Our Perspectives on the Latest Issues
Amidst the impacts of the COVID-19 public health crisis, we have seen a significant decline in emissions of air pollution both nationally and in Pennsylvania. As our communities begin the journey to recovery, and emissions rise, we have a duty and an opportunity to protect Pennsylvanians—especially those that are substantially more vulnerable to COVID-19 and other respiratory diseases.
There is no silver bullet to address air pollution. In Pennsylvania, one possible path is a three-pronged approach that includes modernizing and extending our antiquated Alternative Energy Portfolio Standard (AEPS), strengthening our Act 129 energy efficiency law, and joining our neighbors throughout the Northeast and Mid-Atlantic in the Regional Greenhouse Gas Initiative (RGGI) currently being considered in Harrisburg. With these changes, we can finally begin to bring our energy economy into the 21st century.
A report by Massachusetts Institute of Technology researchers published in February concluded that Pennsylvania leads the lower 48 in premature death rate per capita from air pollution. We paid for this nefarious designation with 4,800 preventable deaths in 2018. While the study recognized cross-border air pollution impacts, it found that Pennsylvanians are largely doing this to ourselves.
As tragic as this is, this year may be worse—a Harvard study recently found that exposure to air pollution, particularly small particulate matter (2.5) dramatically increased the likelihood that those infected with COVID-19 would die.
The U.S. Energy Information Administration (EIA) projects an 11 percent decline in energy-related CO2 emissions this year due to stay-at-home orders across the nation. However, that is not a sustainable reduction and emissions are expected to jump 5 percent once we fully reopen. After the Great Recession in 2009, the benefits gained from temporary emission reductions began to quickly evaporate. Nationally, emissions from the energy sector declined by 7.2 percent in 2009 only to rebound by 3.6 percent the following year.
Those numbers were even larger in Pennsylvania—we experienced a massive 9.4 percent reduction but then a 4.9 percent rise in 2010. Our sluggish economy played a role in the 2009 – 2010 net reduction, yet the dramatic shift towards less-carbon-intensive energy sources was due primarily to the federal American Recovery & Reinvestment Act and the state Alternative Energy Portfolio Standards.
The Commonwealth’s Alternative Energy Portfolio Standards Act of 2004 requires that by 2021, 8 percent of electricity consumed in Pennsylvania originate from ”Tier 1” renewable sources, with one-half of one percent of that coming from solar power, and 10 percent from “Tier 2” sources, which sadly includes electric generation from dirty waste coal and other non-renewable sources. Once an aggressive standard 15 years ago, Harrisburg has allowed Pennsylvania to fall woefully behind as our neighbors in Maryland, New Jersey, and New York:
Our neighbors have outworked us to become leaders in the clean energy revolution. Significantly, our AEPS requirement plateaus after 2021—stifling the Commonwealth’s momentum of success. Even Virginia recently committed itself in March to be 100 percent carbon free by 2045. All the while we Pennsylvanians have seen other states with less land and less natural potential for renewables zoom past us.
For example, Pennsylvania has 6 times more land and receives more solar radiance than New Jersey, yet the Garden State has 3,180 MW of installed solar PV versus 491 MW in Pennsylvania. It is time for the General Assembly to once again spur renewable development and put Pennsylvania on equal footing with our neighbors.
Compounding the issue of our outdated AEPS is the imminent catastrophe heading our way as federal tax credits for renewables will be eliminated, or dramatically reduced, over the next 18 months. The fossil fuel industry benefits from tax breaks permanently written into the tax code, yet credits for renewables are provided for only a few years, if that long. Two renewable energy sub-sectors are at the top of the expected job growth list over the next decade (keep reading) according to the U.S. Department of Labor. Why should we build roadblocks to progress?
Regarding energy efficiency measures, the Commonwealth implemented Act 129 in 2008. This enactment created the Energy Efficiency & Conservation (EE&C) Program that has spurred utility rebates for purchasing energy efficient goods. Since its implementation, Act 129 has generated over $6.4 billion in net consumer benefits through the deployment of efficiency measures throughout Pennsylvania. In fact, the program requires not only that targets be cost-effective, but also makes that determination with a very restrictive test that does not even consider health and environmental benefits.
While this program achieved a modest 0.8 percent annual decline in energy consumption across the state, just as with the AEPS, Harrisburg has failed to keep pace with our neighbors leading the charge. New Jersey (1.5 percent), New York (2 percent), and Maryland (2 percent) have all realized the benefits their states recognize with more aggressive efficiency standards.
Expanding the EE&C Program is perhaps the lowest hanging fruit in Pennsylvania to reduce emissions. The program could easily be doubled or tripled at no net cost to ratepayers. Unfortunately, the program contains an arbitrary investment cap that is prohibiting the Commonwealth and its ratepayers from capturing the full potential of Act 129. The success stories of our neighboring states demonstrates what we are capable of if we get serious about energy efficiency.
On the horizon is the Regional Greenhouse Gas Initiative, a cooperative effort of 11 Northeastern and Mid-Atlantic states that establishes an annual CO2 emissions limit for most power plants and the cap decreases annually by 2.5 percent. Governor Wolf has issued an Executive Order directing the state Department of Environmental Protection (DEP) to craft draft regulations under the authority granted by the General Assembly in the Air Pollution Control Act (APCA).
