Pennsylvania's "Alternative" Energy Law
PA becomes first state to include fossil fuels in an otherwise "renewable" portfolio standard.
Bill also sets precedent as first to promote dirty energy sources more than clean ones.
June 2007 Alert: Amendments to the Law Could Make Things Worse! Click Here for Details.
Despite an outpouring of grassroots opposition to Senate Bill 1030, Pennsylvania's state legislature voted on November 20th, 2004 to pass an "Alternative Energy Portfolio Standard" bill that could do serious environmental damage, while posing as an innovative clean energy bill. The bill was signed into law as Act 213.
What started as an effort to promote renewable energy in Pennsylvania has turned into legislation that supports fossil fuels and incineration.
The official website of the program administrator (Enerwise / Clean Power Markets) is here.
Quick Links to the Legislation:
Find out how your Senators and Representatives voted.
Act 213 requires:
Since the legislation was so poorly worded, many technical issues needed to be resolved as the law gets turned into regulations. Thankfully, with the help of our public comments, some of the worst loopholes will be closed. Others, however, persist and there are still many issues that aren't fully resolved.
Yearly "Alternative Energy" Obligation
| ||Tier I %|
|Tier II%||Solar PV %|
(Within Tier I)
|Year 1: 6/1/2006 - 5/31/2007||1.5%||4.2%||0.0013%|
|Year 2: 6/1/2007 - 5/31/2008||1.5%||4.2%||0.0013%|
|Year 3: 6/1/2008 - 5/31/2009||2.0%||4.2%||0.0013%|
|Year 4: 6/1/2009 - 5/31/2010||2.5%||4.2%||0.0013%|
|Year 5: 6/1/2010 - 5/31/2011||3.0%||6.2%||0.0203%|
|Year 6: 6/1/2011 - 5/31/2012||3.5%||6.2%||0.0203%|
|Year 7: 6/1/2012 - 5/31/2013||4.0%||6.2%||0.0203%|
|Year 8: 6/1/2013 - 5/31/2014||4.5%||6.2%||0.0203%|
|Year 9: 6/1/2014 - 5/31/2015||5.0%||6.2%||0.0203%|
|Year 10: 6/1/2015 - 5/31/2016||5.5%||8.2%||0.2500%|
|Year 11: 6/1/2016 - 5/31/2017||6.0%||8.2%||0.2500%|
|Year 12: 6/1/2017 - 5/31/2018||6.5%||8.2%||0.2500%|
|Year 13: 6/1/2018 - 5/31/2019||7.0%||8.2%||0.2500%|
|Year 14: 6/1/2019 - 5/31/2020||7.5%||8.2%||0.2500%|
|Year 15: 6/1/2020 - 5/31/2021||8.0%||10.0%||0.5000%||
Dates when Act 213 Takes Effect
|Electric Distribution Company||Exemption|
|Pike County Power and Light||31-Dec-2005||28-Feb-2007|
|Citizens Electric of Lewisburg||28-Feb-2006||28-Feb-2007|
|Wellsboro Electric Company||28-Feb-2006||28-Feb-2007|
|UGI Utilities Inc. – Electric Div.||31-Dec-2006||28-Feb-2007|
|Pennsylvania Power Company||31-Dec-2006||28-Feb-2007|
|Duquesne Light Company||31-Dec-2007||1-Jan-2008|
|West Penn Power Company ||31-Dec-2008||1-Jan-2009|
|PPL Electric Utilities, Inc.||31-Dec-2009||1-Jan-2010|
|Pennsylvania Electric Company||31-Dec-2010||1-Jan-2011|
|Metropolitan Edison Company||31-Dec-2010||1-Jan-2011|
|PECO Energy Company||31-Dec-2010||1-Jan-2011|
Note: Act 213 allows electric utilities to not have to comply with the law until after they're done charging you for deregulation-related "competitive transition charges" (i.e. in most cases, these are multi-billion dollar nuclear bailouts -- which happen to have been supported by PennFuture's CEO John Hanger when he was a PA Public Utility Commissioner). Notice that the largest utility companies are the last to have to comply.
There is an extensive implementation process where energy corporations and others have submitted comments to the Public Utility Commission, as they deliberate on how to implement the Act. These comments are in an extensive (and poorly organized) "docket" which you can find by searching for Docket Number M-00051865 here: http://www.puc.state.pa.us/general/search.aspx The comments on the proposed regulation can be found here: http://www.puc.state.pa.us/electric/electric_aeps_comments.aspx. The comments of the Independent Regulatory Review Commission are here: http://www.irrc.state.pa.us/download/256901-12-07Comments.pdf
Please see the detailed comments we submitted on the implementation of Act 213: Comments (round one) and Reply Comments (round two) and most recently, our comments on the proposed regulation. Our identification of troubling loopholes and our efforts to close them can be found in those comments and in our testimony before the Senate Environmental Resources and Energy Committee.
If you're seeking to learn from Pennsylvania's mistakes in order to develop a strong RPS policy for your state, please review our prior documents on PA's RPS legislation: background information and comparison charts on incentive mechanisms and technologies.
The Truth about Act 213:
Chronology of RPS bills in PA
The first Renewable Portfolio Standard bill to be introduced in Pennsylvania was Senate Bill 962. We wrote the bill and worked with Citizen Power to have it introduced. The bill was introduced on November 12th, 2003 by Democratic Senator Ferlo of Pittsburgh, the most progressive Pennsylvania senator. SB 962 is the cleanest and strongest RPS bill to be introduced anywhere in the U.S. To avoid the common pitfalls that come with the term "renewable," we called it the Clean Energy Portfolio Standard. Since the bill was introduced by a freshman Democrat, the Republican leadership buried it in the Senate Consumer Protection committee and never even allowed it consideration in the hearings that were later held on the issue.
