Pragmatic Environmentalist of New York

Investment of RGGI Proceeds in 2016

This is a post on the Regional Greenhouse Gas Initiative (RGGI) report: The Investment of RGGI Proceeds in 2016 . It is another in a series of posts on RGGI that discusses how RGGI has fared so far and a follow up to the 2015 investments proceeds report post. Although the press release, RGGI Report: 2016 RGGI Investments Generate Environmental and Economic Benefits, describes the benefits of the program in glowing terms the fact is that the reported benefits for these investments fall far short of what is necessary to meet the RGGI reduction goals.

I have been involved in the RGGI program process since its inception. Before retirement from a non-regulated generating company, I was actively analyzing air quality regulations that could affect company operations and was responsible for the emissions data used for compliance. After years dealing with RGGI I worry that whether due to boredom or frustration, that there is very little dissent to the program. It may be because, contrary to EPA and State agency rulemakings, RGGI does not respond to critical comments and rebut concerns raised by stakeholders. After years of making comments that disappear into a void, industry does not seem to think there is value to making comments. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Summary

According to the Executive Summary in this report:

Proceeds from the Regional Greenhouse Gas Initiative (RGGI) have powered a major investment in the energy future of the New England and Mid-Atlantic states. This report reviews the benefits of programs funded in 2016 by $436.4 million in RGGI investments, which have reduced harmful carbon dioxide (CO2) pollution while spurring local economic growth and job creation. The lifetime effects of these RGGI investments are projected to save 30.4 million MMBtu of fossil fuel energy and 7.0 million MWh of electricity, avoiding the release of 6.4 million short tons of carbon pollution.

As a whole, the RGGI states have reduced power sector CO2 pollution over 50 percent since 2005, while the region’s gross domestic product has continued to grow. RGGI-funded programs also save consumers money and help support businesses. RGGI investments in 2016 are estimated to return $1.7 billion in lifetime energy bill savings to more than 182,000 households and 2,680 businesses which participated in programs funded by RGGI investments, and to more than 800,000 households and 100,000 businesses which received direct bill assistance.

The report describes how the RGGI investments were used 2016, a brief summary of cumulative investments, and then provides specific information for each state including an example of the programs.

Analysis

The claimed 2016 benefits are comparable to the 2015 report. This report says that $436.4 million in RGGI investments funded programs in 2016 as compared to $410.2 million in 2015. The lifetime effects of the 2016 RGGI investments are projected to save 30.4 million MMBtu of fossil fuel energy and 7.0 million MWh of electricity, avoiding the release of 6.4 million short tons of carbon pollution. The lifetime effects of the 2015 RGGI investments are projected to save 28 million MMBtu of fossil fuel energy and 9 million MWh of electricity, avoiding the release of 5.3 million short tons of carbon pollution.

In both Proceeds reports (2015 and 2016), Table 1 Benefits of RGGI Investments list the annual and lifetime benefits of the investments. Table 1 Comparison of 2015 and 2016 Proceeds Funding and Benefits lists the investment totals and the reported benefits for energy savings, electrical use and CO2 emissions reductions. I have also included the investment efficiency or $ per improvement.

Of particular interest is the cost per ton of CO2 reduced. The life time numbers ($64 per ton in 2015 and $82 per ton in 2016) are about twice the Obama era Social Cost of Carbon value of $36 for 2015 using a 3% discount rate. However, I don’t think using the lifetime values is appropriate.

The RGGI model rule updates agreed to by the RGGI States in December 2017 call for an annual post-2021 cap reduction of 2,275,000 tons per year. My question is how will the RGGI investments help meet that goal. In order to determine that you have to use the annual benefits of the investments. When you do look at the annual projections the results are pathetic. RGGI claims that its investments reduced CO2 emissions by 298,410 tons at a rate of $1,375 per ton in 2015 and 382,266 tons at a rate of $1,142 per ton in 2016. The 2016 investments fall short of the post 2021 cap reduction requirement by 1,892,734 tons.

How are the affected sources supposed to meet this reduction target? Although there have been significant reductions since the inception of the RGGI program most of those should be ascribed to economic fuel switching away from coal and oil to natural gas. As shown in a white paper submitted to RGGI by the Environmental Energy Alliance of New York the affected electrical generation units have made most of the cost effective reductions possible from their operations. As a result, future reductions will have to come from other investments such as RGGI. If the RGGI investments are the only way and the 2016 cost efficiency ($ per ton of CO2 reduced) is not improved then RGGI investments would have to be over $2.161 billion every year.

The RGGI model rule update caps emissions in 2021 at 75,147,784 tons. Trading program theory states that when there is allowance scarcity the price will rise and so you could expect that more money will be available for investments. The RGGI allowance price necessary to provide $2.161 billion for 2021 would be $28.75. There is a problem with this however. The RGGI model rule cost containment reserve trigger price (included to insure that allowance prices don’t go to high) is $13.00 in 2021. As a result, they cannot go that high.

The good news relative to this potential problem is that 2017 RGGI emissions were only 66,235,513 tons, well below the 2021 target. The question is why was there a 21.8% drop in emissions relative to 2015? If it was primarily weather related then emissions could go back up. Only time will tell but the point is that at least the emissions are close to the cap targets.

Conclusion

Ultimately these findings illuminate my problem with CO2 emissions trading programs. My particular concern is affected source compliance. Because there is no cost-effective add-on control system available for CO2 reductions, an affected source basically has to buy enough allowances to cover its planned operations. RGGI is hell-bent on reducing its caps despite the fact that its investments for emissions reductions fall far short of what the emissions reductions it has promulgated. There are many complications beyond the scope of this post that determine allowance availability but I believe that by 2025 the compliance entities in RGGI are going to have to pay exorbitant prices to get allowances that they need to operate and soon thereafter there won’t be enough at any cost. At that point, they will have no choice but to shut down.

Warning Signs from Germany for New York Reforming the Energy Vision

Germany’s Federal Audit Office has released a report that accuses the federal government of having largely failed to manage the German equivalent of New York’s Reforming the Energy Vision (REV). There are warning signs in the report because some of the issues raised are already prominent in the New York energy vision.

Germany’s program, Energiewende or energy transition, is the change from nuclear and fossil fuels to renewable sources of energy. Legislation for the Energiewende passed in 2010 and includes a Greenhouse Gas (GHG) reduction target of 80% by 2050 the similar to REV. The Federal Audit Office review of the program found that costs are high and the targets will likely be missed. “Over the past five years alone, at least 160 billion euros have been spent on the transformation of the energy system,” the report states: “If the costs of energy system transformation continue to rise and its targets continue to be missed, there is a risk of a loss of confidence in the ability of government action.”

