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Highlights of Clear Skies in New Jersey
- New Jersey sources would reduce emissions of SO2 by 62%, NOx by 63%,
and mercury by 78% due to Clear Skies.
- The health benefits in New Jersey would total $3.2 billion ($610 million
under the alternative estimate) and include 400 fewer premature deaths
(200 under the alternative estimate) and 700 fewer hospitalizations/emergency room visits for asthma.
- In addition, New Jersey would receive environmental benefits including
reductions in sulfur, mercury and nitrogen deposition, and visibility
improvements valued at $96 million for New Jersey residents who visit
National Parks nationwide.
- Clear Skies does not significantly impact electricity prices. With
or without Clear Skies, electricity prices in the electricity supply region
that includes New Jersey are expected to remain below 2000 prices.
Clear Skies: An Innovative Approach to Improving Human Health and the
Environment
Why Clear Skies?
- Air quality has improved, but serious concerns persist
- New Jersey's citizens suffer ill effects from air pollution, including
asthma attacks and premature death
- Electricity generation sector remains a major emissions source.
- Very cost-effective to control the power sector, relative to other
sources.
- Sources are concerned about upcoming complex and burdensome regulations
Advantages of the Clear Skies Approach
- Guarantees significant nationwide emissions reductions . beginning
years before full implementation.
- New Jersey sources would substantially reduce emissions of SO2, NOx,
and mercury.
- Delivers dramatic progress towards achievement of critical health
and environmental goals
- Uses proven, market-based flexible approach with incentives for innovation.
- Recognizes environmental needs as well as industry constraints, allowing
industry to better manage
its operations and finances while lowering risks to the public
- Sources are projected to install pollution controls to enable continued
reliance on coal
- Increases certainty across the board for industry, regulators, and
consumers
Under Current Clean Air Act Power Plants Would Face a Complex Set of
Requirements
For a larger image, click here.
Clear Skies Sets a Firm Timeline for Emission Reductions
The existing Title IV SO2 cap-and-trade program
provides an incentive and a mechanism to begin reductions upon enactment
of Clear Skies years before regulatory action under the current Act. |
2004: The NOx SIP call (summertime NOx cap in 19 Eastern States
+ D.C.)
2008: Clear Skies NOx Phase I (2.1 million ton annual cap assigned
to two Zones with trading programs)
2010:
- Clear Skies Hg Phase I (26 ton annual cap with a national trading program)
- SO2 Phase I (4.5 million ton annual cap with a national trading program)
2018:
- Clear Skies NOx Phase II (1.7 million ton annual cap assigned to two
Zones with trading programs)
- Clear Skies Hg Phase II (15 ton annual cap with a national trading
program)
- Clear Skies SO2 Phase II (3.0 million ton annual cap with a national
trading program)
Emissions in New Jersey under Clear Skies
Emissions in New Jersey (2020) would be significantly reduced from
2000 levels:
- 75% reduction in SO2 emissions
- 59% reduction in NOx emissions
- 77% decrease in mercury emissions compared to the base
case
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Emissions: Current (2000) and Existing Clean Air Act Regulations (base case*) vs. Clear Skies in New Jersey in 2010 and 2020
Note:
The base case using IPM includes Title IV, the NOx SIP Call,
NSR settlements, and state-specific caps in CT, MA, MO, NC,
NH, TX, and WI. It does not include mercury MACT in 2007 or
any other potential future regulations to implement the current
air quality standards or other parts of the Clean Air Act. Base
case emissions in 2020 will likely be lower due to state and
federal regulatory actions that have not yet been promulgated.
Clear Skies Health Benefits in New Jersey
By 2020, New Jersey would
receive approximately $3.2
billion in annual health
benefits from reductions in
fine particle and ozone
concentrations alone due to
Clear Skies. (see note 1) |
Improve Public Health
- Reduced ozone and fine particle exposure by 2020 would result in public
health benefits of:
- approximately 400 fewer premature deaths each year (see
note 1)
- approximately 300 fewer cases of chronic bronchitis each year
- approximately 800 fewer non-fatal heart attacks each year
- approximately 700 fewer hospital and emergency room visits each year
- approximately 47,000 fewer days workers are out sick due to respiratory
symptoms each year
- approximately 5,500 fewer school absences each year
- Reduced mercury emissions would reduce exposure to mercury through
consumption of contaminated fish, resulting in additional, unquantified
benefits for those who eat fish from New Jersey.s lakes and streams.