In the weeks to follow, a bill developed by Citizens for Pennsylvania's Future (PennFuture) was introduced by Republican Representative Ross as House Bill 2174, but they didn't like the fact that it was placed in the House Consumer Affairs Committee, so they reintroduced it as House Bill 2250 after getting the Republican leadership to agree to place it in the House Environmental Resources and Energy Committee. The bill was called a "Renewable Portfolio Standard" as this type of bill is usually called in other states. It was rather dirty and compromised from the start, but was far better than what was to come. PennFuture touted their bill as "historic" and as if it were the first introduced in the state, ignoring our efforts to promote a clean version.
In mid-March 2004, Republican Senator Erickson introduced Senate Bill 1030. It was by far the dirtiest law of this kind in the nation, blatantly including waste coal burning and other fossil fuel sources. To get around the fact that it wasn't just a "renewable" energy bill, the bill was called the "Renewable and Environmentally Beneficial Portfolio Standards Act." This was later amended to be called the "Alternative Energy Portfolio Standards Act."
In April 2004, PA DEP Secretary McGinty released her own draft legislation, which was never formally introduced, but which was used to influence the process. From April through June 2004, the House and Senate both held hearings on the legislation. In September 2004, the House and Senate held hearings specifically on waste coal, which centered on this legislation.
Three amendments were made to SB 1030 as the bill neared passage in the last weeks of legislative session, between Nov. 9th and Nov. 17th, 2004. Each amendment made the bill even weaker and dirtier. In the final three days of the session, it was raced through the House and passed by Nov. 20th. Ten days later, Governor Rendell signed the bill into law (becoming Act 213) on Nov 30th, 2004.
Rendell signed the bill multiple times, making a point on December 7th, 2004 to visit the nation's largest waste coal pile to sign the bill into law at the location where one of the large new waste coal power plants is proposed. (See news coverage here and here.) Ironically, the citizen opposition we helped form around that proposed waste coal plant is the most organized and that power plant is the least likely of the three proposals to be built.
The environmental community largely opposed SB 1030 (now Act 213)
SB 1030 was opposed by: ActionPA, Citizen Power, Pennsylvania Environmental Network, Student Environmental Action Coalition, Green Party of Pennsylvania (and various county Greens groups), Sierra Club - Pennsylvania Chapter, PennEnvironment, State PIRGs, Clean Air Council, and a wide array of local grassroots environmental organizations throughout Pennsylvania. A few of these groups initially supported PennFuture's bills, but backed off later.
It was supported by PennFuture and their closely-allied Pennsylvania Council of Churches. No other environmental groups organized for the legislation other than a handful of professional energy development organizations (such as the sustainable development funds) which stood to gain financially from the legislation. Not a single grassroots or democratically-structured organization supported SB 1030.
The main forces pushing the law have been PennFuture, Governor Rendell and PA Department of Environmental Protection Secretary Kathleen McGinty. Rendell, McGinty and PennFuture CEO John Hanger all have high political ambitions and have seen this law as a key to promoting those ambitions. Coal interests and their many friends in the legislature (particularly Senators White and Musto) have also been key players in making the law.
Promoting Dirty Energy as Clean
Pennsylvania's Act 213 is the first law of its type to blatantly include fossil fuels. In all other states, this sort of law is called a "renewable" portfolio standard (RPS). In Pennsylvania, the term "renewable" was intentionally replaced with "alternative" so that technologies that are clearly non-renewable could be included.
Most "renewable" energy laws are bad enough, in that they include dirty (and often not-truly-renewable) energy sources through the definition of "biomass." Biomass has been defined to include the incineration of anything from landfill gas to crops to animal waste and even municipal solid waste (trash).
Act 213 includes these dirty so-called "renewable" energy sources and goes much further, allowing the burning of waste coal, gasified coal and coal-mine methane to qualify. Coal-mine methane is even allowed to compete with wind in Tier I (the less dirty tier). Through its inclusion of pumped storage hydropower (the use of electricity to pump water to the top of a dam just to let it back down later, wasting energy in the process), normal system power (primarily coal, nuclear and natural gas) can earn Tier II credits. The Public Utility Commission is interpreting the definition of "distributed generation" in Tier II to allow fossil fuels such as diesel or natural gas generators and other on-site, small scale electric generators, using any fuel. While it won't be used due to cost, the inclusion of fuel cells in Tier I is also a loophole that allows fossil fuels and other conventional power sources to count as if they were renewable energy.
Pennsylvania set a terrible precedent by including fossil fuels in an otherwise "renewable" portfolio standard law. Since the passage of Act 213, at least four other states (IN, OH, VA and WV) have considered including waste coal in RPS laws. It's just a matter of time until this or other fossil energy technologies are included in other RPS laws, further destroying the entire concept of "renewable" energy. PA is the #1 waste coal burning state, with 14 of the nation's 18 existing waste coal burners already located in the state. Pennsylvania Governor Rendell's administration has been aggressively promoting waste coal burning in PA. In 2005, Rendell's DEP permitted three huge new waste coal burning power plants. Rendell signed Act 213 at the site of one of these new proposed power plants. Rendell's promotion of dirty energy as something innovative has been part of his national political ambitions (possibly even seeking the Whitehouse). He's even touted waste coal in his nationally-televised speech at the Democratic National Convention in 2004. With the congressional democrats positioned to push through a national RPS law, and with Pennsylvania's pro-coal lobbying power, it wouldn't be a surprise if they manage to get waste coal and/or coal gasification into a national RPS law.
In Virginia, a similarly terrible precedent has been set to undermine the concept of a renewable portfolio standard. In 2007, they passed a weak, voluntary RPS as part of an alleged "reregulation" bill written by the giant energy utility, Dominion Power. The bill -- widely opposed by environmental groups for its support of nuclear power, new transmission lines and Dominion's proposed large new waste coal power plant -- slipped nuclear power into the RPS. It's carefully worded so that it's not technically considered "renewable." However, it's designed in such a way as to be treated preferably, making the RPS not apply to nuclear generation (as if it's already environmentally preferable).
