NOVEMBER 2, 2011

Marcellus Shale Lowers Heating Bills

The Pittsburgh Tribune and Erie Times report natural gas prices are decreasing as we approach the winter months. Rates per thousand cubic feet are dropping across western Pennsylvania.

Pennsylvania consumers have benefited from a 70 percent reduction in natural-gas prices since 2008, in large part due to the dramatic growth in shale gas. Last year, Marcellus gas production saved Pennsylvanians an estimated $633 million in utility costs, or about $200 for every family of four. The savings have been especially beneficial for low-income families, who spend almost a quarter of their after-tax income on energy.
The benefits of natural gas development are statewide. Any attack on affordable energy is an attack on Pennsylvanians' ability to heat their homes, run hot water and cook food for less.

posted by ELIZABETH STELLE | 03:40 PM | 0 comment

OCTOBER 7, 2011

Regulation or Electrification?

The Wall Street Journal brings to light new documents showing the Environmental Protection Agency operates as an overbearing parent, not a servant of the people. New regulations targeting air quality and mercury production in coal-fired power plants are projected by the Federal Energy Regulatory Commission (FERC) to reduce electricity production by 8 percent. That's 81 gigawatts of power no longer available, which is enough electricity to power about 8,100 Pennsylvania homes for a year.

This is in addition to the EPA's other job-killing regulations that will increase electricity rates by 13 to 17 percent in Pennsylvania and cost thousands of jobs.

Why is the EPA rushing these punitive rules at a time of great economic uncertainty?

FERC says less burdensome regulations could have the same net benefit, so it's not about protecting the environment. Following the proposed reduction in output, consumers would be more susceptible to power outages and rolling blackouts during peak usage. Your power would be less reliable just when you need it the most. Clearly, the EPA places real people's welfare last on its priority list.

The Journal ends its article by assuring us that FERC has the power to overrule the EPA if their regulations are deemed too costly. One federal bureaucracy may be overseeing another, but consumers will never have real protection while we have regulation without representation.

posted by JOHN BOUDER | 09:30 AM | 0 comment

AUGUST 29, 2011

Alternative Energy Mandates Make Consumers Pay More for Electricity

This month, the PUC released its latest annual report evaluating Pennsylvania's Alternative Energy Portfolio Standards. The report shows renewable energy continues to take more out of taxpayer's pockets.

The study found solar energy is more than 10 times more expensive than electricity from natural gas and nearly six times more expensive than coal. Electricity from onshore wind is nearly three times more expensive than natural gas.

Instead of letting electricity consumers choose whether or not they want to pay more for renewable energy by switching to a renewable electricity provider, the state's AEPS forces all consumers to pay more.

States with renewable standards, like Pennsylvania, have electricity rates that are nearly 40 percent higher than states with no mandate. While state electricity costs are affected by other factors, alternative energy mandates necessitate higher energy prices. Right now, residents of Pennsylvania pay more for their electricity than the national average and residents in 36 other states.  Higher energy costs add on the difficulties Pennsylvania families are already facing in this sluggish economy, forcing them to sacrifice to support special interests profiting off of solar and wind power.

The House Republican Policy Committee is currently holding hearings to evaluate Pennsylvania's AEPS.

posted by KATRINA CURRIE | 11:28 AM | 0 comment

AUGUST 22, 2011

EPA Regs Kill PA Jobs

Cap and Trade may be officially dead in Congress but the EPA is busy resurrecting it in a far more disastrous policy agenda that kills thousands of Pennsylvania jobs and send electricity rates through the roof.

The first of these regulations is called the Cross-State Air Pollution Rule (CSAPR). Finalized on July 7th, the mandate will affect coal and gas fired electric plants in 27, mostly eastern, states by reducing the transport of pollutants, like Sulfur Dioxide (SO2) and Nitrogen Oxide (NOx).

In Pennsylvania, power plants must reduce emissions of SO2 by 33 percent and NOx by 10 percent in the next six months. The mandate ignores the reality that major power plant systems are required to reduce emissions, like scrubbers, which could take more than four years from design to installation to accomplish.

On top of an unreasonable timeline, the EPA is trampling over state sovereignty by skipping the traditional State Implementation Plans and directly imposing federal rules on utilities, which some believe is a clear violation of the law.

Why rush when industry is already complying with current standards to reduce pollution? According to U.S. Energy Information Administration, the US cut SO2 emissions 50 percent between 2000 and 2009. And NOx emissions have been cut from 5.6 million to 2.3 million in the same time.

The CSPAR rule along with another regulation, called the Utility MACT rule, is estimated to cost 59,000 jobs in Pennsylvania from 2013 to 2020 and increase electricity rates by an average of 13 to 17 percent as utilities shutdown or idle plants to meet emission requirements.

Nationally, the Brattle Group found that the cost of investing in scrubbers and Selective Catalytic Reduction units across the country could run up to $120 billion by 2015. Even the EPA's extremely conservative cost estimate indicates that the price could be $2.8 billion annually, with $2.2 billion borne by consumers each year.

