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Highlights of Clear Skies in Arizona
- Arizona sources would reduce emissions of NOx by 63%, and mercury
by 69% by 2020 due to Clear Skies. SO2 emissions remain unchanged,
- The health benefits in the West would total $8.6 billion annually
($1.6 billion under the alternative estimate) and include approximately
1,100 fewer premature deaths (600 under the alternative estimate)
and 2,500 fewer hospitalizations/emergency room visits each year.
Note:
For the purposes of this analysis, the West includes all states
that would be affected by the Zone 2 cap for NOx under Clear Skies.
These states are WA, OR, CA, UT, AZ, ID, MT, WY, CO, NM, TX, OK,
KS, NE, ND, and SD.
- In addition, Western states would continue to enjoy good air
quality and visibility even in the face of increasing demand for
electricity.
- Clear Skies does not significantly impact electricity prices.
With or without Clear Skies, electricity prices in the electricity
supply region that includes Arizona 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
- Arizona'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
- Arizona sources would reduce or hold the line on 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 publics
- 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)
Clear Skies Builds Upon the Work of the WRAP
Clear Skies Western
(Zone 2) States
Note: Yellow
states are states involved in the WRAP voluntary emissions
reduction program.
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- Clear Skies is designed to support the WRAP goals and process;
in addition to a national constraint on SO2, the bill ensures
that the WRAP's emissions reduction goal for nine states is achieved:
- If for any reason the regional reduction goal set by the
WRAP for 2018 (271,000 tons for the power sector) is not achieved,
a separate WRAP cap-and-trade program is triggered to ensure
that the regional reductions are preserved.
- This special cap-and-trade program is based on the framework
established in the WRAP process.
- This special cap can also be triggered by 2013 if States
determine there is sufficient evidence that the target will
not be met by 2018.
The West Faces Unique Challenges
- Environmental effects of power plant emissions - including visibility
impairment and acid deposition - are broadly distributed
- Increasing ground-level ozone concentrations in national parks
- Particle-related haze in national parks and wilderness areas
- Nitrogen deposition in high elevation ecosystems (e.g., Colorado
Front Range)
- Brown clouds in major cities
- Few western non-attainment areas are due to stationary source
emissions
As the West Grows, Clear Skies Protects Human Health and the
Environment
The
West Will Continue to Grow...
- Population is projected to grow more than 20% from current levels
by 2020
- Electricity demand is expected to grow more than the national
average
- More than 10% over national average in the Pacific States
- More than 30% over national average in the Mountain States
...While
the Environment Is Protected
- Clear Skies would protect air quality by lowering or halting
increases in air emissions throughout the West from today's levels:
- Prevent degradation of visibility in parks.
- Help counties remain in attainment with health-based air
quality standards, reducing the burden on state and local
governments.
- Ensure nitrogen deposition does not increase and reduce
mercury deposition.
Emissions in Arizona under Clear Skies
Emissions in Arizona (2020) would be significantly reduced
from 2000 levels:
- 33% reduction in SO2 emissions
- 67% reduction in NOx emissions
- 76% reduction in mercury emissions
|
Emissions: Current (2000) and Existing Clean Air Act Regulations (base case*) vs. Clear Skies in Arizona 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.
SO2 and NOx Emissions Reductions under Clear Skies
Note:
The base case using IPM includes Title IV, the NOx SIP Call, NSR
settlements, and state-specific caps in CT, MA, MO, NC, NH, TX,
and WI. It does not include mercury MACT in 2007 or any other potential
future regulations to implement the current ambient air quality
standards or other 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
from new sources in 2020 are not reflected.
Clear Skies Health and Air Quality Benefits in the West
By 2020, the West would receive approximately $8.6 billion
in annual health benefits from reductions in fine particle and
ozone concentrations alone due to Clear Skies. (see
note one) |
Improve Public Health
- Reduced ozone and fine particle exposure by 2020 would result
in public health benefits of:
- approximately 1,100 fewer premature deaths each year (see
note one)
- approximately 800 fewer cases of chronic bronchitis each
year
- approximately 1,800 fewer non-fatal heart attacks each year
- approximately 2,500 fewer hospital and emergency room visits
each year
- approximately 150,000 fewer days workers are out sick due
to respiratory symptoms each year
- approximately 19,000 fewer school absences each year
- Reduced mercury emissions would reduce exposure to mercury through
consumption of contaminated fish, resulting in additional, unquantified
benefits to those who eat fish from lakes and streams in the West.
Help Maintain Health-Based Air Quality Standards (see
note 2)
- Currently, all but one Arizona county meets the 8-hour ozone
standard; all counties meet the fine particle standard.
- Existing programs would bring Maricopa County into attainment
with the 8-hour ozone standard.
- Clear Skies would further reduce concentrations of ozone and
fine particles throughout Arizona.
Clear Skies Would Provide Important Environmental Benefits in
the West
Clear Skies would produce significant visibility benefits in highly
visited national parks and wilderness areas in the West.
- Quantifiable visibility benefits in just 5 parks (Grand Canyon,
Rocky Mountain, Zion, Bryce Canyon, and Mesa Verde National Parks)
total over $300 million.
- Visibility benefits in the Grand Canyon alone are estimated
to be $100 million annually by 2020.
- Visibility improvements are also projected to improve tourism.