Pennsylvania is first state to use a portfolio standard to promote dirty energy sources more than clean ones -- "Clean" tier nearly cut in half while dirty tier is tripled
Act 213 has two groupings of technologies, Tier I and Tier II. Tier I is supposed to be the "clean" and "renewable" category (though it's not all clean or renewable) and should be the bigger category, like it is in other states (such as NJ, MD and CT) where they have a two-tier Renewable Portfolio Standard (RPS). Tier II is where the filthy technologies are (waste coal burning, new coal plants, trash incineration, wood and paper mill waste incineration, etc.).
The Tier I share went from 15% by 2020 (in a house draft amendment that
never surfaced) to 12% in the first of three amendments made to SB1030, to 10% in an amendment made 6 days later to 8% in the final version adopted the same week. This means the share of Pennsylvania's electricity to come from the category that includes wind was nearly cut in half. At the same time, the Tier II share grew from 3.2% to 5% to 10% in the same 8-day span leading up to the Senate vote.
The legislature approved SB1030 with a filthy category larger than the supposedly clean category. Pennsylvania is the only state to have done this so far.
Where will the energy come from?
One large variable in how Act 213 will play out is the geographic scope of where energy sources can come from. The larger this territory, the more existing generation can be used to fill up the Tier I requirements with cheap hydroelectric, landfill gas and coal-mine methane power, shrinking the share left for new wind power. On the other hand, if mid-western states are included, that makes it cheaper to develop wind power and takes some of the pressure off of developing controversial mountain-ridge sites in Appalachia.
Act 213 states:
"Energy derived only from alternative energy sources inside the geographical boundaries of this Commonwealth or within the service territory of any regional transmission organization that manages the transmission system in any part of this Commonwealth shall be eligible to meet the compliance requirements under this act."
The main regional transmission organization (RTO) covering Pennsylvania is called PJM Interconnection. PJM was originally named after "Pennsylvania-New Jersey-Maryland" though it has also included Delaware, Washington, D.C. and a tiny slice of Virginia (the southern tip of the Delmarva Peninsula). It has since expanded to include the new "PJM West" (including most of western PA, all of West Virginia, much of Ohio, and parts of Michigan, Indiana, Illinois, Kentucky, Virginia and Tennessee) and -- more recently -- "PJM South" (most of the rest of Virginia and the northeast part of North Carolina). See the map of PJM's PJM expanded territory. The yellow "territory pending" portion of the map below is PJM South and has been formally approved since that map was created.
All throughout the process of developing a portfolio standard in Pennsylvania, the talk was all about PJM. However, technically, a small portion of western Pennsylvania is in the Midwest ISO (MISO) -- a regional transmission organization (RTO) that controls energy flows in all or parts of 15 states and 1 Canadian province (Manitoba, with huge amounts of hydropower).
Act 213 permits energy from anywhere within PJM or MISO to be used to meet the portfolio standard, meaning that even power from Manitoba, Canada or from eastern Montana can qualify..
- How the territory might shrink:
The geography is a matter of controversy. Even though the law is worded pretty clearly, the a 3-2 majority of the Public Utility Commissioners have decided that energy from the large Midwest ISO territory can only be used to meet the demand in the tiny slice of western PA that is in the MISO grid. Demand in the large PJM portion of Pennsylvania would be able to be met from anywhere in the PJM territory and the small portion in eastern PA (Pike County) that isn't in any RTO (PJM or MISO) would have to come only from within Pennsylvania. PennFuture supports this interpretation. All other commenters (including us) have agreed with the dissenting PUC commissioners (Fitzpatrick and Pizzingrilli) supported the interpretation that energy from anywhere within PJM or MISO qualifies anywhere in the state. The Pike County electric distribution company may be in a unique position to bring a commerce clause challenge to the PUC's interpretation of Act 213, broadening the geographic scope so that they aren't limited to power sources just within the state.
- How the territory might grow:
RTO Expansion: The Federal Energy Regulatory Commission (FERC) has been seeking since their December 1999 order to encourage formation of a handful of national regional transmission organizations (RTOs). They have put forth a vision of about 5 RTOs for the entire country and are currently working on helping PJM, MISO and other grid operators standardize their systems, to ultimately facilitate more mergers. They have sought to have PJM merge with the New York and New England grid operators to form a single Northeast RTO. Efforts have also been made to merge MISO with the Southwest Power Pool (SPP), which would have extended MISO as far as parts of Texas and New Mexico. To date, these efforts have fallen through, but by 2020, when the portfolio standards reach their goal, it's perfectly possible that additional mergers could make it easier for providers to meet the goals through imports rather than building new wind power.
Loopholes: Some Closed, Some Wide Open
Although we pointed out a long list of loopholes in testimony and with meetings with legislators, our concerns were nearly all ignored by the legislature, since they weren't very interested in details unless those details happened to be important to political heavyweights or corporate interests. As the sloppily-written law gets turned into regulations, many things are up for interpretation and it's a matter of trusting the corporate-friendly Public Utility Commission to make the judgments, with the input of comments from DEP, corporate interests, consumer and environmental advocates. Most of the comments are from corporate interests.
We've done well so far, in that about half of our dozens of comments were supported to date.
Perhaps the most significant victory is on the definition of "low-impact hydropower" in Tier I. Pennsylvania is the first to adopt a "low-impact" hydroelectric definition, setting some mild criteria for acceptable hydroelectric dams. Most states set a size limit of 30-60 megawatts (MW). SB 1030 initially had a size limit of 40MW, which was raised to 50MW in one amendment, then later amended to have no size limit. Since 50-69% of existing dams can already meet the low-impact criteria established by the Low-Impact Hydropower Institute, this could spell real trouble for wind power. There is a lot of existing hydropower that could fill Tier I, especially if the midwest (MISO) grid power can be used. If only about 20% of the hydropower in the MISO-PJM territory qualified as "low-impact," there will be little or no room left in Tier I for new wind power to compete. In effect, the entire beneficial side of Act 213 would have been undermined by a technicality in the hydro definition.