The only justification for these measures is a bunch of highly speculative and so far unproven death statistics that will undoubtedly wreak havoc on the energy industry.

posted by ELIZABETH STELLE | 05:10 PM | 5 comments

FEBRUARY 10, 2011

Green Energy Could Lead to More Blackouts

Recent controlled blackouts in Houston were reportedly caused by the inability of older fossil fuel power plants to operate in unusually cold temperatures. Now proponents of green energy are using the unfortunate event to justify even more subsidies and mandates promoting renewable power, which will further compromise the reliability of the electricity grid.

The reality is, 53% of Pennsylvania's electricity is generated from coal, 35% from nuclear and about 8% from natural gas, despite the billions of dollars in aid to boost solar, wind, biomass, and other renewables over the past decade.

Issuing new mandates, like the EPA's Clear Air regulations, or increasing old ones, like Pennsylvania's Alternative Energy Portfolio Standards, prevents current plant owners from making the improvements or modernizations needed to keep the lights on. Additionally, owners have to contend with a public relations and legal nightmare every time they propose a new plant.

All five proposed coal projects in Pennsylvania are facing significant opposition. In Texas, nine recent coal and gas projects have been canceled. All this means fewer dollars for investment in new technology. Gene Barr put it well in Gordon Tomb's Patriot-News op-ed:

"When you mandate technologies, the best you get is today's technology and the worst you get is yesterday's technology," says Gene Barr of the Pennsylvania Chamber of Business and Industry. "And you run the risk of shutting out tomorrow's technology."

Today, few are willing to invest the billions of dollars needed to construct new gas, nuclear or coal plants with so much regulatory uncertainty, and with all the taxpayer support being directed to other types of energy. As a result, several Pennsylvania power plants are over 50 years old, making maintenence outages more likely and compromising the electricity grid's ability to meet demand.

posted by ELIZABETH STELLE | 11:52 AM | 3 comments

OCTOBER 15, 2010

Recap of the Pennsylvania Senate's Busy Week

The PA State Senate had a busy week, all leading up to some key votes that took place yesterday. We have been closely following several bills and unfortunately a few costly ones made their way through. Here's a quick look at some of the notable legislation that made headlines yesterday:

• Pension Non-Reform—For starters, the Senate passed HB 2497 with a 41-8 vote to kick the pension problems of the state further down the road. The bill is nothing more than an accounting side-step that defers costs onto future generations. The House Democrats said the bill, because it include the Legislative Fiscal Office, is now unconstitutional, citing a Legislative Reference Bureau report. This is the same reason the Senate Republicans say the Severance Tax legislation is unconstitutional. If someone were cynical, they might suggest this was a deliberate effort to poison the legislation, so they could claim they voted for it, but never actually have it become law.
  
  
• The ‘Castle Doctrine' bill-- The Senate passed the Castle Doctrine, but not the version passed by the House earlier in the week. Instead, the Senate took the language from HB 40 and added it to HB 1926 in an attempt to avoid the House Judiciary Committee, which was planning on adding gun control provisions. Thus, issues of constitutionality were brought up by House Democrats and as this bill now addresses self-defense and the registration of sex offenders (the original purpose of HB 1926). The Castle Doctrine expands the ability of legal gun owners to use lethal force in self-defense in places outside of the home. Republicans remain optimistic about the fate of the bill.
  
  
• Sprinkler Mandate—The Senate approved HB 1196, legislation to delay for one year the mandate to include sprinklers in all new homes built in Pennsylvania. The sprinkler requirement was estimated to add an additional $6,000 to the cost of new homes. The bill also delays new building codes for log homes built in the state. The fate of this bill is unclear, many fear the Governor is not likely not sign it.
  
  
• Prison savings—To reduce the growth in PA's prison population, SB 1161 would redirect nonviolent, technical parole violators from prisons to community correction facilities. The legislation is estimated to save the state $30 to $40 million per year (subscription required). The bill is headed to the governor and is expected to be signed.
  
  
• Firefighters and Cancer—HB 1231 is also headed to the governor, yet it remains unclear as to what action will be taken. The bill presumes that any firefighter who develops cancer got it as a result of their occupation, requiring local fire departments to cover treatment, unless they can prove otherwise. In its current language, HB 1231 makes it difficult for an employer to challenge the occupation as the source of the disease.
  
  
• Municipal Electricity Power—The Senate voted yesterday to take up House changes to SB 168 that will give municipal governments the authority to partake in power supply and electric generation projects. Senate Bill 168 would allow boroughs to purchase power through a no-bid contract for certain electric generation projects.
  