In order to implement the transition Germany has had to develop a large bureaucracy to manage the programs and enact 26 laws and 33 regulations. The audit notes that there is “no place where everything comes together, no place that assumes overall responsibility”. This is what is happening in New York. There are over 40 REV initiatives but no single summary.

The audit states:

In short: “A lot of effort does not necessarily mean a lot”. For despite a great frenzy of data collection there is no overall view. “The Federal Ministry of Economics uses 48 different data sources to check the status of the Energiewende on the basis of 72 indicators, and yet “there is a lack of meaningful data that could be relevant for assessment and control”. Many data would have little control value or would be available too late, but often they would “simply draw the wrong conclusions”.

New York’s REV has no status indicators available.

My biggest concern with REV is cost. The German Federal Audit Office report notes: “there are no quantified targets, no measurable indicators” for the energy policy goals of affordability and security of supply. REV also fails to provide that critical evaluation information.

I believe that someday there will be a similar cost-benefit analysis audit of REV with the same results of extraordinary costs and failures to meet the ambitious targets. I predict that the response from New York State will be the same as from the German federal government:

The Federal Government explained its refusal to conduct a transparent cost-benefit analysis of the Energiewende by saying that these costs could only be compared with a “counterfactual scenario”. Because electricity grids and power plants would have had to be renewed even without the Energiewende, only a comparison of a world with and a world without the Energiewende would be meaningful. However, such a comparison could not be made because of the large number of uncertain basic assumptions.

Murphy Commentary in Syracuse Post Standard: Earth has a Fever – Public Policy has the Cure

On September 23, 2018, the Syracuse Post Standard published a guest commentary entitled “Earth has a Fever – Public Policy has the Cure” by Cornelius B. Murphy, Jr. SUNY Senior Fellow for Environmental and Sustainable Systems. As is typical in Dr. Murphy’s commentaries a list of disasters is trotted out, the climate crisis of global warming is blamed for them, and the sermon ends with a call to “improve the future of our planet”. I disagree with his arguments and his proposed policies.

Unfortunately, Dr. Murphy’s list of disasters are, in fact, only peripherally related to climate change and I am not in the mood to dissect each of his claims because “the amount of energy necessary to refute BS is an order of magnitude bigger than to produce it”, Brandolini’s BS asymmetry principle. Consider only the Cyanobacteria outbreaks in 55 lakes in New York State he claims are due to warm water column temperatures and nutrients. His attribution is correct but his emphasis is wrong. If there are limited nutrients it does not matter how warm the water is you will not get eutrophic algae blooms that lead to Cyanobacteria outbreaks.

I think that Dr. Murphy should read Roger Pielke Jr’s book on The Rightful Place of Science: Disasters and Climate Change to appreciate the actual problems associated with climate change. Dr. Pielke is reviled because he shows how the consensus of climate science does not support the climate crisis Dr. Murphy invokes as the reason to act now. As Ben Pile’s review of the updated version of the book notes “In other words, climate change may well be a problem, but the data sets consistently show that economic and technological development mitigate the worst problems that climate has always caused.”

Dr. Murphy says that Climate disruption is a social issue and that the “The least advantaged among us will suffer the most with limited access to air conditioners and cooling centers”. I agree that energy poverty problem is a social issue. I am sure that we disagree on the cure however. While Dr. Murphy would have us try to moderate extreme weather I believe that there is no evidence that the policies he espouses will prevent it. If anything we might be able reduce future frequency and severity but society is not where near resilient to existing weather so it makes sense to emphasize adaptation over mitigation.

My biggest concern is that the current New York State Energy Plan promotes the use of fossil-free technology that is so expensive that the least advantaged among us will have limited access to the energy they need for cooling and heating because they will be unable to afford it. Ben Pile explains:

Moreover, campaigners’ conviction that anthropogenic climate change is bringing disaster upon us overlooks the extent to which economic and social development has enabled us to cope better with extreme weather events. As Pielke explains, ‘societal change is underappreciated, overlooked, and part of that is politics’. ‘The climate-change issue’, Pielke continues, ‘has taken all the oxygen out of the room for vulnerability, resilience, natural climate variability, indeed pretty much everything else that matters. It is absolutely the case that overall being richer as communities, as nations, is associated with more resilience, less vulnerability to natural disasters, particularly when it comes to loss of life… The climate issue has become so all-encompassing that it’s hard to get these other perspectives into the dialogue.’

Oneonta New York Decompressor Station and New York Energy Policy

Last month I stumbled upon references to a decompressor station in Oneonta, New York. Firstly, I had no clue what a decompressor station and secondly I was born and raised in Oneonta, New York so I followed up on the story. It is a perfect example of New York State’s emotional rather than rational energy policy.

I was astonished to learn that there is a natural gas load pocket in Oneonta. This small city is located in the western Catskills in Otsego County SW of Albany New York. The natural gas pipeline installed when I was living there in the 1950’s is no longer adequate for all users on the coldest days of the year. As a result the local utility has to curtail natural gas to larger users so that the residential users have adequate supplies to heat their homes. The solution is to compress natural gas elsewhere, truck it to the curtailed facilities, and then decompress it for use.

Mr. Zakrevsky described the decompressor station proposal at the Oneonta Town Board meeting on August 8. He explained that there isn’t enough natural gas for heating on the 30-odd coldest days of the year from the existing pipeline to Otsego County so bigger users have to curtail their use so that homeowners do not have to maintain a backup heating system. Two hospitals, several manufacturers, and a college in Oneonta need energy-dense, constantly available fuel to supplement their natural gas use when that fuel is curtailed. They have considered setting up their own decompressors to replace higher-polluting, less-efficient fuel oil so the Otsego Development Authority submitted a proposal for a grant to explore the possibility of a single centralized decompressor station to provide the necessary natural gas.

The link listed above documents a hearing at the Oneonta Town Board meeting including comments from a crowd of folks who do not want new fossil fuel infrastructure. I did not listen to all the speakers who attended the Town Board meeting to protest the decompressor station because the arguments I did hear all seemed confined to emotional pleas for “cleaner, greener” alternatives. My problem is that I do not believe numbers or history support such alternatives. There were opponents to this project that proudly claimed victory for the permit denial of the Constitution natural gas transmission project nearby that would have provided all the natural gas necessary for everyone in Oneonta. Apparently that natural gas was from Pennsylvania and is fracked so it is evil and must be stopped. I think that all those who opposed the decompressor proposal and opposed the Constitution pipeline should explain how they propose to solve the specific problem of heating the city’s hospital on the coldest days of the year.