Act 213 has ambiguous language with regard to whether "low-impact" hydropower must be new or not. The "alternative energy sources" definition states explicitly that it includes "existing and new" sources, but part of the low-impact hydropower definition uses the term "incremental" -- indicating that perhaps it includes only new generating capacity at an existing dam. It doesn't define any date for which this new capacity must be installed, however. Thankfully, the PUC is interpreting the law so that the regulations will require that hydropower is only "low-impact" if the dam is permitted after 2/28/2005. This prevents massive amounts of cheap existing hydropower from flooding Tier I. See our comments and testimony for more details on the hydro issues.
Some of our comments on loopholes (or attempts to create new loopholes) were resolved in our favor, such as these:
- Solar thermal has been included in Tier I
- Penalties paid for not meeting the solar obligation can only be used to fund solar, not "alternative" energy in general.
- The PUC ignored DEP's attempt to have permission to redefine waste coal burners as they see fit.
- Commercial coal-bed methane extraction operations will not be permitted to qualify through the "coal-mine methane" term in Tier I.
- DEP's promotion of new dams as "incremental" was ignored by the PUC
- The waste coal industry's attempt to allow Tier II technologies to make up for shortfalls in Tier I was ignored
- The tracking system used to facilitate credit trading will have to disclose specific sources (this is only a partial victory, as most of our advocacy for thorough disclosure has been ignored)
Other issues we commented on didn't work out so well, such as:
- Force majeure definition is far weaker than we argued for
- Of the 6 types of double-counting (consumer fraud where the same energy can be sold twice or more), the law protects against only one of them (double-counting with other state RPS programs) and even that protection has loopholes. One type of double-counting (of emissions attributes) is even being supported by the PUC! This is discussed in detail in our comments and testimony.
- Our efforts to exclude the environmentally-racist Harrisburg incinerator from eligibility (since it shouldn't qualify as "existing" since it was dismantled when the law was passed -- and later replaced with a new incinerator) have been ignored so far.
- The law requires that all qualified alternative energy sources must meet "all applicable environmental standards" yet our efforts to make sure this is strictly interpreted have failed so far. The PUC has misinterpreted this horribly, which will enable many companies with environmental violations to remain qualified.
Compliance Loopholes may let Companies off the Hook
On the day of the Senate vote, SB1030 was amended last-minute at the request of DEP Secretary McGinty and the power utilities. In the process, a section called "force majeure" was completely rewritten. This section was originally written so that the obligation to develop "alternative" energy sources can be waived if there are "extreme deviations in expected renewable generation resulting from events that are impossible to control."
The section now allows the Public Utility Commission (PUC), on its own initiative, or at the request of an electric company, if they determine that there is not enough renewable energy available to meet the portfolio standard, to lower the obligation or recommend to the legislature that it be eliminated. This gives the PUC -- an agency dominated by power company interests -- the ability to simply allow corporations to get away with not building the "alternative" energy capacity required in the bill by lowering the requirement if they fail to obey the intention of the legislation.
The regulations being developed allow "force majeure" to be determined far too easily. PennFuture raises some good concerns about this in their comments. In our comments, we argue that any obligations that are relieved through force majeure should still have to be met, but at a later date.
In the short-term, the largest energy utilities in Pennsylvania are off the hook until 2008-2011, while the smallest ones must comply starting in 2007. This is because of the provision in Act 213 that ensures that the law doesn't apply to an electric distribution company (EDC) until their deregulation-related "competitive transition charges" expire. These are the charges on your electric bill to cover the "stranded costs" (bad investments, primarily in nuclear power plants) that companies didn't have paid off when deregulation kicked in. See the "Dates when Act 213 Takes Effect" chart at the top of this page for details.
How Does Act 213 Compare to RPS Laws in Neighboring States?
Governor Rendell has described Act 213 as "among the most progressive in the nation." PennFuture has claimed that Act 213 is stronger than RPS laws in neighboring states.
Unfortunately, Act 213 is, without a doubt, the dirtiest "RPS" in the nation and is not stronger than those in New Jersey, Maryland and New York (the only neighboring states with RPS laws when Act 213 was passed).
The following is a list of 20 ways in which Pennsylvania's Act 213 is weaker than RPS laws in neighboring states:
- Fossil Fuels: Pennsylvania is the first state to allow fossil fuels in a portfolio standard (with the occasional exception of fossil-generated hydrogen for fuel cells, which are allowed in some RPS laws, but are too expensive to compete anyway).
- More Dirty Than Clean Energy: Pennsylvania is the only state with a dirty tier larger than the "clean" tier.
- Easy Way Out: Pennsylvania may be the first to have a force majeure clause, allowing the PUC to reduce the law's requirements if companies fail to develop the proper amount of "alternative" energy. This clause could make it difficult for solar or wind power developers to get investors if the investors realize that the market provided in PA isn't guaranteed, like it is in other states.
- Hydropower: Pennsylvania has no size limit on hydroelectric power in Tier I. Maryland limits it to 30 megawatts (MW). New Jersey doesn't even allow hydro in Tier I and limits Tier II hydro to 30MW. New York also has stricter hydro requirements. Pennsylvania is the only state to allow energy from hydroelectric pumped storage to qualify (it's allowed in Tier II), regardless of where the electricity came from to pump the water uphill.
- Ocean Power: Maryland, New Jersey and New York all allow ocean-based energy sources. Pennsylvania doesn't.
- Chicken Poop: Pennsylvania is the only state to promote arsenic-spewing poultry litter incinerators without qualification. New Jersey requires that it meet a "sustainability" review; Maryland (the state where this has been proposed) puts it in Tier II and allows it only if it won't compete with Purdue's pelletization facility in Delaware -- a far more environmentally-preferable option to burning the waste.
- Burning Toxic Paper Pulp: Pennsylvania is the only state to use a portfolio standard to promote burning paper pulping industry liquors -- a toxic waste byproduct that can contain high levels of chlorine, creating dioxins when burned. New Jersey's law specifically bans it.
- Fuel Cells: Maryland and New Jersey's RPS laws allow fuel cells to be used only if their hydrogen sources are produced with renewable fuels. Pennsylvania and New York don't place any limits on fuel cell fuel sources, allowing them to come from natural gas or other non-renewable sources.