Counties Projected to Remain Out of Attainment with the PM2.5 and Ozone
Standards in New Jersey
Note: Based on 1999-2001 data of counties
with monitors that have three years of complete data. The base case includes
Title IV, the NOx SIP Call, the Tier II, Heavy-Duty Diesel, and Nonroad
Diesel rules, final NSR settlements as of early spring 2003, and state-specific
caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT
or any other potential future regulations to implement the current ambient
air quality standards or other parts of the Clean Air Act.
Clear Skies Would Help New Jersey Meet Air Quality Standards
- Currently there are 2 counties exceeding the annual fine particle standards
and 12 counties exceeding the 8-hour ozone standard.
- All of these counties are expected to be brought into attainment
with the fine particle standards under existing programs.
- Four of these counties are expected to be brought into attainment
with the ozone standard under existing programs by 2020.
- Clear Skies would significantly improve air quality in New Jersey further
and more quickly than what is expected from existing programs.
- By 2010, Clear Skies would bring Cumberland County (population approximately
150,000) into attainment with the 8-hour ozone standard.
- In addition, Clear Skies would reduce ozone and fine particle concentrations
in counties throughout the state and move the remaining ozone non-attainment
counties in New Jersey (Hudson, Middlesex, Hunterdon, Mercer, Camden,
Gloucester, and Ocean counties) closer to attainment.
Clear Skies Environmental Benefits in New Jersey
Clear Skies Would Provide Substantial Environmental Benefits in New
Jersey
In comparison to existing programs,
- Visibility would improve perceptibly.
- The value of this benefit for New Jersey is $96 million
- Sulfur deposition, a primary cause of acid
rain, would decrease by 15-30% across most of the state and 30-60% in
the southernmost portion of the state.
- Nitrogen deposition, another significant contributor to acid rain as
well as a cause of damage in nitrogen-sensitive forests and coastal waters,
would decrease by up to 20%.
- Mercury deposition would decrease by 5-15% across much
of the state and up to 30% in some areas.*
* These results are based
on modeling the ClearSkies mercury cap without the safety valve.
SO2 and NOx Emissions Reductions under Clear Skies
Emissions in states surrounding New Jersey would decrease
considerably. These emission reductions would make it much easier
for New Jersey to comply with the national air quality standards.
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Note: The base case in IPM includes Title IV,
the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO,
NC, NH, TX, and WI. It does not include mercury MACT in 2007 or any other
potential future regulations to implement the current ambient air quality
standards or other parts of the Clean Air Act. Base case emissions in 2020
will likely be lower due to state and federal regulatory actions that have
not yet been promulgated. Emissions projected for new units in 2020 are
not reflected.
Electricity Generation in New Jersey under Clear Skies
New Jersey’s sources are projected to reduce their emissions through
the installation of emission controls, rather than through a switch
from coal to natural gas.
- In 2010, 78% of New Jersey.s coal-fired generation is projected
to come from units with advanced SO2, NOx and/or mercury control equipment;
in 2020, the percentage is projected to increase to 93%.
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New Jerseys electricity growth is projected to
be met by increases in gas-fired and coal-fired generation.
Clear Skies does not significantly alter this projection.
- Electricity from coal-fired generation will increase
by 71% from 1999 to 202
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Emission Controls in New Jersey under Clear Skies
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Under Clear Skies by 2020,
- 9% of coal-fired capacity would install SCR
- 19% would install scrubbers
- 63% would install mercury control
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The major generation companies in New Jersey include:
- Public Service Electric & Gas Co.
- Atlantic City Electric Company
- Reliant Energy
Total coal-fired capacity in New Jersey is projected to be 1,864
MW in 2010
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Units in New Jersey Projected to Be Retrofitted
Due to Clear Skies by 2020
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Plant Name
|
Unit ID
|
Technology
|
Chambers Cogeneration Limited Partnership |
GEN1 |
Scrubber/ SCR |
Logan Generating Plant |
GEN1 |
Scrubber |
HUDSON |
2 |
ACI* |
MERCER |
1 |
ACI* |
MERCER |
2 |
ACI* |
* Retrofit was installed under Clear
Skies by 2010. |
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Notes:
1. Retrofits and total coal-fired capacity
apply to coal units greater than 25 MW.