I do not think that the decompressor station and compressed natural gas (CNG) trucks is a particularly “good” solution. From a pollution standpoint using natural gas is better than fuel oil so I agree that using natural gas is preferable and my experience with fuel switching is that process also has implementation risks which could cause heating problems so sticking with natural gas rather than switching to fuel oil is better. Clearly moving CNG by truck during the winter is risky and I understand why speakers at the meeting described them as “bomb trucks”. However, the safer solution is to have enough natural gas pipeline infrastructure in place to prevent curtailments. Because that is not available, the proposal to have a central station just off the interstate rather than decompressor stations at each location that faces curtailment requirements reduces transport risk and makes sense. I must point out that the Constitution pipeline would have solved this problem so the folks that claim that preventing that as a “victory” have to accept culpability for what I believe is a worse alternative.

I expect that the opponents will claim renewables can provide the answer to providing heat for the hospital. I would love to see quantitative support for a solution to the need for constant, dense energy for heating the hospital on the days when not having heat would surely exacerbate illness and maybe even cause deaths. Renewables are intermittent and diffuse. What kind of storage solution do they propose for this winter problem when the available solar energy is low and, on the really cold days, when winds are light? Heating the hospital without the need for outside electricity is necessary in case of a power outage – think ice storm. The hospital uses a heating plant with a boiler that provides hot water for heating and hospital use. The problem with renewable electrical energy is that there is no way to provide in-kind replacement for the boiler fuel. In order to provide heat with renewables the whole heating system would have to be replaced, probably with heat pumps. Those systems have their own problems on these cold days. Proponents of renewable energy have to provide a solution and costs to make their case that there is a viable and affordable alternative to the proposal.

When I was growing up in Oneonta during the 1950’s I missed the Delaware & Hudson Railroad steam engine era when there were over a hundred coal-fired locomotives operating out of the city. However, I do remember the excitement when natural gas came to town so that my family no longer had to deal with maintaining our coal-fired furnace fire, dealing with the ashes and having a coal bin in the basement. I am not aware of any records of the air quality in Oneonta when coal was the preferred heating source and the roundhouse had coal-burning locomotives but I am sure that it was poor. Since 1980 statewide average SO2 levels have decreased by 95%. When homes and the railroad were burning coal in the “City of the Hills” the SO2 concentrations must have been a couple of orders of magnitude greater than today’s levels. That improvement was thanks to oil and natural gas replacement of coal.

I think this is a good example of New York’s dysfunctional energy policy. Ultimately the opponents of the decompressor station must rely on emotional arguments because a rational analysis supports the proposal as a reasonable, albeit not “good”, solution to a problem caused by the lack of sufficient pipeline infrastructure. The better solution would be new pipelines to provide the necessary natural gas. The irrational fear of fossil fuel infrastructure in New York is causing poor decisions.

New York State Air Pollution Concentration Trends to 2017

I do not think that the general public understands how much improvement there has been to New York State’s air quality and how big the emissions reductions have been. This is a summary of the trend of observed levels of SO2, NO2 and ozone since 1980 in New York State and it shows significant improvements. This is a companion to an earlier post showing emissions trends.

I have to apologize for my inability to incorporate tables and graphs in the body of a WordPress blog post. If I had that ability then this post would be a heck of a lot easier to read. Instead I offer three alternatives. Each of the figures and tables is available by links in the following post. I also have prepared a pdf version of this post and you can view that entire document NYS Air Pollution Concentration Trends. Finally that document and a spreadsheet with the data, tables and graphs are available at the NY Pragmatic Environmentalist dropbox.

Although the Environmental Protection Agency has a good air quality trend website, it does not have New York only data available and the NYS Department of Environmental Conservation does not provide a summary of air quality trends. In order to assess New York trends I accessed ambient monitoring data from an EPA website. I made no attempt to limit the monitoring sites used. I just calculated values for all reporting stations. As a result this is not an accurate picture of trends because changing stations can skew the results.

According to the EPA air quality Status and Trends document national air quality levels have decreased significantly from 1990 to 2017:

Carbon monoxide -77%
Lead – 80%
Nitrogen Dioxide (annual) – 56%
Nitrogen Dioxide (1-hour) – 50%
Ozone – 22%
Particulate Matter (2.5µ) (annual) – 41%
Particulate Matter (2.5µ) (24-hour) – 40%
Sulfur Dioxide – 88%

For the New York only data I found the following reduction trends:

Nitrogen Dioxide (annual) – 52%
Nitrogen Dioxide (1-hour) – 63%
Ozone – 23%
Sulfur Dioxide – 93%

New York State annual average ambient (SO2, NO2 and Ozone) trends are shown in Figure 1 NYS Ambient Concentration Trends NYS Trend Summary for SO2 NO2 and Ozone.

In order to compare the air quality to the National Ambient Air Quality Standards I need to show the data in the appropriate reporting format. The standards use complicated averages so the following graphs use the appropriate parameters.

The most problematic pollutant is ozone. The Ozone standard is the 0.070 ppm measured as the annual fourth-highest daily maximum 8-hour concentration, averaged over 3 years. Figure 2 NYS Maximum Annual Ambient 8-hr 4th High Ozone shows the trend of the highest observed value of the fourth-highest daily maximum 8-hour concentration. While averaging over 3 years reduces the values somewhat clearly New York is close to the standard. The highest value in 1988 was 0.148 and in 2017 the observed value was 0.079.

EPA recently instituted a one-hour NO2 standard of 100 ppb measured as the 98^th percentile of 1-hour daily maximum concentrations averaged over 3 years. I did not include the 3-year averaging component but Figure 3 NYS Maximum Annual Ambient NO2 Max 98th Percentile shows the trend of the maximum observed annual value in the state. There are no observed values greater than the standard.

EPA also has a 1-hour NAAQS for SO2. That limit is 75 ppb measured as the 99^th percentile of 1-hour daily maximum concentrations, averaged over 3 years. I did not average these values either so Figure 4 NYS Maximum Annual Ambient NO2 Max 98th Percentile shows the trend of the maximum observed value. There has been a sharp decline in observed values until 2017 when a higher value was observed. That is the result of adding data from a new private monitoring network specifically designed to determine whether there is an issue with this limit for their facility. In 2017 that monitor recorded a 90.5 ppb value for the 99^th percentile.

The spreadsheet, NYS EPA Data for SO2 NO2 and Ozone, lists all the monitoring data for those parameters since 1980. Because of the size of that spreadsheet I did not include it. The spreadsheet included at the dropbox has a summary tab with the data and graphs for the information shown in this post.