- In comparison to existing programs, nitrogen deposition would
decrease by 5-20% in the inter mountain West, and in some areas,
such as the Four Corners region, by up to 35%. Sulfur and mercury
deposition would not increase despite growth in electricity demand.
Click here for a larger image
Electricity Generation in Arizona under Clear Skies
Arizona's 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
1% from 1999 to 2020.
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Arizona'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, 92% of Arizona's coal-fired generation is projected
to come from units with advanced SO2 and/or NOx control
equipment that also substantially reduce mercury emissions;
in 2020, the percentage is projected to increase to 95%.
- No coal-fired units in Arizona are projected to be removed
from operation as a result of Clear Skies.
|
Current and Projected Coal Production for Electricity Generation
Emission Controls in Arizona under Clear Skies
- Under Clear Skies by 2020...
- 74% of coal-fired capacity would install SCR
- None would install scrubbers
|
- The major generation companies in Arizona include:
- Arizona Public Service Company
- Salt River Project
- Tucson Electric Power Company
- Total coal-fired capacity in Arizona is projected to be
5,201 MW in 2010.
|
Units in Arizona Projected to Be Retrofitted Due to Clear Skies
by 2020
Plant Name |
Unit ID |
Technology |
APACHE STATION |
2 |
SCR* |
APACHE STATION
|
3 |
SCR* |
CHOLLA |
4 |
SCR* |
CORONADO |
U1B |
SCR* |
CORONADO |
U2B |
SCR* |
IRVINGTON |
4 |
SCR* |
NAVAJO |
1 |
SCR* |
NAVAJO |
2 |
SCR* |
NAVAJO
|
3 |
SCR* |
* Retrofit was installed under Clear Skies
by 2010
Note: Retrofits and total coal-fired
capacity apply to coal units greater than 25 MW.
Electricity Prices in Arizona under Clear Skies
-
With or without Clear Skies, retail
prices in the North American Electric Reliability
Council (NERC) WECC/RMPA and AZNM region (the electricity
supply region that contains Arizona) are projected
to increase between 2005 and 2020.
-
With Clear Skies, retail prices are
projected to be approximately 0.6 - 2.6% higher between
2005 and 2020 than in the absence of the legislation.
|
In 2000, the average retail electricity price in Arizona
was approximately 7.2 cents/kWh, which was above the
average national retail price of approximately 6.7 cents/kWh.
|
Note: The base case using IPM includes
Title IV, the NOx SIP Call, NSR settlements, and state-specific
caps in CT, MA, MO, NC, NH, TX, and WI. It does not include
mercury MACT in 2007 or any other potential future regulations
to implement the current ambient air quality standards or
other 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 Arizona under Clear
Skies
Benefits Outweigh the Costs
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
|
-
In Arizona, Clear Skies is projected to
cost approximately $189 million annually by 2020, and
$1.2 billion throughout the West, while providing health
and visibility benefits totaling approximately $9.5 billion
annually region wide.
-
The increases in production costs under
Clear Skies represent only a small percentage of total
retail electricity sales revenue in Arizona.
-
Retail electricity sales revenue
in Arizona was almost $4.4 billion in 2000.
-
Adjusting these sales revenues by
the same growth rate used for the modeling of costs
would result in revenues of almost $6.8 billion
annually in 2020.
- Nationwide, the projected annual costs of Clear Skies
(in $1999) are $4.3 billion in 2010 and $6.3 billion in
2020; the nationwide benefits of Clear Skies are expected
to be over $113 billion annually by 2020.
- An alternate estimate projects annual health benefits
totaling $23 billion.
Note: Costs include
capital costs, fuel, and other operation and maintenance costs
(both fixed and variable) associated with the achievement
of the emissions caps in the legislation (for example, the
installation and operation of pollution controls). These state-level
production costs are estimates; they do not account for the
costs associated with the transfer of electricity across regions,
nor the costs or savings that could be associated with allowance
movement between sources.
Notes on EPA's Analysis
-
The information presented in this analysis
reflects EPA's modeling of the Clear Skies Act of 2003.
- EPA has updated this information to reflect modifications:
- Changes included in the Clear Skies Act of 2003.
- Revisions to the Base Case to reflect newly
promulgated rules at the state and federal level
since the initial analysis was undertaken.
- The Clear Skies modeling results presented include
the safety valve feature
-
This analysis compares new programs to
a Base Case (Existing Control Programs), which is typical
when calculating costs and benefits of Agency rulemakings.
- The Base Case reflects implementation of current
control programs only:
- Does not include yet-to-be developed regulations
such as those to implement the National Ambient
Air Quality Standards.
- The EPA Base Case for power sector modeling includes:
- Title IV, the NOx SIP Call, NSR settlements,
and state-specific caps in Connecticut, Massachusetts,
Missouri, New Hampshire, North Carolina, Texas,
and Wisconsin finalized before March 2003.
- For air quality modeling, the Base Case also includes
federal and state control programs, as well as the
Tier II, Heavy Duty Diesel, and Non-Road Diesel rules.
1. An alternative
methodology for calculating health-related benefits projects
approximately 600 premature deaths prevented and $1.6 billion
in health benefits each year in the West by 2020.
2. Based on
1999-2001 data of counties with monitors that have three years
of complete data.
State information based on EPA's modeling of the Clear
Skies Act of 2002 is presented here for archival reasons.
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