Viewpoints: State with clean air doesn’t need cumbersome mandates

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Dave-Stevenson-photo-2.jpgBy David Stevenson

Stevenson is Director, Center for Energy Competitiveness at the Caesar Rodney Institute, a public policy group

Delaware is now in compliance with every EPA air quality standard including recently tightened ozone standards. We also already beat the 2030 cap on carbon dioxide emissions from power plants! The air quality standards are set at levels consistent with health impact related scientific studies.

Have you seen this information published anywhere else?  Probably not. It is not in the best interest of DNREC to report we have clean air. How do you maintain support for expensive regulations and economy killing “green” energy programs if all the regulatory goals are met?  NREC spends $22 million a year on these issues. Emission regulations are adding $150 a year to residential electric bills and up to $1 million a year for the largest industrial customers and costs will increase. These rates are a barrier to keeping and creating good jobs and disproportionately hurt the poor.

Carbon dioxide emissions from power plants have been cut in half in recent years. Delaware requires power plants to buy permits to emit carbon dioxide. The idea was companies would cut emissions to avoid the tax. That is not what happened. Natural gas emits about half the carbon dioxide as coal for the same power production. Emissions fell as companies switched to lower cost natural gas, and some older coal-fired units were closed rather than spend money on expensive pollution control equipment.

The carbon tax had almost no impact, until now. There is only one coal fired generator left in Delaware, and it’s the only power plant in Sussex County. The unit was retrofitted with pollution control equipment at a cost of $360 million, more than the cost of a new power plant, and is now tied for the cleanest coal burning plant in the nation and it may have to close. The carbon tax adds over 15% to the cost of power, making the facility uncompetitive. It only ran 27% of the time over the last twelve months, about half as much as similar plants elsewhere. The plant is probably losing money.  Loss of this plant will raise electric bills and lower reliability in Sussex County.

The cost of carbon permits tripled after DNREC illegally changed permit rules in 2014. The Delaware Constitution says any tax increase must be approved by a three fifths majority in the legislature. A lawsuit challenging DNREC is before the Superior Court. Reverting to the old rules could save the power plant and save electric customers a lot of money.

Delmarva Power, and other power distributors in Delaware must buy an ever increasing amount of expensive wind and solar power to meet DNREC regulations. Wisely, the legislature included a cost cap provision that requires a freeze in buying more such power if electric supply costs go up more than 3 percent. Electric supply cost is now up 9 percent but there is no freeze.

Why not?  DNREC delayed establishing the needed calculation regulation and has been challenged on three attempts to establish a regulation wildly out of line with the law. They tried adding questionable costs to the divisor to minimize the apparent increase. They have claimed the non-existent power to ignore the freeze. Incredibly, they are now trying to ignore the cost of the much maligned Fuel Cell Tariff they promoted and justified by calling conventional natural gas fired fuel cells a renewable power source. The latest misguided proposed regulation is being challenged by CRI, the Public Advocate, and others.

DNREC also encourages Delmarva Power to buy renewable power from expensive residential systems instead of using much lower cost utility scale projects. The residential systems cost about $3.50/watt compared to $1.50/watt for utility scale. Utilities in Delaware and around the world tend to rely on utility scale units for 70 to 80% of their solar power. Delmarva is headed toward only 5% utility scale by 2025. DNREC also continues to support an aggressive increase in buying intermittent wind power from out-of-state wind farms that add cost, lower reliability, and add nothing to the Delaware economy.

DNREC has lost a string of lawsuits opposing its outlaw ways, including two suits in the last few weeks. We suggest the organization start following the law as intended, recognize we already have clean air, and encourage legislation abandoning expensive non-essential regulations.

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