The initiative provides a market-based solution allowing for pollution credits to be sold, ensuring that CO2 reductions occur from the most cost-effective sources and providing long-term market certainty to stimulate renewable energy deployment. Because the U.S. Congress has been unable to advance a RGGI-like proposal at the national level, states grew tired of waiting on Washington and instead took action to protect their citizens and modernize their economies and energy infrastructure.
Proceeds from the credits would be reinvested through Pennsylvania’s Clean Air Fund to further reduce air pollution by deploying energy efficiency and renewable energy, among other things. These investments have a significant multiplier effect, rippling through the states’ economies.
In 2017, RGGI states invested $315 million from the sale of pollution allowances that abated 8,300,000 tons of CO2 emissions by avoiding a whopping 13.9 billion kilowatt-hours (kWh) of electricity, or the equivalent of over 187,885,000 gallons of gasoline. CO2 emissions from RGGI states have been reduced by 50 percent since 2005, not to mention the reductions of mercury, nitrogen oxide, sulfur dioxide, and particulate matter. All of this has taken place as the gross domestic product (GDP) of RGGI states continues to grow faster than the national average.
The size of Pennsylvania’s generation sector is comparable to those plants that currently fall under the RGGI umbrella, so it is reasonable to conclude that similar benefits are likely. In 2022, the Commonwealth has proposed limiting CO2 emissions to 78 million tons, roughly equal to the 74 million ton adjusted limit for the combined RGGI states this year. In Pennsylvania the program is expected to generate $320 million in 2022 that will be reinvested in the state to promote renewable energy, energy efficiency, greenhouse gas abatement, direct bill assistance, and workforce training among other things.
RGGI’s 2017 environmental achievements discussed in the preceding paragraph would likely be similar to the benefits Pennsylvania would realize in 2022. After 2022, CO2 emission limits are decreased by approximately 2.5 million tons annually until 2030 when the limit reaches 58 million tons, or 25 percent below 2005 levels. Innovation and smart policies both clean our air and energize our economy as our country continues to speed away from coal. Virginia commitmented to RGGI this year, and now it is time for Pennsylvania to step up to the plate too.
Many people still think Pennsylvania is powered by coal, but that simply is no longer true. Coal’s role has been dramatically reduced because of the transition to natural gas generation. At the beginning of the gas boom, in 2004, Pennsylvania generated 55 percent of our electricity from coal. Fast-forward 15 years to 2019 and coal accounted for only 17 percent of electric generation. Natural gas during the same period increased from 5 percent to 43 percent of our electric generation portfolio.
In 2019 Pennsylvania’s largest coal plant, the Bruce Mansfield Plant operated by First Energy in Beaver County, retired two years earlier than expected after losing $90 million in 2017 and projecting a $104 million loss in 2018. Only five large coal plants remain in the Commonwealth, and they are also all nearing retirement. Simply put, coal-fired generation is not cost-competitive. It is on its way out and it is not coming back. We must now look forward, not back, and smooth the natural transition away from coal to cleaner renewable sources with programs like RGGI.
As we continually fight for cleaner energy, we also must be mindful of those impacted by this inevitable change and assist in the transition. The good news is that green jobs are here. Pennsylvania had 90,000 green energy jobs in 2018, up from 57,000 in 2014, ranking 11th nationally. In fact, the industry in Pennsylvania swelled 5 times faster than overall job growth in the state. The 2019 U.S. Energy and Employment Report (USEER) found that the energy efficiency sector had the highest job growth in the entire energy industry, posting 5.37 percent.
The Bureau of Labor Statistics found that—across the entire U.S. economy—solar PV and wind energy jobs are expected to grow at the fastest rate over the next decade. Renewable energy supports 855,000 jobs in our country, and USEER cited a lack of skilled workforce as the central constraint to growth. There is a clearly burgeoning job market starving for trained labor. Let us bridge the gap by joining RGGI and helping to train those affected by our natural shift away from coal instead of just leaving them out in the cold.
Throughout modern history, environmental initiatives have played a prominent role in bringing our economy back and preparing America to march forward, more resilient than before. As part of the New Deal, FDR created the Civilian Conservation Corps (CCC) in 1933 during the Great Depression. Also known as “Roosevelt’s Tree Army,” over 3 million Americans worked on environmental projects in the decade that followed. More recently, at the height of The Great Recession in 2009, the American Recovery and Reinvestment Act spearheaded the clean energy revolution.
We are once again afforded an opportunity to move Pennsylvania forward while promoting economic revitalization, protecting those with increased susceptibility to COVID-19, reducing our greenhouse gas emissions, smoothing labor’s transition away from coal-fired generation, and bringing our energy infrastructure into the 21st century.
The way in which we can achieve this tomorrow is by finally updating the Commonwealth’s AEPS and EE&C Program to align with our neighbors, and utilizing the market-based RGGI to reduce CO2 emissions and reinvest the Initiative’s proceeds.
It is once again time to step forward.