- Trash Incineration: Pennsylvania allows all existing trash incinerators to qualify and places no limits on them. New York (a state with twice as many trash incinerators as PA) doesn't allow trash incineration, recognizing that it's a source even dirtier than conventional coal power plants. New Jersey allows them, but places regulatory restrictions on them, including source reduction and recycling requirements. Maryland allows them, but ends their Tier II requirement in 2018, so that they're not subsidized forever. Maryland also places minimum recycling requirements on them. New Jersey and Maryland also have small-enough Tier II categories so that there's little room for incinerators from other states.
- No Dirty Tier II in New York: New York's RPS has no dirty "Tier II" category. Their Tier II category is a small customer-sited category that consists only of wind, solar and fuel cells.
- Larger new renewable requirement in New York: New York's RPS has larger requirements for new renewables. Their total RPS goal is 25% (they're already at 19%). Since all of the increase must be new renewables (with an exception for some existing ones if they prove that they're economically at risk of shutting down), this represents more new renewable energy than Pennsylvania's new law will create a market for.
- Public Purchasing System in New York: New York's RPS avoids the problematic market-based approach, by adopting a public, central procurement model, which is far more protective of consumers and which does away with the need for penalty fees for non-compliance.
- Penalty Fees to be Privately Managed: New Jersey and Maryland place penalty fees into public clean energy funds to be used to develop new renewable energy sources. Pennsylvania's law gives these penalty fees to a private cabal of corporate-friendly "environmentalists" to distribute for the development of "alternative" energy sources (which can include fossil fuels and other dirty technologies allowed in Act 213).
- Dirty Tier is a Floor, not a Ceiling: New Jersey and Maryland (and other states with 2-Tier RPS laws, such as Connecticut) allow Tier I resources to be used to meet the Tier II requirements, providing cleaner options to fill the dirty tier with. Pennsylvania doesn't allow this.
- No Extra Credit for Cleaner Energy: Maryland's RPS (and RPS laws in a few other states) gives extra credit for using the cleaner technologies within the Tier I requirement. Pennsylvania doesn't have this.
- Fails to Protect Green Energy Marketplace: New York's RPS has a separate track dedicated to supporting the voluntary green energy marketplace. Pennsylvania has joined New Jersey and Maryland in having a portfolio standard that allows double-counting with green pricing programs, threatening the viability of the voluntary purchasing market. After all, who'd wants to pay more for something that's already required by state law? The PA Public Utility Commission argues that the credit trading system will prevent this, but too many loopholes remain. The PUC is also explicitly allowing emissions attributes (like sulfur or carbon emission reduction credits) to be sold separately, which is like selling a car to a customer (the state) and selling the tires and engine again to another buyer. This should be considered consumer fraud. See our comments on double counting for more details.
- Fails to Prevent Double-Counting with Regulated States: New Jersey has limited protection against double-counting of energy sales from trash incinerators or hydroelectric dams in non-deregulated states like West Virginia where these energy sources are paid down by captive ratepayers.
- Cost Recovery: Pennsylvania has overly generous cost-recovery, allowing energy companies to pass through the costs of paying non-compliance fees and failing to protect consumers against unreasonable charges. Maryland, on the other hand, allows compliance fees to be charged to ratepayers only if they show that paying the penalty fee is the least cost option, that insufficient resources are available, or that a provider defaulted on supplying credits.
- Transparency: New York's procurement will be entirely publicly-run, subject to state freedom-of-information laws. Maryland's credit trading system will be managed in the public sector and the credit trading information will be made available to the public on the Internet. Pennsylvania's new law requires that the credit trading be administered by a private body (probably PJM) and requires public disclosure of a registry, but isn't subject to the full disclosure that comes with right-to-know laws. The PUC is allowing much of the data in this registry to be kept from the public, even more than a literal reading of Act 213 would permit.
- Wind Turbine Siting: Maryland's RPS law sets up a technical advisory group to develop recommendations on siting, operational, and monitoring criteria for wind-turbine siting in order to reduce bird and bat kills. Pennsylvania doesn't.
There are three ways in which Pennsylvania's "Alternative Energy Portfolio Standard" law is better than RPS laws in other states:
- Energy efficiency: Pennsylvania is the second state (after Hawaii) to include energy efficiency as an option.
- Low-Impact Hydroelectric: Pennsylvania is the first to adopt a "low-impact" hydroelectric definition, setting some mild criteria for acceptable hydroelectric dams. Unfortunately, the size limit in earlier versions of the legislation was raised from 40MW to 50MW and -- before passage -- was ultimately removed entirely. Now, even large dams, if they meet "low-impact" criteria, can be used to fill the Tier I requirements.
- Solar Share: Act 213 requires that 0.5% of Pennsylvania's energy come from solar by 2020 (if the force majeure clause doesn't kill this requirement). Arizona and Nevada have solar shares that are slightly higher (0.66% by 2007 and 0.75% by 2013, respectively), but Pennsylvania has the strongest solar share in the east (New Jersey's is 0.16% by 2008). Colorado is the only other state with a solar share so far (0.4% by 2015). Pennsylvania's large electric demand also creates the largest market for solar of these states. Unfortunately, Pennsylvania's solar share is the slowest-growing (it'll still be at 0.0203% in 2014 before making a 12-fold jump to 0.25% in 2015, then 0.5% in 2020).
Will energy efficiency undercut the dirty technologies in Tier II?
This may only be wishful thinking. The proposal by environmentalists to set a cost definition for energy efficiency never made it into Act 213. That proposal would have guaranteed that credits for energy efficiency would be so cheap that they can easily undercut the power generating competition in Tier II. It has yet to be seen whether the energy efficiency methods permitted by the PUC's Demand Side Management regulations will be so cheap that they can undercut a large supply of existing power sources in Tier II.
