Retrofitting Early Offers Health and Financial Benefits, Less Risk
FOR IMMEDIATE RELEASE: Wednesday, Aug. 15, 2012
CONTACT: Erin McKenzie
(919) 613-3652
erin.mckenzie@duke.edu
DURHAM, N.C. -- North Carolina electricity consumers could save millions of dollars because the state began retrofitting power plants with pollution-reducing technologies a decade ago, well in advance of pending federal mandates, according to a Duke University study.
The cost for the retrofit technologies could increase as utilities nationwide upgrade to comply with the U.S. Environmental Protection Agency's Cross-State Air Pollution Rule (CSAPR) and Mercury and Air Toxics Standards (MATS) rule.
"The small timeline to meet EPA requirements could drive the cost of retrofits up 25 percent or more," said David Hoppock, lead author and research analyst at Duke's Nicholas Institute for Environmental Policy Solutions. "North Carolina's efforts to retrofit ahead of these rules may have saved the state roughly $600 million in capital compliance costs, as other states rush to install these technologies in a shorter window."
The new EPA rules require power plants to install technologies that reduce sulfur dioxide (SO2),nitrogen oxide (NOx) and other harmful emissions. In 2002, North Carolina lawmakers enacted the Clean Smokestacks Act, which required power plants covered by the law to reduce their NOx emissions by 60 percent before 2009 and SO2 emissions by 72 percent before 2012, relative to 2002 emissions.
The act requires emission reductions similar to MATS and CSPAR, positioning the state to better comply with the EPA rules. This has allowed North Carolina to stagger the cost of pollution-control technologies over a longer period and avoid a sudden spike in consumer electricity rates.
"EPA compliance costs will be passed onto the consumers," Hoppock said. "North Carolina's ability to implement the retrofits in 10 years versus the four or five years power plants will have under the new EPA rules reduced the risk that consumers will pay higher electricity rates."
Nicholas Institute researchers examined how retrofitting power plants affected air quality in North Carolina. They found the steps taken by the state to cut pollution removed about 75 percent of SO2 and 66 percent of NOx emissions from the air among plants covered by the Clean Smokestacks Act, compared to 2002 levels.
The researchers analyzed EPA data to calculate that early action by North Carolina to reduce emissions created health benefits worth as much as $16 billion.
"North Carolina addressed public health concerns within the state and enjoyed years of cleaner air for a price that is similar to, and potentially less than, what other states are likely to pay to comply with the EPA rules," said Sarah Adair, research associate at the Nicholas Institute. "Other states could look for similar opportunities to get ahead of future federal environmental requirements while gaining benefits and pursuing state energy and environmental goals."
Hoppock and Adair co-authored the paper with Nicholas Institute colleagues Brian Murray, director for economic analysis, and Jeremy Tarr, policy counsel.
To view the white paper, "Benefits of Early State Action in Environmental Regulation of Electric Utilities: North Carolina's Clean Smokestacks Act," visit: http://nicholasinstitute.duke.edu/climate/policydesign/benefits-of-early-state-action-in-environmental-regulation-of-electric-utilities/
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