CPV Valley Energy Center Operating Status August 1, 2018

On August 1, 2018 New York State’s Department of Environmental Conservation (DEC) CPV Valley Permit denied (DEC letter to CPV August 2018) the renewal of the Air State Facility Permit for the Competitive Power Ventures (CPV) Valley Energy Center natural gas power plant located in Orange County, New York. In this post I will describe the decision, what I think is going to happen, potential ramifications, and rationale for the decision. Initially, I thought it might have been an oversight on the part of CPV Valley but the more I poked around the more evidence surfaced that this was a politically motivated decision that will likely end up in court.

Background and Decision

On July 8, 2018, the Middletown Times-Herald Record reported that the “$900 million, 680-megawatt plant built between Interstate 84 and Route 6 will be connected to a natural-gas pipeline in a matter of days, and should begin full-time operation in a matter of weeks.” At the time the last apparent hold up was connecting the plant to the natural gas transmission system after New York Governor Cuomo’s administration tried to block the construction of the connecting pipeline after the plant was nearing completion. However, CPV Valley did not apply for their Title V operating permit and DEC said in their letter that “CPV may not lawfully operate the facility”.

On August 3, 2018, the Middletown Times-Herald Record reported:

The state Department of Environmental Conservation announced its decision in a letter to CPV officials on Wednesday, one day after the air permit DEC granted in 2013 expired. A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.

It was not immediately clear if CPV, which had planned to begin operating the $900 million power plant in Wawayanda this month, will contest the decision, or comply with it by applying for a Title V permit. It also was unclear how long it would take to obtain such a permit and what obstacles the company could face. The DEC letter said the permit application requires a public comment period and a 45-day review period for the EPA.

What is going to happen?

I believe that this article is correct that this represents a delay rather than a sign that the facility will not operate someday. The Albany Times Union headline that says State pulls plug on controversial Orange County power plant is incorrect and a Riverkeeper article that suggests that this permit denial indefinitely shuts down the power plant are wrong.

This is a controversial power plant for two reasons. Firstly, there is strong environmentalist opposition to any fossil fuel infrastructure and second there is an associated political scandal. This is election season in New York and the Governor is trying to keep his environmental credentials as clean as possible. This facility’s opponents consistently link this plant to fracked natural gas and point out that it will delay the transition to renewables and call for its permanent closure. Nothing about this administration shocks me anymore so even shutting down a plant needed to replace power from the closure of Indian Point so I would not be that surprised to see them propose that but I can guarantee that there is no way that the permitting process for the missing permit will be completed until well after the election.

The political scandal occurred when a top Cuomo aide was found guilty of getting an executive from CPV to get his wife a high paying “low-show” job for his wife. The payments were in exchange for helping to win state power contracts. Apparently CPV took the lobbying approach to get their power plant commissioned because there is a money trail to politicians associated with the plant. As a result of this there have been calls to prevent the power plant from opening.

Ramifications

I have written about the role of CPV Valley as replacement power for Indian Pont (a nuclear station that Cuomo has forced into accepting a shutdown in April 2021. The New York Independent System Operator concluded that there would be no issues with replacement power if three major generation facilities were completed including CPV Valley. As noted above, because I believe this represents a delay rather than a cancellation I do not expect that to be an issue. However, if Cuomo’s political team decides to go all in for the environmentalist vote and he refuses to give them an operating permit reliability issues will arise.

I have always been on the technical side of things in the power industry. My dealings with the business side of the house were uniformly stressful because their idea of long lead time was tomorrow and environmental permitting takes time so I was always pushed to produce faster. Nonetheless I question whether permanently shutting down a completed power plant makes NY “Open for Business” generally. If I were on the business side of a power generating company I certainly would not be comfortable proposing to build a new power plant to replace the old power plants that the NYS Department of Environmental Conservation (DEC) wants shut down. It will be interesting to see how this turns out not only in the short term but also the long haul.

Rationale

I did not understand how CPV Valley got into a position where they did not even have an application listed on the NYS DEC draft Title V permit website. Title V permits are described as the “operating permit”. How in the world did CPV Valley think that they would not need that?

The Middletown Times Herald-Record article says “A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.” Trying to determine what that statement meant was a challenge.

According to the CPV Valley website description of the permitting approval process the first permitting submittal was completed in March 2008. The Town of Wawayanda Planning Board SEQRA Findings Statement was published on May 23, 2012.

In 2013 there was a revision to 6 CRR-NY 201-6.2 Permit Applications to clarify the acceptable time frame for the submittal of Title V permit applications: Renumbered Paragraphs 201- 6.2(a)(1) through 201-6.2(a)(4) were revised to clarify the acceptable time frame for the submittal of Title V permit applications. According to this rule they should have had a complete application prior to construction:

The owner or operator of a facility subject to this Subpart shall submit a complete application, as defined in Part 621 of this Title and this Subpart, for initial issuance of a title V permit, or renewal, in accordance with the timeframes established under paragraphs (1) through (6) of this subdivision:

(1) Prior to the commencement of construction of a new facility subject to permitting under this Subpart

The SEQRA Findings Statement mentions that they submitted an “application for regulatory agency review in conjunction with Federal and State PSD and non-attainment new source review requirements and process” before March 2012. There is no mention of a Title V permit in the document.

It looks like there was a rule change after the project was permitted and the revision clearly says that a new facility has to have a complete Title V permit before they can begin construction. I can only guess that CPV Valley thought that because they had a State facility permit that it would roll over as if it were an existing facility modification per sub-sections (2) and (3):

(2) Prior to the commencement of operation of new emission unit(s) or modified emission units at an existing facility that make the facility subject to title V permitting. The owner or operator of a facility subject to this provision may choose to apply for a State facility permit pursuant to section 201-5.2 of this Part. Upon issuance, that permit shall authorize both construction and operation of the new or modified emission units until a title V permit is issued in accordance with this Subpart.

(3) Prior to the commencement of construction of a new emission unit at an existing title V facility. The owner or operator of an existing title V facility, which is being modified by the addition of a new emission unit comprised solely of new emission sources, may apply for a State facility permit pursuant to section 201-5.2 of this Part that will authorize construction and operation of the new emission unit upon issuance. A title V permit modification is required within one year of the commencement of operation of the new emission unit.

I did a Google Search for CPV Air State Facility Permits and found the pre-construction permit (CPV Valley Permit). It turns out the CPV Valley thought that were all right because their permit said “A Title V permit application must be submitted to the Department within one year of commencement of operation of this facility.” The rationale was that the application would include “start-up, shutdown, and fuel switching data to establish enforceable combustion turbine start-up, shutdown, and fuel switching emission rates for NOx, CO, and NH3, and confirm that such established rates would not result in a violation of applicable NAAQS.”

