive vice president for PJM, testified before a Federal Energy Regulatory Commission (FERC) technical conference that, during the period of peak demand, 40,200 megawatts of capacity (22 percent of the region's total) was unavailable—much higher than the 7 – 10 percent forced outage rate that is typical during the winter.  About 23 percent of those forced outages, or roughly 9,300 megawatts, were attributable to interruption in natural gas supplies. While representatives of gas companies operating in the Marcellus Shale took the opportunity to advocate for additional pipelines, Mr. Kormos also pointed out that, “It was not the gas transportation issues but rather some of the gas procurement issues that had a greater impact on system operations, dispatch, and ultimately price.

Aside from the high prices, some generators were faced with ‘take or pay’ provisions where they would be forced to commit to purchases of gas prior to knowing whether or not they would be called on to operate. While PJM would normally rely on the results of the day-ahead energy market to determine what generating resources would run, they were left in an “untenable position” where if they did not order generation early, they couldn't guarantee that those generators could obtain fuel.

There are some indications that changes are on the way. PJM has announced plans to increase winter testing requirements, and acting FERC Chair Cheryl LaFleur has reported that FERC may consider “market fixes” that stakeholders may submit in their upcoming filings. FERC enforcement staff also reports that it is still investigating if any market manipulation took place.

We'll need to wait and see how any of these changes impact consumers. One big lesson learned is that that consumers need to carefully consider the risks involved in variable-rate contracts for electricity. The other obvious choice for consumers is to consider energy efficiency and conservation (EE&C) measures to lower their energy usage. As the Public Utility Commission's (PUC) statewide evaluator reported, existing EE&C programs have saved, on average, over 5 million megawatt hours per year.

Rob Altenburg is a senior energy analyst with the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

White House plan to reduce methane emissions

Back in June 2013, President Obama released his Climate Action Plan outlining a broad scope of actions aimed at adapting to climate change impacts, increasing international climate change efforts, and reducing greenhouse gas (GHG) emissions, including a directive to government agencies to develop methane reduction strategies. The overall goal of the Climate Action Plan is to reduce U.S. GHG emissions by 17 percent below 2005 levels by 2020.

Last week, the White House released the "Climate Action Plan: Strategy to Reduce Methane Emissions". Methane has a global warming potential more than 20 times greater than carbon dioxide and accounts for about 9 percent of U.S. GHG emissions. According to the report, the main sources of human-related methane emissions include: agriculture (36 percent), natural gas systems (23 percent), landfills (18 percent), coal mining (10 percent), petroleum systems (6 percent), and wastewater treatment (2 percent).

Here are some highlights from the report, which is broken into two sections, reducing emissions and measuring emissions:

Reducing Emissions
  • Landfills: 
    • New Landfills: The Environmental Protection Agency (EPA) is planning to propose updates to its current standards for new municipal solid waste landfills in the summer of 2014.
    • Existing Landfills: EPA will be issuing an advanced notice of proposed rulemaking (ANPR) by June 2014, aimed at reducing emissions from existing landfills. 
  • Coal Mining:
    • Reducing Coal Mine Emissions on Public Lands: The Bureau of Land Management (BLM) will release an ANPR in April 2014 aimed at increasing the capture, sale and disposal of waste mine methane from coal mines on federal lands.
  •  Agriculture:
    • Biogas Roadmap: In June 2014, the EPA, Department of Energy and U.S. Department of Agriculture (USDA) will release a Biogas Roadmap identifying voluntary actions to accelerate the adoption of biogas systems and other GHG reducing technologies.
  • Oil and Natural Gas Sector:
    • Regulatory Investigation: The EPA will be issuing a series of white papers during the spring of 2014 aimed at furthering scientific and technical understanding of methane emissions from the oil and gas sector.  If needed, the EPA will finalize additional regulations to limit these emissions by the end of 2016.
    • Minimizing Venting and Flaring on Public Lands: BLM will propose a draft rule later this year aimed at reducing methane flaring and venting on federal lands.
    • Quadrennial Energy Review (QER): The January 2015 QER will feature recommended actions that industry, state and federal government should take to limit methane emissions.
Improving Emissions Measurement 
  • Investing in New Measurement Technology Development: The DOE's ARPA-E program is preparing to launch a new methane program to reduce the cost of methane sensing.
  • Investing in the National Methane Monitoring Network: The President's budget has requested an $8 million increase in funding for this program for new equipment and activities.
  • Local and Regional Modeling Improvements: The DOE has funded projects at Penn State and Carnegie Mellon aimed at measuring and modeling emissions from the Marcellus Shale. The projects will begin in 2015 and end in 2017.
  • Improving the National GHG Inventory: The EPA will continue to refine its greenhouse gas reporting requirements for the oil and gas sector and use this information to develop a better understanding of related emissions.
Christina Simeone is the director of the PennFuture Energy Center and is based in Philadelphia.

