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Highlights of Clear Skies in New Mexico
- New Mexico sources would reduce emissions of SO2 by 13%, NOx
by 57%, and mercury by 28% by 2020 due to Clear Skies.
- 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 visibility
and the other benefits of a clean environment 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 New Mexico are expected to remain
near or 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 Mexico'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 Mexico sources would 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)
Clear Skies Builds Upon the Work of the WRAP
- 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.
Note: Yellow states are states involved in the WRAP voluntary
emissions reduction program.
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
![Field of flowers](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/western_fields.jpg)
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 New Mexico under Clear Skies
Emissions in New Mexico (2020) would be reduced from 2000
levels:
- 39% reduction in SO2 emissions
- 62% reduction in NOx emissions
- 61% reduction in mercury emissions
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Emissions: Current (2000) and Existing Clean Air Act Regulations (base case*) vs. Clear Skies in New Mexico in 2010 and 2020
![Emissions: Current (2000) and Existing Clean Air Act Regulations (base case*) vs. Clear Skies in New Mexico in 2010 and 2020 -- Nitrogen oxides](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im2b.gif)
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.
SO2 and NOx Emissions Reductions under Clear Skies
![Projected SO2 Emissions from Power Plants with the Base Case and Clear Skies (2020) - West](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im3.gif)
![Projected NOx Emissions from Power Plants with the Base Case and Clear Skies (2020) - West](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im4.gif)
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.
Clear Skies Health and Air Quality Benefits in the West
Improve Public Health
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 1) |
- 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 1)
- approximately 800 fewer cases of chronic bronchitis each year
- approximately 1,800 fewer nonfatal 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 mercury-contaminated lakes
and streams in the West.
Help Maintain Health-Based Air Quality Standards (see
note 2)
- All counties in New Mexico are currently expected to meet the
8- hour ozone and fine particle standards.
- Clear Skies would reduce concentrations of fine particles beyond
what is expected under the base case throughout New Mexico, providing
additional benefits to public health.
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 intermountain 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 New Mexico under Clear Skies
Current and Projected Generation by Fuel Type in New Mexico
under Clear Skies (GWh)
![Current and Projected Generation by Fuel Type in New Mexico under Clear Skies (GWh)](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im6.gif)
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- New Mexico'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 and 2020, 100% of New Mexico's coal-fired
generation is projected to come from units with advanced
SO2 and/or NOx control equipment that also substantially
reduce mercury emissions.
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![Current and Projected Coal Production for Electricity Generation](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/me_im5.gif)
Emission Controls in New Mexico under Clear Skies
Under Clear Skies by 2020...
- 44% of coal-fired capacity would install SCR
- None would install scrubbers
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The major generation companies in New Mexico include:
- Public Service Company of New Mexico
- Arizona Public Service Company
- El Paso Electric Company
- Southwestern Public Service Company
- Tri-State Generation &
Transmission
Total coal-fired capacity in New Mexico is projected
to be 3,577 MW in 2010.
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Units in New Mexico Projected to Be Retrofitted Due to Clear
Skies by 2020
FOUR CORNERS |
3 |
SCR* |
FOUR CORNERS |
4 |
SCR* |
FOUR CORNERS |
5 |
SCR* |
*Retrofit was installed under Clear Skies by
2010
Notes:
1. Retrofits and total coal-fired capacity apply to coal units
greater than 25 MW.
2. San Juan unit 2 is projected to be removed
from operation by 2005 with Clear Skies due to excess gas-fired
capacity in the marketplace, unless otherwise needed for voltage
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.
Electricity Prices in New Mexico under Clear Skies
- With or without Clear Skies, retail prices in the North
American Electric Reliability Council (NERC) WECC region
(the electricity supply region that contains New Mexico)
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.
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![NERC](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/vtnerc.gif)
![Projected Retail Electricity Prices in New Mexico under the Base Case and Clear Skies (2005-2020)](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im7.gif)
![Projected National Retail Electricity Prices in New Mexico under Clear Skies (2005-2020)](https://webarchive.library.unt.edu/eot2008/20090305032409im_/http://www.epa.gov/air/clearskies/images/nm-im8.gif)
In 2000, the average retail electricity price
in New Mexico was approximately 6.6 cents/kWh, which was below
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 New Mexico 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
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- In New Mexico, economic modeling projects that the cost of generating
electricity, of which a component is the cost of installing and
operating pollution controls, is less under Clear Skies than under
the base case as power production shifts within the region to
enable the power sector to comply in the most costeffective manner.
Total annual health and visibility benefits in 2020 for New Mexico
are projected to be $120 million, with health and visibility benefits
projected to be $9.5 billion throughout the West.
- 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 Nonroad 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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