Back to the statement from the Middletown Times Herald-Record that “A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.” I am no lawyer but as far as I can tell the change in the DEC regulations in response to the federal regulations came in 2013 before the CPV Air State Facility permit was issued that explicitly said the Title V application had to be submitted within one year of the commencement of operations and if it was after CPV Valley has a permit that shields them from this change. I don’t think that there is any chance that this won’t be headed to court.

New York State Air Pollution Emissions Status

I do not think that the general public understands how much improvement there has been to New York State’s air quality and how big the emissions reductions have been. This is a summary of the trend of SO2, NOx and CO2 since 1999 in New York State and it shows extraordinary improvements. Later, I will prepare a summary of the changes to the air quality measurements which also show big improvements.

I have to apologize for my inability to incorporate tables and graphs in the body of a WordPress blog post. If I had that ability then this post would be a heck of a lot easier to read. Instead I offer three alternatives. Each of the figures and tables is available by links in the following post. I also have prepared a version of this post and you can view NYS Air Pollution Emission Status Summary as a pdf document. Finally that document, three spreadsheets with the data, tables and graphs, and a detailed documentation summary of the data processing analysis are available at the NY Pragmatic Environmentalist dropbox.

The emissions and operating data used for this summary were downloaded from the EPA Clean Air Markets Division Air Markets Program Data website. The website includes a query tool that I have used for years to extract specific data from national emission monitoring programs. For this analysis I downloaded SO2, NOx and CO2 emissions data, operating time, heat input and load data as well as unit-specific information on fuel use and unit type so that I could show what changes caused the emissions reductions. Because this is a New York-centric blog I primarily focused on New York emissions.

Figure 1 NYS SO2 Emissions by Fuel Type documents the annual SO2 emissions from 1998 to 2017 by the primary fuel type reported to EPA. In 1998 SO2 emissions totaled 309,775 tons and in 2017 were only 2,561, a 99% reduction. Table 1 EPA CAMD Data New York State Air Pollution Emissions from All Program Units presents the emissions totals and includes the coal-firing totals. It turns out that reductions in coal-firing and residual-oil firing account for the reduction in SO2 mass. New York is unique in that there are five relatively new large residual oil-fired boiler units in the state. Although there were changes in the limit of sulfur in fuel the primary driver for the reductions was the cost of oil relative to natural gas coupled with the fact that there is essentially no SO2 emitted by natural gas firing. At this time these units survive because they can provide 1000s of MW when necessary and their operational costs are low enough that the payments to be able to provide that capacity are sufficient to be viable. Note, however, that they cannot reduce emissions much more because they still have to run a couple of times a year to prove that they can provide capacity. Coal-firing units in New York were older and were required to install extensive controls over this period to continue to operate. The cost differential between natural gas and coal was the final blow to viability and for all intents and purposes only one facility remains operating today. Governor Cuomo has proposed regulations to eliminate coal burning at even that unit by 2020. These data suggest the de minimus level of future SO2 emissions will be around 1,000 tons per year.

Figure 2 NYS NOx Emissions by Fuel Type documents the annual NOx emissions from 1998 to 2017 by the primary fuel type reported to EPA. In the peak year of 2000 NOx emissions totaled 101,635 tons and in 2017 were only 11,253, an 89% reduction. The coal and residual oil units were also the largest sources for NOx so they account for most of the reduction. On the other hand there still are significant NOx emissions from natural gas firing so the reductions are not as large. Eliminating coal firing will drop emissions another 2,770 tons from 2017 levels. Further reductions will come from replacing older, higher emitting units with new cleaner ones. If I had to guess on a future de minimus level it would be around 7,000 tons per year.

Figure 3 NYS Statewide SO2 and NOx Rates documents the changes in annual emission rates (lbs/mmBtu) over the same period. The reason for these changes is the same as the mass changes. Keep in mind that mass emissions are a function of these rates and the operating levels. If there is more demand on fossil-fired units then they will emit more. Of course, if renewable energy reduces the need for fossil-fired units or if demand for electrical energy goes down due to energy efficiency efforts then mass emissions will go down.

CO2 emissions are a bit complicated. There are two CO2 data sets included: one from the Regional Greenhouse Gas Initiative (RGGI) program units and the other from all programs. In New York there are some small peaking turbines that are not presently included in RGGI. Unfortunately the annual emissions are not directly comparable because units that are not affected by RGGI do not have to report annual emissions only the ozone season (May through September). Also note that the RGGI CO2 Allowance Tracking System (COATS) data system also provides annual numbers for the RGGI only units and those numbers are the same as the RGGI only units from CAMD. Figure 4 NYS CO2 Emissions by Fuel Type lists the annual CO2 emissions from 1998 to 2017 by the primary fuel type reported to EPA. Table 2 EPA CAMD Data NYS Air Pollution Annual Emissions from RGGI Program Units lists the annual emissions from these units. These data show that CO2 emissions reductions to date have been caused by fuel switching but importantly there isn’t much left to switch. As a result, future CO2 emission reductions will be more difficult.

In addition to annual market trading programs there are trading programs that run from May 1 to September 30 for NOx emissions to reduce ozone. Figure 5 NYS Ozone Season NOx Emissions shows the Ozone Season NOx emissions from 1999 to 2017 by the primary fuel type reported to EPA. In 1999 NOx emissions totaled 47,314 tons and in 2017 were only 5,533 tons, an 88% reduction. Figure 6 NYS Ozone Season NOx Rate documents the changes in ozone season emission rates (lbs/mmBtu) over the same period. The state-wide NOx rate during the Ozone Season in 1999 was 0.202 lbs per mmBtu and was 0.053 in 2017, a 74% reduction. Similar to the annual numbers these reductions are primarily the result of fuel switching. Finally Table 3 New York State Ozone Season NOx Mass by Unit Type lists the Ozone Season NOx mass, heat input and NOx rate values sorted by major unit types: boilers, combined-cycle turbines and simple cycle turbines.

These trends show that New York State has done a superlative job reducing emissions. There also are implications for future air pollution control programs in these data. Any future reductions simply cannot be as effective because the current emissions are so low. In addition, any program that claims air pollution emission benefits for reducing CO2 must recognize the current low rates and mass emissions or those benefit estimates are higher than appropriate.

Unintended Ramification of the Finger Lakes LPG Storage Community Character Decision

On July 12, 2018, the New York State Department of Environmental Conservation (NYSDEC) Commissioner Basil Seggos issued a decision for a proposal to construct and operate a new underground liquefied petroleum gas (LPG) storage facility for the storage and distribution of propane in the town of Reading in the Finger Lakes region of New York. The decision denied the permit applications for the proposed project on the grounds the facility would have a significant adverse impact on community character in the local area and the Finger Lakes region. This post compares the changes made to the proposed project by the Finger Lakes LPG project with an industrial wind complex, the Ball Hill Wind Energy Project between the initial environmental impact statement and the final environmental impact statement. It is not clear to me how any wind energy project can pass the bar set by this community character decision.