Wednesday, March 26, 2014

PennSave program on energy savings performance contracting

The PennFuture Energy Center, along with its partners the Pennsylvania Chapter of the Energy Services Coalition, and the Pennsylvania Energy Partnership, have created a program known as PennSave to encourage energy efficiency through the use of Energy Savings Performance Contracting (ESPC), wherein building upgrades can be financed through long-term avoided energy costs instead of upfront capital expenditures.

As part of the PennSave program, we are presenting a free full-day conference for school district and municipal officials on April 24, 2014 to educate attendees about the nuts and bolts of performance contracting, with a focus on consumer protection.

The workshop will be presented live at the Capital Area IU in Summerdale, Pa. and simulcast at four locations:
  • Riverview IU 6 (Greensburg, Pa.)
  • Westmoreland IU 7 (Greensburg, Pa.)
  • Northeastern Educational IU 19 (Archbald, Pa.)
  • Montgomery County IU 23 (Norristown, Pa.) 

For more information and registration, please see the PennSave events page.

Rob Altenburg is a senior energy analyst with the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

PUC’s Act 129 report highlights the value of energy efficiency

Act 129 of 2008, which was signed into law by Governor Ed Rendell, required the Pennsylvania Public Utility Commission (PUC) to establish an Energy Efficiency and Conservation (EE&C) Program under which each electric distribution company (EDC) must adopt cost effective measures to reduce energy usage and peak demand. To meet reporting requirements under the Act, the PUC directed the Statewide Evaluator (SWE) to develop a comprehensive Phase I Final Annual Report covering 2009 – 2013 in lieu of the normal annual report due this year. On March 20, 2014 the PUC officially released that annual report.

Under this plan, the EDCs were to demonstrate a 1 percent reduction in consumption by May 31, 2011, a 3 percent reduction in consumption by May 31, 2013, a 45 percent reduction in peak demand, and a 10 percent reduction in both consumption and peak demand from governmental, educational, and nonprofit entities as well as other measures to low-income customers in proportion to their share of usage. As the table shows, all the companies met or exceeded their goals except for West Penn, which did not meet the 1 percent consumption reduction target by May 31, 2011, although it exceeded the 3 percent target by May 31, 2013.

Energy Efficiency and Conservation
For most consumers, the EE&C measures are the most visible part of the Act 129 program and the most likely to provide them direct benefits.

What measures did EDCs use?
In the residential sector, discounts or rebates on lighting products such as highly efficient CFL or, increasingly, LED bulbs were a popular choice, as were programs that provide incentives to purchase more efficient appliances including air conditioners and water heaters, and programs that assist with home energy audits or weatherization. (Specific programs vary by EDC and many are still available—click on your electric company for more information: Duquesne, PECO,  PPL, Met-Ed, Penelec, Penn Power & West Penn Power.)  Many similar programs applied to commercial, industrial, and governmental customers but EDCs also implemented different programs specifically tailored to the equipment and operation of those larger customers.

Because the purpose of Act 129 is to encourage cost-effective measures, the economics of these programs were carefully considered by the SWE. A Total Resource Cost (TRC) test was used that considered a program successful if “the net present value of the avoided monetary cost of supplying the electricity is greater than the net present value of the monetary cost of the energy efficiency and conservation measures.” In addition to this test, Act 129 also specifies that the total annual cost of each company’s EE&C plan may not exceed 2 percent of that company’s 2006 annual revenue paid by retail customers.