Efficiency measures will have to compete with power from existing large hydroelectric dams and trash incineration. These facilities already operate economically (hydro) or with captive waste markets (incinerators), making it possible for these facilities to charge as little of a premium as they must in order to undercut efficiency. Efficiency is likely to have some minimum real cost, which could make it difficult to undercut hydropower and trash incineration. New waste coal burners may also be able to undercut efficiency, since they are being built large enough that they can operate economically without subsidy, unlike the existing fleet of waste coal burners, which are small and uneconomical (more below).
Electricity suppliers -- the ones who will be choosing which of the Tier II options to use -- have an inherent conflict of interest that causes them to dislike efficiency measures. After all, these corporations make more money if their customers use more electricity. Energy corporations may choose to fill up their Tier II requirements with hydropower, trash incineration and waste coal, rather than bother with efficiency.
What to Expect from Act 213
There are many factors that could influence how Act 213 works out. Thankfully, the (hydropower-related) loopholes that would have completely prevented the Act from doing much to promote new wind power development were closed. This alone turned the bill from one that would surely do more harm than good into one that will at least still do some good.
To understand how a portfolio standard bill will work out and whether it's good or not, you have to look at three factors within each tier of the bill. Since each tier is its own menu that companies can choose from (and since they'll tend to pick the cheaper options from each menu), the factors are cost of generation, cleanliness of that generation and how much of that type of power generation already exists within the geography allowed in the Act.
The amount of power generation that already exists within the region will often be cheaper than building anything new. Companies are likely to fill up their requirements with the resources that they can already easily get, provided they aren't being used to meet other state RPS laws. In Tier I, there's a tiny amount of "low-impact" hydropower, a significant chunk of landfill gas, a modest amount of wind power (most of which is already being sold or used to meet RPS requirements), a tiny amount of coal-mine methane and little of anything else. We expect that once the bill's requirements kick in (mostly by 2011, when the big utilities have to start to comply), the markets for wind power and for burning toxic landfill gas will grow the most. These are the cheapest options (landfill gas being cheaper, but limited by how much is available). Some biomass incinerators and coal-mine methane will likely be supported as well. The others are likely to be too expensive to get much attention. While we are excited about how much wind power could be developed, we're very concerned about how the burning of landfill gas will be promoted, without even filtering out the toxins first -- all while subsidizing landfills over recycling and encouraging the mismanagement of landfill operations.
In Tier II, the cost of the credits will likely be really, really tiny, since there's already more power generation in place than required at the peak of the Tier II requirements. However, many of the waste coal burners (and perhaps some of the trash incinerators) would otherwise be closed by the peak demand created by Act 213 (in 2021). Act 213 will help ensure that power companies have the incentive to keep these facilities operating, as it would make it more economically necessary to keep them going. It could also prop up the large new proposed waste coal burning power plants (three proposed in PA, one in Virginia and smaller ones proposed in West Virginia). We're also concerned that it could help financially support the coal gasification (IGCC) plants proposed in Ohio and West Virginia. Large-scale hydropower (which means nearly all hydropower -- anything not defined as "low-impact" by the Act -- as there is no size criteria) could easily fill up a large portion of the Tier II requirement (around 40% if MISO grid isn't included; 100% if hydro from the MISO grid can be used anywhere in PA).
The trend in other states is to increase the RPS requirements after success in the initial years. If Pennsylvania expands its percentage goals, we could be in a lot of trouble, as our legislature is likely to continue to increase Tier II, especially once they can argue that it hasn't expanded the amount of power in that Tier. An expansion of Tier II will surely help new incinerators, coal and waste coal plants be built, as well as keep open old plants that should be made to close.
Will Act 213 really clean our air and water??
PennFuture has put forth unsupported and unsupportable claims about how Act 213 will "help clean our air and water." They repeat industry propaganda by stating that "the waste coal plants in Tier II will help reduce water pollution." They even go as far as saying that "there's nothing in Tier II that makes existing air emissions worse" and that "between now and 2020, Pennsylvanians would avoid approximately... 67 million tons of carbon dioxide; 59 thousand tons of nitrogen oxide; and almost 600 thousand tons of sulfur dioxide."
Act 213 will help to keep open 16 uneconomical small waste coal power plants in Pennsylvania and West Virginia that release 9.2 million tons of carbon dioxide, 55 thousand tons of nitrogen oxides, and 19 thousand tons of sulfur dioxide every year. On the basis of these three pollutants alone, it seems Act 213's support for waste coal will undo most of the supposed air quality benefits PennFuture claims it'll bring us.
PennFuture carefully worded their statement about making "existing air emissions worse." Apparently, it's OK to help keep existing filthy power generation operating, as long as it's not making things worse. Unfortunately, Act 213 can make air and water pollution worse as well.
This is because Tier II includes support for the following new pollution sources:
- New Coal-Burning Power Plants -- There are about 200-300 new coal-fired power plants planned in the U.S. Some of these are the "clean coal" kind that uses gasification. Act 213 includes "integrated combined coal gasification technology" in Tier II, which has been interpreted to mean integrated gasification combined cycle (IGCC). These types of coal burners will qualify for Tier II credits in Pennsylvania.
- New Waste Coal-Burning Power Plants -- There are 3 large new waste coal burners planned for western Pennsylvania communities, as well as proposals in West Virginia. The largest waste coal burner in the nation is proposed for Greene County, PA. See the section below for more info on waste coal.
- Paper Pulp Liquor and Wood Waste Burning -- Act 213 includes the following in Tier II: "by-products of the pulping process and wood manufacturing process including bark, wood chips, sawdust and lignin in spent pulping liquors."
Pulping liquors are toxic byproducts from pulp and paper mills that contain chlorinated chemicals, including dioxins. Burning this waste releases dioxins, formaldehyde and other hazardous contaminants.
Industrial-scale wood waste burners are also air-pollution sources and can have indirect impacts on the wood material supply, causing increases in logging on our state and national forests. The largest wood burning "biomass" power plant in the nation is currently planned for southeastern Ohio and has specifically been watching the policy developments in Pennsylvania, hoping to sell "green" power into the state. The power plant would be located near the Wayne National Forest and has listed logging operations in the forest as a possible source of fuel.