DEC Decision

I discussed the NYSDEC decision in an earlier post where I concluded that it values qualitative value judgements over any quantitative assessment and will establish “not in my backyard” arguments as an acceptable rationale for denying just about any project. I determined that based on the conclusion of the opening section of the decision by Basil Seggos that states:

Notwithstanding that certain issues can be identified as adjudicable, the record is more than sufficient at this stage for me to make a final determination based on the requirements of the State Environmental Quality Review Act (SEQRA). The record demonstrates that the impacts of this project on the character of the local and regional community, including but not limited to the environmental setting and sensitivity of the Finger Lakes area and the local and regional economic engines (e.g., wine, agricultural and tourism industries), are significant and adverse and the project does not avoid or minimize those impacts to the maximum extent practicable. Furthermore, the significant adverse impacts on community character are not outweighed or balanced by social, economic or other considerations, and cannot be avoided or minimized to the maximum extent practicable by the proposed mitigation measures.

My decision, together with the draft supplemental environmental impact statement (DSEIS) and the comprehensive record, hereby serves to finalize the DSEIS for this action. Based upon my review, I am not able to issue a findings statement in support of this project and, accordingly, the permit applications for this proposed project are to be denied.

Frankly, I was not familiar with community character impacts so I relied on the description in the decision. Community character is described in the decision as follows:

Community character is specifically referenced by the State Environmental Quality Review Act (SEQRA). SEQRA defines “environment” to include “the physical conditions which will be affected by a proposed action, including . . . existing patterns of population concentration, distribution, or growth, and existing community or neighborhood character” (ECL 8-0105[6]; see also 6 NYCRR 617.2[l]). Unique to each case is the “community” to be evaluated – it will relate to the type of action that is being proposed, the factual circumstances and the nature of the impacts. For some projects, the “community” may be only the municipality in which the proposed action would occur. Here, the interests of a range of communities within the vicinity of Seneca Lake, as in part reflected by the submissions of the Seneca Lake Communities in this proceeding, are clearly relevant to the analysis. The evaluation of community character in this specific matter is not solely limited to the communities (Town of Reading and County of Schuyler) in which the proposed facility would be sited but entails an evaluation of communities in and around Seneca Lake and the Finger Lakes region whose economies and environmental interests are directly intertwined.

One community character rationale is particularly apt for this comparison. The decision noted that “impacts to noise and aesthetic resources as revealed on the current record are essential components in the evaluation of impacts on community character in the context of this proposed project”.

The Finger Lakes LPG Storage Project as Described in the Decision

Finger Lakes LPG Storage, LLC originally proposed to build a facility that would store propane and butane in existing solution-mined underground caverns in the Syracuse salt formation. As originally proposed, a maximum of 2.10 million barrels (88.20 million gallons) of LPG in the form of liquid propane and butane was to be stored in the caverns seasonally, displacing some of the brine currently filling them. The stored LPG was to be withdrawn by displacement of propane with brine when demand occurred during the heating season, and displacement of butane with brine during the gasoline blending season.

During storage operations, the brine displaced by LPG or butane was proposed to be stored and contained in two double-lined brine ponds. One 2.25 acre pond would have had a capacity of approximately 0.17 million barrels (7.14 million gallons). The second pond was 6.35 acres, and would have a capacity of approximately 0.80 to 0.81 million barrels (33.6 to 33.9 million gallons)

The facility would connect to an existing interstate pipeline for shipment of LPG into and out of the facility. As originally proposed, LPG was also to be shipped out by truck, and by rail. The original project included the construction of a new rail and truck LPG transfer facility, consisting of a six-rail siding capable of allowing loading and unloading of 24 rail cars within 12 hours, and a truck loading station capable of loading four trucks per hour.

During the application process modifications were proposed to reduce the scale and environmental impacts of the project in response to local stakeholder concerns. The modifications eliminated the proposal to store liquid butane at the facility and reduced propane storage capacity from 2.1 million barrels to 1.5 million barrels; eliminated the project’s rail and truck loading facilities so all deliveries of liquefied petroleum gas would be by pipeline; eliminated one of the brine ponds; and, for lack of a better term offered bribes as they proposed to “provide resources ranging from financial resources to technical resources (mining data) to support community initiatives for the preservation and improvement of water quality in the area, including Seneca Lake”.

Ball Hill Windpark as Described on the Project Website

Noble Ball Hill Windpark, LLC originally proposed to construct and operate an approximately 94.5 megawatt (MW) wind energy facility in Chautauqua County, New York in 2008 and submitted an Environmental Assessment Form. According to Appendix F – 2008 Environmental Assessment Form and 2015 Board Resolution the project consisted of the following:

60 wind turbines;
16 miles of access roads;
An electrical collection system along the same right-of-way corridor as the access roads with 23.8 miles buried and 6 miles of overhead.
A new substation with a footprint of approximately 200 by 300 feet;
A new switchyard with a footprint of approximately 300 by 500 feet; and
An operations and maintenance building site of 5 acres

In November 2016, Ball Hill Wind Energy, LLC submitted a Final Environmental Impact Statement with changes to the project:

29 instead of 60 wind turbines;
13 instead of 16 miles of access roads;
An electrical collection system along the same right-of-way corridor as the access roads with 19.8 miles instead of 23.8 miles buried and 5.7 miles instead of 6 miles of overhead.
A new substation with a footprint of approximately 175 by 190 instead of 200 by 300 feet;
A new switchyard with a footprint of approximately 225 by 611 instead of 300 by 500 feet; and
An operations and maintenance building site of 2.8 acres

I was unable to find a description of the turbines originally proposed but in 2008 the local township wind law limited the maximum height to 420’. In 2011 the developer submitted an amended application using a new turbine design. In September 2016 the developer requested that be changed to 495’ to allow for the use of “newer, more efficient turbine technology. The 2016 Supplemental Draft Environmental Impact Statement states that there will be 34 3.45MW Vestas wind turbines with a hub height of 72.5m and a 51.2 blades. I understand that the current developer recently requested another change to the maximum height restriction to 600’ but do not know if that is for these Vestas turbines or another, and presumably, higher design.

Noise Comparison of Projects

I am guessing at the noise impacts of the final Finger Lakes LPG Storage proposal. It proposed to use two electric 75 horse power pumps to pump product from the tanks into the pipeline to the electronically driven injection pumps where those pumps will then be used to inject the product into the caverns. I expect that insulated walls and advanced fan technology would have been used to dampen sound. Moreover, because the proposed plant area is adjacent to a NYSE&G building complex and NYS Route 14 there was a certain amount of ambient noise in the area anyways.