After applying these tests, the SWE found that companies remained under their individual caps, and their total spending of $1.76 billion dollars on the various EE&C programs over the life of the program resulted in $4.19 billion in avoided costs. This was a combined savings of over $2.4 billion.

As part of its evaluation, the SWE also looked at the potential energy savings that would be available throughout the state from 2013 through 2023. It found that over this period, a reduction of over 32 percent from the 2010 baseline was possible and a reduction of over 27 percent would be cost effective. Either of these scenarios would require some out-of-pocket expenses for customers so the SWE also looked at a scenario where the EDCs paid customers 100 percent of the incremental cost of the more efficient equipment and found that reductions of more than 17 percent could still be obtained. An even more modest program where EDC spending on incentives was similar to what was spent in program year two could still achieve an almost 8 percent reduction.

This report is not the only one that highlights the success of energy efficiency.  The American Council for an Energy-Efficient Economy (ACEEE), for example, found in a recent research report that energy efficiency is the cheapest energy resource available, costing an average of 2.8 cents per kilowatt-hour. This could be a fraction of the cost of non-renewable sources such as coal or natural gas.
Of course, even with the good news, it’s still possible to do more. PennFuture and its strategic partners just released the Clean Energy Wins policy roadmap report that highlights several options. These include removing the 2 percent cap that artificially limits efforts to implement otherwise cost-effective measures, and extending Act 129 programs beyond the electric sector to other sources such as natural gas, where citizens could further benefit from added efficiency.

Rob Altenburg is a senior energy analyst with the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Clean Energy Wins: A path forward for Pennsylvania clean energy policy

This past Wednesday, the PennFuture Energy Center released the Clean Energy Wins Policy Roadmap. The report provides nonpartisan education to gubernatorial candidates, policymakers, and the general public about the economic, job creation and environmental benefits of clean energy while identifying practical policies that can grow Pennsylvania's clean energy economy. 

“We worked with stakeholders in the solar, wind and energy efficiency industries on a local, state and national level to create these policy recommendations,” said Christina Simeone, director of the PennFuture Energy Center. “It's time for a meaningful conversation on energy in Pennsylvania, and that has to include truly clean energy resources and what they can do to grow the state's economy while safeguarding public health and protecting our air, land and water.”

The Clean Energy Wins initiative was launched in January 2014 with a goal of developing the roadmap report and educating Pennsylvania gubernatorial candidates, policymakers, and the general public on the benefits of clean energy. The initiative is also working to identify clean energy voters throughout the Commonwealth. “Pennsylvania was once a leader in clean energy development but we have fallen behind,” continued Simeone. “The roadmap report plots a course that will allow the state to regain its competitive advantage in renewable energy and energy efficiency as it unleashes its myriad benefits.”

All too often, the energy conversation in Pennsylvania is co-opted by fossil fuel interests including natural gas and coal,” said Cindy Dunn, president and chief executive officer of PennFuture. “The 'energy independence' argument falls short when our leaders are looking to export natural gas, and our air and water continue to be negatively impacted by fossil fuel extraction, posing ever greater risks to public health. Renewable energy and energy efficiency must have a seat at the table, and a majority of our citizens agree."


To check out the full report, go to There, you can add your name to our Clean Energy Wins campaign and tell us why you are a clean energy voter. You will also receive updates from the campaign, including stakeholder events that will take place later this year.

Andrew Sharp is PennFuture's director of outreach and is based in Philadelphia. 

Thursday, March 20, 2014

PJM State of the Market report

PJM Interconnection is the regional transmission system operator (RTO) that runs the electricity grid serving 61 million people across 13 states, including Pennsylvania. Last week, PJM’s independent market monitor (i.e. Monitoring Analytics) issued its annual State of the Market report for 2013. This report focuses on assessing whether PJM’s various markets and participants are functioning, with a special emphasis on fostering competition.

In general, the market monitor (MM) found the state of PJM’s markets to be good, but identified several areas of ongoing concern. Some of these issues are listed below.

·       Capacity Market Price Signals. The MM believes the capacity market prices are artificially low, resulting in failure of the market to send the price signals needed to incent new generation builds and provide for continued operation of existing units. 