  
• Streamlining State Food Inspections: Also passing the Senate is HB 174, which standardizes food safety regulations statewide. It will also have implications on churches. The proposed legislation does include an exemption for religious groups that have 501(c)(3) status and a sales tax exemption certificate.

posted by NICHOLAS FETT | 02:13 PM | 0 comment

OCTOBER 7, 2010

Unintended Consequences of the Bulb Ban

The national phase-out of incandescent light bulbs begins in 2012, and by 2014, incandescents will be history. The popular replacement is the compact-fluorescent light (CFL), but there are very good reasons why a person wouldn't want to purchase a CFL. One reason is CFLs contain mercury, and exposure to the element is linked to migraines and epilepsy attacks. Secondly, if you break a traditional light bulb, just clean it up. If you break a CFL, the EPA recommends you do this:

• Get all the people and pets out of the room;
• Open windows to air out room for at least 15 minutes and make sure central air is off;
• Scoop up glass and powder using cardboard and place it in a sealed jar;
• Use sticky tape to remove remaining small pieces and place in jar;
• Wipe with damp towel, place in jar;
• Do not vacuum;
• Immediately place all clean-up items outside in a trash container;
• Wash hands;
• Check with your local government about disposal requirements, some areas require broken mercury-containing light bulbs be taken to a recycling center.

Families with small children who would rather stay with the traditional, safer light bulb won't be able to. In fact, Maine's EPA recommends any family with small children, infants, or women who are nursing avoid CFLs. The only alternative is to buy the expensive halogen light bulb, which cost about four times more than the incandescent bulb.

Another consequence of this legislation is a loss of American jobs. Almost all CFLs are made overseas, because it's cheaper to work with mercury there. Last month, General Electric announced it was closing its factory in Virginia, the last major incandescent factory in America. The alternative to shutting down U.S. factories is converting plants to manufacture halogen bulbs. That is what Pennsylvania's Sylvania plant in St. Marys plans to do. If these more expensive light bulbs aren't successful, 265 people will lose their jobs.

People should be informed about the benefits and risks of switching light bulbs and be allowed to make their own informed decision—instead of being forced to buy a product because of a government mandate. Pennsylvania legislators should join members of Congress in Texas and Tennessee that are working to repeal this legislation.

posted by KATRINA CURRIE | 02:46 PM | 0 comment

AUGUST 31, 2010

PPL's Distribution Rate Increase and Electric Choice

Earlier this year, we put out an electricity guide for citizens and businesses explaining why electricty rates were increasing, and how Pennsylvanians can to shop for the best deal.

In 2011, PPL territory rates will most likely increase again, but it is not related to the deregulated market.

There are three parts to electricity delivery: generation, transmission, and distribution. When you shop for a supplier, they provide you with generation and transmission. Distribution, which is essentially the upkeep of power lines, is still regulated by government, and provided by one of Pennsylvania's 11 distribution utilities.

Anyone within the PPL region must use PPL as their distributor, and PPL must appliy to the Public Utility Commission (PUC) for a distribution rate increase.

PPL is awaiting final approval by an administrative law judge and the PUC to increase its rates for an estimated revenue of $77.5 million, less than its original $114.7 million proposal, in order to recapture nearly three years ($727 million) worth of distribution investments.

If approved, a judge will decide how much of an increase will fall on residential customers, but the monthly increase is expected to be minimal, from $8.44 to $8.75.

While the distribution charge is the same, flat rate regardless of your generator, it is still a good reminder for residents to shop around and make sure they're getting the best electricity rates available.

posted by KATRINA CURRIE | 03:20 PM | 0 comment

AUGUST 31, 2010

Coal Faces an Onslaught of New Regulations

Debate over new regulations by the EPA puts the Pennsylvania coal industry at a crossroads. Last week, experts met in Philadelphia to discuss a new ruling known as the Clean Air Interstate Rule. The measure requires 31 states, from Massachusetts to Texas, to reduce sulfur dioxide emissions from 2005 levels by 71% and nitrogen oxide emissions by 52% by 2014.

The impact on the coal industry would be significant, forcing many small and older coal-fired generation plants to close. Doug Biden, President of the Electric Power Generation Association, noted about 65% of Pennsylvania's coal-fired electricity capacity already meets or exceeds the standards set forth by the EPA; however, older and smaller plants do not.

While the Philadelphia Inquirer touts the new ruling as a way to save billions on health care costs brought on by asthma and other lung problems, there are also significant disadvantages. The new regulations are expected to cost plants in Pennsylvania a total of $2.8 billion dollars, an insurmountable amount for some of the state's oldest plants. And companies contend the actual cost of regulations will be much higher.

It's likely that over time, the industry would have closed older plants and continued upgrades. For example, PPL recently spent $1.4 billion for pollution controls on its 1961 plant in York County and Montour plant built in 1972. Sulphur dioxide emissions at Montour fell 88% - from 128,000 tons in 2007 to 15,000 tons in 2009.

But forcing large emission reductions immediately will not only result in lost jobs, as plants close, but higher electricity prices -- hurting all businesses. Jeff Holmstead, a former EPA official who authored the original interstate rule, said it was not clear whether utilities will be able meet the new standards while still providing affordable and reliable electric power.

See my commentary today on the inconsistency of punishing traditional energy while offering corporate welfare for alternative energy.

posted by ELIZABETH STELLE | 01:30 PM | 0 comment