Tier II will also support existing trash incinerators. All three of the proposed portfolio standard bills in Pennsylvania started off with explicit prohibitions of the use of incineration. However, when SB1030 was amended, the prohibition was eliminated and existing trash incinerators were explicitly added to Tier II.
The Harrisburg incinerator is a nationally-known case of environmental racism and has drawn the attention of several national civil rights leaders, since it's located in a low-income, minority community, very close to the largest public housing projects in the region. For years, the incinerator was the most polluting dioxin source in the nation. The incinerator is now closed, but has being replaced with a new (larger) incinerator that is permitted to release up to 600 tons of air pollution each year, without using state-of-the-art pollution controls to limit fine particulate matter and without using the modern continuous emissions monitoring equipment that can track real-time data on air emissions of dioxin, mercury or other toxic pollutants. This new incinerator will qualify as an "existing" facility under Act 213. By supporting this economically-dismal operation, Act 213 will help it operate longer that it would otherwise.
Pennsylvania's largest trash incinerator is also located in a poor, African-American community (the city of Chester, just southwest of Philadelphia). It's one of the largest incinerators in the country. Chester is a textbook case of environmental racism that has literally been studied in college classrooms around the nation.
By indefinitely creating a market for power from trash incineration, Act 213 will enable all of these incinerators (and those in other states) to economically operate longer than they otherwise would.
Tier I technologies pollute, too
Tier I (the supposedly clean category) will also help promote new polluting industries. Although they are likely to represent a small proportion of the power generation used to meet the Tier I requirement, these technologies have pollution consequences much larger than their power generation would indicate. They are:
- Landfill Gas: Landfill gas is far more than methane. Landfill gas is contaminated with hundreds of toxic chemicals, including mercury and many chlorinated organics, which can form dioxins when burned. For these reasons, landfill communities in Pennsylvania have rejected the notion that burning landfill gas is "green" or "renewable" energy. Toxins ought to be filtered out and isolated prior to burning landfill gas. The economic incentives for landfill gas burning will cause more landfills to be managed for gas production. Since less than half of landfill gas can be captured in gas collection systems, this will result in more landfill gas escaping and poisoning local communities and the global climate. The new mega-landfill planned for Centre County would be Pennsylvania's first "bioreactor" landfill -- designed for intensive gas production.
- Coal-mine methane: Coal-mine methane is natural gas (a fossil fuel) that is trapped inside active or abandoned coal mines. A similar source, coal-bed methane has been linked with soil and well water contamination, increased risks of mine fires, buildup of explosive gases under buildings and homes, subsidence, noise pollution and decreased property values. Thankfully, coal-bed methane won't be allowed to be considered eligible under the coal-mine methane definition. Efforts to keep coal-mine methane in Tier II with the other fossil fuels failed. There is already an 88 megawatt power plant in Virginia burning gas from coal-mine methane and coal-bed methane. Presumably, only the portion from the mining operations will qualify. Additional coal-mine methane operations are likely to be developed in West Virginia, Pennsylvania, Indiana and Illinois. While burning this fossil fuel for energy is better than allowing the mine operators to vent it to the atmosphere, it's still a fossil fuel and it shouldn't compete with wind power. Also, providing a Tier I economic premium to coal-mine methane operations only helps make coal mining more profitable.
- Poultry waste incineration: A 39 megawatt power plant is planned for eastern Maryland that would involve incinerating poultry litter -- a waste stream that is documented to have high levels of arsenic from the use of arsenic-containing growth promoters used in the industry. Through a loophole in the "biomass" definition, this polluting power plant could become economically viable to build. Maryland placed this in Tier II and only allows it to be used if it won't compete with Purdue's pelletization facility in Delaware -- a far more environmentally-preferable option to burning the waste.
- Animal waste digesters: Pennsylvania is being invaded by hog factories. Power from burning the gas from anaerobic digestion of factory farm animal waste qualifies as Tier I. Using energy from factory farm animal waste digesters is not renewable (even Sierra Club says so). Promoting digesters could help maintain and expand factory farming operations in the region, while not resolving the underlying problem of excessive animal waste production.
- Burning of trees and crops: Power plants like the Viking Energy wood burner in Northumberland County, PA could count as Tier I, if the trees they burn are from tree farms. This is a facility that tried multiple times to burn tires.
About Waste Coal...
There are cheaper and cleaner alternatives for remediating waste coal piles that don't involve burning.
Act 213 will help promote the building of the 3 huge new waste coal burners planned for western Pennsylvania, including the nation's largest, planned for Greene County.
Burning waste coal puts out 15% more global warming pollution than normal coal-burning power plants do, as well as increased amounts of cancer-causing PAHs. It's hard to justify this as part of a "renewable" or "clean" energy bill when Pennsylvania is already responsible for 1% of the entire world's greenhouse gas emissions.
Thirteen of the 14 existing waste coal burners in PA are too small to operate economically. When their lucrative PURPA-era power contracts expire (2 already expired; the remainder expire between 2008 and 2020), they'll be losing money if they aren't propped up by the Tier II incentives in Act 213. Tier II is all about keeping dirty and economically non-viable waste coal burners operating when their power contracts run out. One plant has already reported to the legislature that they're losing $4 million a year now that they have to compete on the open market. They are now curtailing operations and only generating power when the electricity prices are highest. As the percentage requirements ramp up (and once the large utilities have to comply), it'll help ensure that these polluting, uneconomical plants stay open.
Waste coal burners release cancer-causing polycyclic aromatic carbons (PAHs) and other air pollutants. They turn every 100 tons of waste coal into about 85 tons of highly toxic, concentrated waste coal ash. This toxic ash is dumped in Pennsylvania communities without any liners to protect the groundwater and it leaches its toxins more readily than the unburned waste coal piles did in the first place.
Burning waste coal necessitates feeding more than 6 times as much mercury-contaminated fuel into a burner to produce as much energy as a similarly-sized coal burner. This mercury and many other toxic metals will ultimately poison the groundwater when the toxic ash is dumped throughout the state.