·       Substitutability of Resources. The MM identified the need to establish a consistent definition of capacity resources that requires full substitutability among all capacity resources. Specifically, that capacity resources imported from outside of PJM have greater integration between RTOs (e.g. pseudo tie) to PJM in order to be comparable to internal capacity resources. For demand response (DR) resources, substitutability would require DR to bid into day-ahead energy markets, be available on a year-round unlimited basis, and be subject to the same price caps as traditional generation.

·       Physical Resource Requirement. In order to further ensure substitutability, the MM recommended that all capacity resources be physical resources (as opposed to prospective resources). This would also remove the incentive for participants to buy out their capacity positions in incremental auctions.

·       Enhanced Information and Transparency. The MM maintains that market participants need more access to information in order make rational decisions.  Specifically, the MM called for greater transparency on sources of energy uplift charges (i.e. the credit paid to market participants to ensure resources are not required to operate for PJM at an economic loss).

MM had many additional recommendations that can be found in the State of the Market report.

Wednesday, March 19, 2014

Telsa Supercharger Challenge

Here's a reader challenge: The first Pennsylvania Tesla owner to send us a picture (or video) of themselves stopping to recharge at Pennsylvania's first Tesla Supercharger station in Somerset, Pa. will be featured in a Re: Energy blog post and will be treated to a Primanti's sandwich courtesy of this clean energy blogger. Bonus points (an extra order of Primanti fries) if you're recharging on a trip between Pittsburgh and Harrisburg, or Pittsburgh and Philadelphia. I am very serious about this. Here's my email address: endres at pennfuture dot org.

Tesla Supercharger Located in Somerset, Pa. Courtesy Tesla Supercharger.
Okay, this challenge may not pertain to the majority of our readers, yet. But with all the "Tesla talk" out there, including the New Jersey Governor's boob move to toss Tesla showrooms, the pending Tesla battery mega factory (shouldn't that come to Pennsylvania?), and all the Telsa stock price stories, it seemed like a good time to remind Pennsylvanians that we do have skin in the game. Tesla's plans have always included the Keystone State. Not only do we have a Tesla showroom at the King of Prussia mall that opened in 2013, but we now have our very own contribution to the Tesla Supercharger Network of fast charging stations, located right in the wind farm corridor of Somerset, Pennsylvania.
The Tesla Supercharger network is designed to allow the all electric Tesla Model S vehicles to criss-cross the U.S. without having to stop to beg for an outlet. Believe it or not, the Supercharger Network is free for Tesla owners, who can expect to wait about 40 minutes to charge up and then be on their way to another 265 miles of gasoline-free drive time. There are currently 80 operational charging stations in the U.S. including the one in Somerset. By the end of 2014, Tesla plans to have at least six more Supercharger stations in Pennsylvania. Click the map above to learn more.

To the Pennsylvania Tesla owners out there, I await your email.

Evan Endres is project manager for the PennFuture Energy Center and is based in Pittsburgh.

DEP Secretary Chris Abruzzo speaks on Department priorities

On March 18, 2014, Department of Environmental Protection (DEP) Secretary Chris Abruzzo spoke at Widener University School of Law about the Department’s goals and accomplishments. The talk was filmed by PCN, so I won’t go into a detailed list of everything the Secretary said. Instead, I’ll highlight a few items that impact the energy sector.  

Expanding the Ozone Transport Commission
Ozone Transport Commission States 
Secretary Abruzzo highlighted that Pennsylvania Joined eight other states to petition the Environmental Protection Agency (EPA) to include nine additional upwind states in the Ozone Transport Commission (OTC). While not likely to garner much public attention, this is an important issue, and the administration deserves credit for taking a stand. The OTC was created under the Clean Air Act and, as an OTC state, Pennsylvania’s facilities often must meet more stringent emissions standards than similar facilities in Ohio, West Virginia, and our other upwind neighbors. This is particularly problematic as the PJM power grid and the neighboring MISO grid includes many of those states. The grid interconnection allows lost capacity from deactivation of power plants in Pennsylvania to be replaced by generation from dirtier power plants upwind. This also forces our power plants to compete with plants that do not need to spend as much on emissions controls—effectively driving the cleaner facilities out of the market. Extending the OTC will not solve all our air pollution issues, and there is a lot more that can be done, but it will help level the playing field. This is a great example of how pollution control can benefit both the environment and the local economy.