According to the Ball Hill Windpark 2018 Proposed Modifications Summary of Environmental Impacts:

The new proposed turbine is quieter or the same at 750 out of 769 receptor points studied. At the remaining 19 points, the sound level would increase imperceptibly by 1-2 dBA. The Project remains fully compliant with Town and NYSDEC noise standards.

In summary, I conclude that the noise impacts from the two projects are essentially the same. Without more research I am not sure why the opponents of Finger Lakes LPG Storage were so upset about noise because the revised plan eliminated truck and rail transport which would have affected noise levels.

Aesthetic considerations Compared

The primary aesthetic issue is visibility and Ball Hill Windpark will have 29 highly visible wind turbines. The project will use a VI26 class turbine which is a three-bladed horizontal-axis wind turbine with a rotor diameter of approximately 413 feet. The turbine rotor and the nacelle are mounted on top of a tubular tower giving a rotor hub height of approximately 285 feet. The maximum height for the turbine is below 500 feet when a rotor blade is at the top of its rotation. Once installed, the wind turbine would occupy a round base approximately 60 feet in diameter.

According to the 2018 Proposed Modifications Summary of Environmental Impacts wind turbines will be visible in 33.9% of the area within the 5-mile viewshed. According to the 2008 Environmental Assessment Form the smaller turbines originally proposed would be visible from greater than 5 miles from a parcel of land which is “dedicated to and available to the public for the use, enjoyment and appreciation of natural or man-made scenic qualities” and “an overlook or parcel of land dedicated to public observation, enjoyment and appreciation of natural or man-made scenic qualities”, and a “site or structure listed on the National or State Registers of Historic Places” and between ½ and 3 miles to a State Wildlife Management Area.

In addition, there are the access roads, overhead electric lines, switchyard, substation and operations and maintenance building site that all have an aesthetic effect.

The final proposal for the Finger Lake LPG Storage facility was a brine pond, a compressor station, and a support building. The more visible (and eventually eliminated) brine pond was proposed to be a maximum height of 50 feet above its down slope toe on a site with variable slopes in the 8 to 12 percent range. The slope tends to steepen downhill in the area under the proposed impoundment structure. When full, the pond surface will be approximately 400 feet above Seneca Lake elevation, at a horizontal distance from the lake of approximately 2400 feet.

The Draft Environmental Impact Statement noted:

The brine pond embankment and portions of site clearing will be visible or partially visible from NYS Route 414 and Seneca Lake. Once the brine pond is constructed and the side slopes of the embankment are vegetated, the view from Seneca Lake and NYS Route 414 is anticipated to be similar to the current view. The proposed brine pond site will be visible from NYS Route 14 and NYS Route 14A. The truck transfer facility will also be visible from NYS Route 14A. Potential visual impacts along NYS Route 14 and NYS Route 14A will be mitigated during site development activities through strategic native plantings and seeding at both the brine pond site and the truck transfer facility site. It is not anticipated that the proposed project will result in any significant adverse visual impacts.

Because this describes the more visible brine pond and even this pond’s visibility could be mitigated by planting native trees I conclude that the pond has a negligible impact on visibility.

In summary, the Ball Hill Windpark will be visible from 1/3 of the area within 5 miles whereas the most visible component for Finger Lake LPG Storage can be screened such that there is no longer visible. The compressor station and support building aesthetics impacts cannot be considered to have a greater effect than the access roads, overhead electric lines, switchyard, substation and operations and maintenance building site for Ball Hill Windpark. Nonetheless Commissioner Seggos claims that the gas storage facility has significant adverse impacts on community character.

But it is worse. According to the Ball Hill Windpark 2018 Proposed Modifications Summary of Environmental Impacts:

The new turbine increases by 3 the number of homes that would experience 10-20 hours per year of shadow flicker, and by 23 the number of homes that would experience 40+ hours per year. Of these homes, 11 are project participants. The remaining 215 homes would experience the same or fewer hours of shadow flicker annually as in the 2016 Permit.

There is no equivalent impact for Finger Lakes LPG Storage.

Conclusion

I can only conclude that if the Finger Lakes LPG Storage project has sufficient adverse impacts on community character associated with noise and aesthetics then every wind development project must have a similar adverse impact. The precedent set by this case would seem to preclude wind energy.

Setting a Price for Carbon in the NY Wholesale Electric Market for the Layman

This post discusses the New York effort to put a price of carbon on the wholesale electric market. I think New Yorkers deserve answers to the following questions:

What is this proposal going to do?
How is it supposed to work?
How much will it cost?
What impact will it have?

This post will attempt to provide my answers to these questions to summarize my concerns with the proposal.

I have been submitting comments throughout the process (here and here) and I have posted on this here. My comments have been submitted as a private retired citizen. They do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone. The majority of New York State (NYS) ratepayers are unaware of the ramifications of this proceeding and have never heard of the Social Cost of Carbon (SCC). I was motivated to submit comments and prepare these posts so that there is at least one voice of the unaffiliated public whose primary interest is an evidence-based balance between environmental goals and costs to ratepayers. There are significant hurdles to implementing carbon pricing in general and as proposed in the straw proposal that should be considered. There are unintended consequences to the proposal that will result in enormous costs for a plan that will have Inconsequential tangible benefits to the environment.

Carbon Pricing

The fundamental idea behind carbon pricing is that when carbon dioxide emissions cost money society will produce less of them. Economists support the idea that with a carbon price the market efficiently cuts emissions. Note, however, in order to operate efficiently the carbon price has to be applied to the whole economy.

Not surprisingly, the devil is in the implementation details. A price has to be set for each ton of carbon dioxide emitted but what should the price be and how should the emissions be measured. The disposition of the money earned by the tax is another major issue. In order to minimize regressive effects and let the market efficiently decide how best to make reductions many economists favor a revenue-neutral approach where the carbon tax revenues replace other tax revenue streams and no investments are determined by the regulators.

New York Carbon Pricing Proposal

On August 11, 2017, the New York Independent System Operator (NYISO) and the New York State Department of Public Service (DPS) jointly initiated a process to engage with stakeholders to examine the potential for carbon pricing in the wholesale energy market to further New York State’s energy policy goals. This initiative began in the fall of 2016 as a project commenced by the NYISO through its stakeholder process. The NYISO retained The Brattle Group to evaluate conceptual market design options for pricing carbon emissions in the competitive wholesale energy markets administered by the NYISO. That report, Pricing Carbon into NYISO’s Wholesale Energy Market to Support New York’s Decarbonization Goals, (Brattle Report) forms the basis of the proposal.