Waste Coal Ash Dump
Proponents of waste coal burning claim that it's the only viable solution to "removing" waste coal piles to protect groundwater from acid drainage from those piles. However, the ash that the waste coal is turned into has been documented to have exacerbated acid drainage problems at ash dumping sites in Pennsylvania and West Virginia.
Information on the alternatives to waste coal burning can be found on www.truthaboutgob.org and at www.energyjustice.net/coal/wastecoal/ (see the section on beach grass at the bottom of the page).
How did Waste Coal get into Act 213?
In mid-2003, when PennFuture was leading a process to draft an RPS law, they had accepted the "political reality" that waste coal will get into any RPS bill in the state because industry will make sure of it. It indeed became very clear later on that the legislature, dominated by pro-coal interests, was uninterested in passing any sort of RPS law unless waste coal was included. Instead of fighting this tendency and joining forces with the majority of the environmental movement, PennFuture went a different direction.
Privately, they took the position that they'd accept waste coal in the bill as long as it's not called "renewable." This caused different versions of the bill to replace the term "renewable" with "environmentally beneficial" and later, "alternative." Publicly, in order to hold onto the initial support from other mainstream environmental groups like Sierra Club, PennEnvironment and Clean Air Council and to court the support of students and others, they publicly denied that waste coal was in the legislation for as long as they could get away with such claims (until the words "waste coal" were blatantly used in the bill).
As early as summer 2003, the term "energy from waste" appeared in a draft of their legislation, which would ultimately be introduced late that year as House Bill 2250. The term originated from Frank "Chick" Tulli, Jr. To understand this, it's important to know who Tulli is.
Frank Tulli, Jr. was a Republican state representative who led the effort to make Pennsylvania the second state to deregulate its electric utilities after California. Electric utility deregulation is a position championed by PennFuture CEO, John Hanger who -- as a PUC Commissioner -- supported deregulation as well as the multi-billion dollar nuclear bailouts that came with it. Deregulation is an anti-environmental, anti-consumer policy that was advanced by Enron and which has backfired across the nation. Hanger and PennFuture continued for years to promote deregulation nation-wide (see Citizens for Pennsylvania's Future listed in support of the COMPETE Coalition in this 2007 press release), even after Enron, the California crisis, the northeast blackout and skyrocketing electric rates. Hanger and Tulli's mutual interests in this issue are likely to have something to do with their ongoing relationship... a relationship that led to PennFuture hiring Tulli's firm (which PennFuture described as a "Republican lobbying firm") to get their RPS bill through the legislature.
Since retiring from the legislature in 2002, Tulli has been the CEO of Greenlee Partners, LLC. Greenlee is a lobbying firm that lobbies for a long list of major polluting corporations. Tulli and Greenlee Partners both are listed with the state as lobbyists for Reliant Energy, owner of the world's largest waste coal burner, in Seward, PA -- and for Air Products and Chemicals, a large polluting chemical corporation based in Pennsylvania. Air Products is a member of ARIPPA, the waste coal trade association. Air Products owned and operated the Cambria Cogen waste coal burner from 1989 to 2001 and has continued to do contract engineering work for the waste coal industry. In 2002, Air Products was seeking to be the builder of the controversial Beech Hollow waste coal power plant proposed west of Pittsburgh.
With these sorts of connections and the political pressures and "realities" involved, it shouldn't be a surprise that the term "energy from waste" was used to serve as an acceptable code word for waste coal. In a new draft in August 2003, the term "renewable resources" was changed to exclude all "municipal solid, industrial, residual or any hazardous waste when it is burned for the generation of electric energy." This change ensured that the term "energy from waste" could mean ONLY waste coal, since all other wastes burnable for commercial energy production were excluded by that change. We began to expose this in October 2003 and wrote up an analysis in early 2004 showing through regulatory definitions how the term could only have meant waste coal.
Waste coal wasn't explicitly included in the legislation until March 15th, 2004, when Senate Bill 1030 was first introduced, with the title "Renewable and Environmentally Beneficial Portfolio Standards Act" ("environmentally beneficial" was the new code word for the inclusion of waste coal... they later replaced the clunky term "renewable and environmentally beneficial" with "alternative energy"). "Environmentally beneficial resources" were initially defined in SB 1030 as including "electricity generated from waste coal facilities which became operational after December 31, 1999." The definition was later changed to include all waste coal burning power plants, whether new or not.
For several months, PennFuture's various representatives would publicly deny that waste coal was in the legislation. They'd publicly state that they're opposed to waste coal and denied that it was even in the bill, even though we demonstrated that their "energy from waste" term could mean nothing else. They lied to students in order to get the student environmental movement to support their legislation, stating in a letter to the student movement that "H.B. 2250 as drafted does not allow for the burning of coal waste to generate electricity." They repeated similar lies in many forums until they could no longer pretend. Once waste coal was clearly in the senate version of their bill, PennFuture CEO Hanger stated in a public meeting in the state capital that he'd be "happy if Erickson's bill [S.B. 1030] passed." The next day, at a PennFuture conference, Hanger contradicted himself by stating that PennFuture is against waste coal in an RPS.
PennFuture continued to support SB 1030 to the very end, even after the few other mainstream environmental groups that supported the legislation stepped back and withdrew their support at the 11th hour. As SB1030 neared passage and in their self-promotion after the bill passed, PennFuture changed their tune on waste coal. Instead of publicly stating that they opposed waste coal in an RPS law, they began to parrot waste coal industry propaganda. They repeated lies about how waste coal burning would reduce water pollution, among other bogus claims.
In mid-2004, we started developing citizen opposition against the three large new waste coal power plants proposed in Pennsylvania. Two of the local citizen groups we helped form to oppose the power plants planned in southwestern PA approached PennFuture for assistance, but were turned down. PennFuture has a handful of attorneys on staff and they've opposed permitting of other types of polluting industries in the state, but they didn't have time to help undo some of the damage they've caused by making Act 213 possible.
Please call (215-743-4884) or email Mike Ewall with any questions.