2. BL England unit 1 is projected to be removed
from operation by 2005 with Clear Skies due to excess gas-fired capacity
in the marketplace, unless otherwise needed forvoltage purposes. The
recent overbuild of gas-fired generation reduces the need for less efficient
units operating at lower capacity factors. These units are inefficient
compared to other coal-fired plants and newer gas-fired generation.
Less conservative assumptions regarding natural gas prices or electricity
demand would create a greater incentive to keep these units operational.
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Electricity Prices in New Jersey under Clear Skies
With or without Clear Skies, retail prices in the
North American Electric Reliability Council (NERC) MAAC
region (the electricity supply region that contains
New Jersey) are projected to increase between 2005 and
2020.
With Clear Skies, retail prices are projected to be approximately
2.1 4.2% higher between 2005 and 2020 than in the absence of
the legislation.
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In 2000, the average retail electricity price in New
Jersey was approximately 9.1 cents/kWh, which was above
the average national retail price of pproximately 6.7cents/kWh.
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Note: The base case using IPM
includes Title IV, the NOx SIP Call, NSR settlements, and state-specific
caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury
MACT in 2007 or any other potential future regulations to implement
the current air quality standards or other parts of the Clean Air Act.
Base case emissions in 2020 will likely be lower due to state and federal
regulatory actions that have not yet been promulgated.
Costs and Benefits in New Jersey under Clear Skies
Clear Skies
.
Guarantees significant emissions reductions beginning years
before full implementation
Uses a proven and flexible market-based approach with incentives
for innovation.
Increases certainty across the board for industry, regulators,
and consumers
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Benefits Outweigh the Costs
- In New Jersey, Clear Skies is projected to cost approximately $26
million annually by 2020 while providing health benefits
totaling approximately $3.2 billion annually.
- The increases in production costs under Clear Skies represent only
a small percentage of total retail electricity sales revenue in New
Jersey.
- Retail electricity sales revenue in New Jersey was almost $6.4
billion in 2000.
- Adjusting these sales revenues by the same growth rate used for
the modeling of costs would result in revenues of over
$9.9 billion annually in 2020.
- Nationwide, the projected annual costs of Clear Skies (in $1999)
are $4.3 billion in 2010 and $6.3 billion in 2020; the nationwide benefits
of Clear Skies are expected to be over $113 billion annually by 2020.
- An alternate estimate projects annual health benefits totaling
$23 billion.
Note: Costs include capital
costs, fuel, and other operation and maintenance costs (both fixed and
variable) associated with the achievement of the emissions caps in the
legislation (for example, the installation and operation of pollution
controls). These state-level production costs are estimates; they do
not account for the costs associated with the transfer of electricity
across regions, nor the costs or savingsthat could be associated with
allowance movement between sources.
Notes on EPA's Analysis
-
The information presented in this analysis reflects
EPA's modeling of the Clear Skies Act of 2003.
- EPA has updated this information to reflect modifications:
- Changes included in the Clear Skies Act of 2003.
- Revisions to the Base Case to reflect newly promulgated rules
at the state and federal level since the initial analysis was
undertaken.
- The Clear Skies modeling results presented include the safety
valve feature
-
This analysis compares new programs to a Base Case
(Existing Control Programs), which is typical when calculating costs
and benefits of Agency rulemakings.
- The Base Case reflects implementation of current control programs
only:
- Does not include yet-to-be developed regulations such as those
to implement the National Ambient Air Quality Standards.
- The EPA Base Case for power sector modeling includes:
- Title IV, the NOx SIP Call, NSR settlements, and state-specific
caps in Vermont, Massachusetts, Missouri, Vermont, North Carolina,
Texas, and Wisconsin finalized before March 2003.
- For air quality modeling, the Base Case also includes federal
and state control programs, as well as the Tier II, Heavy Duty Diesel,
and Non-Road Diesel rules.
1. An alternative methodology
for calculating health-related benefits projects approximately 200 premature
deaths prevented and $610 million in health benefits each year in New
Jersey by 2020.
State information based on EPA's modeling of the Clear Skies Act
of 2002 is presented here for archival reasons.
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