The Integrating Public Policy Task Force (IPPTF) was created to solicit stakeholder feedback for the carbon pricing proposal. The IPPTF meeting materials page lists all the documents produced by NYISO and stakeholder comments. Frankly, this is a frustrating process. This is illustrated by the fact that there are meeting agendas but no meeting minutes. For example, at the May 21, 2018 meeting emissions monitoring experts from the generating industry had a panel discussion on emissions reporting to explain how CO2 is measured and reported. One of the major points was that there is a significant timing issue between the needs of the carbon pricing initiative and regulatory requirements which mandate post-monitoring quality assurance adjustments. On July 16, 2018 NYISO presented its general recommendation for emissions reporting and the ensuing stakeholder discussion ignored the expert presentation discussion of the timing issue. If minutes were available then the timing issue would have been documented. More importantly, It is not clear if the NYISO final recommendation will incorporate the concerns of the experts.

In April 2018, NYISO posted a straw proposal that outlined a potential design for incorporating the cost of carbon emissions into the wholesale electricity market of New York State. The straw proposal recommends that the DPS set the carbon price value and has suggested using the Social Cost of Carbon (SCC) as estimated by the U.S. Interagency Working Group (IWG) on the Social Cost of Carbon, starting at $43/ton CO2 today and rising to $65/ton by 2029[1]. The straw proposal recommends that all internal suppliers participating in wholesale electric energy markets pay the carbon charge. Most of the affected sources already report hourly CO2 emissions but there remain difficulties integrating their existing reporting requirements and this new requirement (primarily timing issues) and there are some affected sources that do not report CO2 that will have to develop the necessary infrastructure to report hourly data. Further complicating the problem is the issue of how to deal with imported and exported power. Finally, there has been limited discussion of the disposition of the carbon price funds but it is noticeable by its absence that the concept of returning all the money to rate payers has not been suggested. Instead, it appears that portions of this will be an additional funding mechanism for the Governor’s Reforming the Energy Vision initiative.

Carbon Price

My first concern with this proposal is the choice of the carbon price (for example my comments on the April 23, 2018 addressed this). The SCC value proposed was developed by a working group established by an Obama Executive Order to estimate the economic harm of CO2 emissions. My fundamental problem is that the IWG SCC value does not accurately reflect the current state of the science relative to the probability of temperature being highly sensitive to CO2. As a result that value over-estimates the potential benefit of New York emission reductions. Ultimately the SCC relies on a complex causal chain from carbon dioxide emissions to social impacts that are alleged to result from those emissions. Richard Tol testified that these connections are “long, complex and contingent on human decisions that are at least partly unrelated to climate policy. The social cost of carbon is, at least in part, also the social cost of underinvestment in infectious disease, the social cost of institutional failure in coastal countries, and so on.”

Potential Costs to Consumers

Table 1 Potential Costs of the Carbon Pricing Initiative is my best estimate of potential costs. The SCC column lists the annual values from 2015 to 2029. In order to know the costs we have to know the CO2 emissions. I used NYS Regional Greenhouse Gas Initiative (RGGI) historical emissions for 2015 to 2017 and then assumed that emissions would drop 1.5% per year from the 2017 values. At a minimum, ratepayers in New York will have pay the SCC value times the CO2 emissions from the affected New York generators (SCC Charge column in Table 1).

The Brattle Report proposes breaking the SCC charge into two components: the existing RGGI costs and the carbon price to the wholesale market. The RGGI allowance prices in Table 1 are the observed values from 2015 to 2018 and the value assumed by Brattle for 2025. The RGGI costs will equal the RGGI allowance price times the CO2 emissions (RGGI Charge column in Table 1). These are costs already committed to NY ratepayers albeit they are supposed to be invested for the benefit of consumers.

The IPPTF refers to the difference between the SCC Charge and the RGGI Charge as the Residual (Residual column in Table 1). The disposition of this money has not been finalized, but we know that a portion will be returned to the Load Serving Entities to offset ratepayer costs and the rest will be invested in carbon-reducing programs.

The Brattle Report analysis of the impact on customer costs uses average annual values and concludes that the carbon charge would have “approximately zero net impact on customer costs”. However, the point of my hourly analyses in my comments submitted on July 5, 2018 is that I think that the carbon charge will raise net energy costs. When I calculated the hourly impact I estimate that the total cost would have been $3,027,266,788 (Energy Increase column in Table 1). Importantly, none of the difference ($1,728,574,766) between this value and the SCC Charge (Energy Impact column in Table 1) will be returned to customers.

Impact

New York State has never provided an estimate of the effect of its clean energy programs on global warming. Governor Cuomo’s plan to “rebuild, strengthen and modernize New York’s energy system is called Reforming the Energy Vision (REV). The ultimate goal of REV is to change the energy system of New York to reduce greenhouse gas (GHG) emissions 80% from 1990 levels by 2050 (“80 by 50”). In the absence of any official quantitative estimate of the impact on global warming from REV or any other New York State initiative related to climate change I did my own calculation.

The ultimate impact of the REV 80% reduction of 188.7 million metric tons on projected global temperature rise would be a reduction, or a “savings,” of approximately 0.0028°C by the year 2050 and 0.0058°C by the year 2100. In order to give you an idea of how small this temperature change consider changes with elevation and latitude. Generally, temperature decreases three (3) degrees Fahrenheit for every 1,000 foot increase in elevation above sea level. The projected temperature difference is the same as going down 18 inches. The general rule is that temperature changes three (3) degrees Fahrenheit for every 300 mile change in latitude at an elevation of sea level. The projected temperature change is the same as going south 0.4 miles.

My calculated values for temperature change are based on the “consensus” estimates of the Intergovernmental Panel on Climate Change which I personally believe over-estimate the impact of temperature changes caused by greenhouse gas emissions. My calculations show that REV and the carbon pricing initiative cannot claim that any observable impacts for the projected small change in temperature due to these emissions reductions.

Conclusion

This post did not delve into the many technical issues associated with implementing carbon pricing in general and as proposed in the straw proposal. Nonetheless, it raises basic questions. The increase in energy prices beyond the carbon price itself is an unintended consequence that will basically double the costs of the program. At the end of the day those enormous costs will have inconsequential tangible benefits to the environment. Even if you believe that we need to do something about climate change these numbers do not support this proposal.

[1] See New York Public Service Commission Order Adopting a Clean Energy Standard (2016) pp. 49, 51, and 131 http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId=%7B1A8C4DCAE2CC-

449C-AA0D-7F9C3125F8A5%7D, and U.S. Government (2015) Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. May 2013, revised July 2015.