Carbon pollution issues
A similar situation could occur with carbon pollution. Secretary Abruzzo deserves recognition for making a clear statement that human-induced climate change is real, and he also raised an important point that this is an area that lends itself to national standards. It is true that the deactivation of coal-fired power plants in Pennsylvania will not achieve meaningful reductions in carbon pollution if those emissions are simply shifted to coal-fired power plants in other states. National standards will help this situation, and we will have a lot more to say about this as the 111(d) process moves forward. But we would also point out that we don’t need to wait for such standards to make considerable progress. There are other cost-effective choices: Strengthening existing programs such as the Alternative Energy Portfolio Standard (AEPS) would guarantee lost capacity is replaced by clean and renewable energy. Increasing the energy efficiency and conservation targets under Act 129 would address lost capacity by reducing demand. Hopefully, the Corbett administration will recognize that this is another opportunity to mitigate job losses and benefit both the environment and the economy.

Marcellus shale studies
Secretary Abruzzo also stressed a number of ongoing projects where Department staff are investigating various environmental issues. From an energy perspective, the work related to the Marcellus shale is probably the most significant of these. For example, the Secretary mentioned the long-term air monitoring study related to emissions from Marcellus shale drilling, and the ongoing studies surrounding Technologically Enhanced Naturally Occurring Radioactive Material (TNORM) from drilling operations and its proper disposal. Both of these address critical issues with the potential for wide ranging impacts, and the Secretary and Department deserve credit for the work they are doing. However, an administration that wants to claim they use fact-based decision making should have waited for the outcome of those studies before announcing plans to expand drilling in the vicinity of state parks and forests. This would admittedly delay the additional drilling, but we would have added knowledge regarding impacts. Further, with gas prices expected to increase, any delay will only result in the Commonwealth holding more valuable resources.

While there are certainly additional administration actions that are worthy of praise or criticism, those listed above show that there is potential to find common ground between environmental and fiscal issues. Hopefully, the Secretary and administration will continue to listen to the public and the environmental communities and not miss the opportunity to do more.

Rob Altenburg is a senior energy analyst with the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Wednesday, March 5, 2014

AFIG your fleet: Alternative Fuel Vehicle Grants available

The Pennsylvania Department of Environmental Protection (DEP) is again offering funding for Alternative Fuel Vehicles and related projects through the Alternative Fuels Incentive Grant (AFIG) program. Approximately $8 million will be available to fund alternative fuel projects in 2014 and 2015. School districts, municipalities, nonprofits, corporations, and LLCs are invited to apply.

Funding is available to cover up to 50 percent of  the incremental cost for retrofit or purchase of five (5) or more fleet vehicles. Eligible technologies include electric, natural gas -- including compressed natural gas (CNG) and liquified natural gas (LNG), biofuels, alcohol, hydrogen, and propane. For natural gas technologies, vehicles must have a gross weight of 26,000 lbs. or less. A single applicant cannot exceed $250,000 in program benefits.
Courtesy US Department of Energy, NREL
Organizations that cannot meet the five (5) vehicle quota are encouraged to partner with other entities to meet the requirement and file joint applications.

Another funding category is for "Innovative Technology Project." Under this category, an organization could receive matched funding up to 50 percent of the project cost. Projects must be innovative technologies or advanced research and development projects that are expected to result in commercial application. An example would be a new type of electric vehicle charging platform which would be the first deployment of this type of technology in Pennsylvania and has not had significant commercial success elsewhere.

Want to learn more? Attend the Eastern Pennsylvania Alliance for Clean Transportation workshop in Willamsport, March 26. (The Eastern PA Alliance for Clean Transportation was formerly known as the Greater Philadelphia Clean Cities program)

Evan Endres is a project manager for the PennFuture Energy Center and is based in Pittsburgh.

PGW's sale raises big questions on LNG

The City of Philadelphia recently selected UIL Holdings’ $1.86 billion offer as the winning bid for the municipally-owned Philadelphia Gas Works (PGW). The sale must be approved by Philadelphia City Council and the Public Utility Commission (PUC). 

According to StateImpact, UIL would "take over the 178-year-old natural gas distribution company, keep rates flat for three years, offer jobs to PGW’s roughly 1,650 employees, maintain programs for low-income residents and seniors, and replace aging cast-iron pipes."

So why would a company pay almost $2 billion for an aging utility in a city with high rates of poverty and static population growth? Two words: Marcellus. Shale. 

Bidders were intent on acquiring PGW not only for its retail utility business, but also for its Liquified Natural Gas (LNG) facilities along the Delaware River and its proximity to Pennsylvania’s rich shale play. 

But before the city moves forward with any sale, lots of questions need to be answered. Both the city and UIL must explain plans for the utility and its LNG infrastructure -- and how those plans will affect safety, public health, the environment, and gas rates.  

One possibility is particularly troublesome.

Many industry insiders, including former Pennsylvania DEP secretary Michael Krancer, believe that PGW’s Port Richmond LNG facility is well positioned to be turned into an LNG export facility. The City's brokers at JPMorgan also believed it was a selling point.

The LNG export opportunity was also discussed in UIL's March 3rd investor webinar announcing the PGW acquisition, where UIL's CEO responded to a question about the company's interest in LNG exports by saying, "That's [LNG exports] a potential.  I think the City, with their energy hub, is considering that.  The LNG facilities we have can gasify and liquefy.  We don't have a loading facility right yet, but that could be something that - I'm not sure we'd be developing that, but that is something that has potential for export."

Photo credit: Flickr user Lens Envy

This would mean fuel-laden super-tankers regularly making the 100-mile trek up and down the Delaware River to Philadelphia’s Port Richmond neighborhood, shutting down bridge and maritime traffic and potentially costing taxpayers $80,000 per trip for police, fire, coast guard and other security personnel.

LNG is a compressed, highly volatile liquid form of natural gas. According to security experts and the federal government, LNG facilities -- especially LNG tankers -- pose significant safety, public health and environmental concerns.

In 2006, Philadelphia City Council passed a resolution by a 12-2 vote opposing an LNG import shipping terminal, while expressing 
grave security concerns:

“It is difficult to imagine a worse location for an LNG shipping terminal than Port Richmond," the resolution stated. "The proposed terminal would require loaded LNG tankers, on a regular basis, to travel along the Delaware River close to areas of high population density, close to the Philadelphia International Airport, close to refineries, close to the professional sports stadiums and the large crowds those stadiums attract, close to Center City Philadelphia, and close to the housing, commercial and institutional development the City of Philadelphia and the City of Camden have attracted and seek to attract to their waterfronts."

The LNG tankers -- nearly three football fields in length and 5 stories high -- are considered enticing terrorist targets in densely populated areas because an explosion could cause catastrophic damage. (Some studies estimate that a tanker explosion would burn anyone within a mile radius, while others suggest an explosion range of ⅓ of a mile.)

A release of LNG could cause an cryogenic freezing and asphyxiation, in addition to flammability and combustion concerns.

Beyond safety issues, exporting natural gas will also raise gas prices domestically -- meaning that Pennsylvania’s residents and businesses will bear the environmental harms and risks of an LNG export market without enjoying the economic benefits of low gas prices.

According to the U.S. Energy Information Administration, increased LNG exports will lead to (1) higher domestic natural gas prices, (2) increased domestic natural gas production (3) reduced domestic natural gas consumption (causing a shift from natural gas electricity generation towards coal-fired generation), and (4) increased natural gas imports from Canada via pipeline.

A Port Richmond export facility would likely result in increased drilling in Pennsylvania, higher natural gas prices for consumers, increased vulnerability to security threats stemming from the movement of dangerous and highly volatile LNG, and increased environmental impacts from the development, processing and shipment of natural gas.

Pennsylvanians have been told that development of shale gas will lead to greater energy independence and gas price reductions. If we export it to other countries, that rationale goes out the window.

Thus far, UIL hasn't said much about its plans for PGW. The potential sale of PGW deserves robust public scrutiny and should not be rushed. Philadelphians must know much more about UIL's plan for the utility before any decisions are made by City Council and the PUC. 

Andrew Sharp is PennFuture's Director of Outreach and is based in Philadelphia.