VML Environmental Quality Policy Meeting: Regional Greenhouse Gas - - PowerPoint PPT Presentation

VML Environmental Quality Policy Meeting: Regional Greenhouse Gas Initiative

Dawone Robinson Virginia Policy Director Chesapeake Climate Action Network

Presentation Overview

• Need for Solutions – Two Parts
• HB 2205/SB 1428 – The Regional Greenhouse Gas Initiative (RGGI)
• Results of RGGI in Participating States
• Q & A

Need for Solutions: Part I

The Clean Power Plan

Reduction Goals Timeline

• EPA Timeline
• June 2, 2014 – EPA draft rules announced
• Aug. 15, 2014 – Deadline for DEQ public comment
• Dec. 1, 2014 – Deadline for state comment to EPA
• August 2015 – EPA final rules announced
• June 2016 - 2018 – Virginia State Implementation Plan due
• *June 2018 if Virginia joins regional collaboration like the Regional

Greenhouse Gas Initiative (RGGI)

• 2030 – Reduction goals achieved for Virginia
• 2032 – Reduction goals achieved for 3 year averages

CO2 Reductions Between 2012 & 2030

Emissions Reduction Option 1: In-state Only

Building Block Value Allocated in Goal-Setting Formula

1) Heat rate improvement at fossil fuel power plants Average heat rate improvement of 6% for coal steam electric generating units (EGUs) 2) Shifting dispatch from coal to natural gas Dispatch to existing and under-construction natural gas combined cycle (NGCC) units to up to 70% capacity factor 3) Increasing renewable and nuclear generation Dispatch new nuclear generation under construction, moderate deployment of new renewable generation, and continued use of existing nuclear generation 4) Increasing demand-side energy efficiency Increase savings from energy efficiency programs to 1.5% annually

Emissions Reduction Option 2: Multi-state

• PJM Interconnection – World’s largest electricity grid operator
• PJM operates electricity grid covering 14 states, including VA
• November ‘14 and March ‘15 Analysis: Multi-state is cheaper
• State-by-state compliance will require more [coal plant] retirements

than regional compliance and be almost 30% more expensive.

• “States have the ability to trade reductions among each other to achieve

lower costs of compliance” ~ PJM Chief Economist Paul Sotkiewicz

• “Not only is it more cost effective to do regional compliance, but there’s

now fewer units at risk for retirement” ~ PJM’s Sotkiewicz

Need for Solutions: Part 2

Resources for Flooding Adaptation

CCAN Safe Coast Virginia Report Press Conference – 7.9.14

Outlines a 10-point plan to mitigate and adapt to sea level rise in Virginia

Virginia Institute of Marine Science (VIMS)

Sea Level Rise Projections in Hampton Roads Historical Flooding in the Hague (Norfolk, VA)

$1 billion in adaptation funding needed for Norfolk

Fugro Analysis in 2012 – U.S. Branch of a Dutch Engineering Firm

The Virginia Coastal Protection Act

HB 2205/ SB 1428 – The Regional Greenhouse Gas Initiative (RGGI) & Creation of the Commonwealth Resilience Fund

The Virginia Coastal Protection Act SB 1428/HB 2205

• Declares that sea level rise challenges needs urgent attention
• Joins Virginia into the Regional Greenhouse Gas Initiative (RGGI)
• Instructs Virginia’s Department of Environmental Quality (DEQ) to

establish rules for participation and allocation of allowances

• Creates The Commonwealth Resilience Fund to accept RGGI

auction allowances and any additional state appropriations

• Requires The Commonwealth Resilience Fund to be appropriated

to adaptation efforts and other state initiatives

Regional Greenhouse Gas Initiative (RGGI)

• Regional cap-and trade program
• Power plants 25 MW or greater
• Carbon allowance for every ton of CO2
• RGGI sets cap; lowers it 2.5% annually
• Power plants decide how to stay below cap
• Allowances sold at quarterly auction –

returned to states for re-investments

• Roughly $200 million in projected RGGI

auction revenue annually through 2030

• Solution to EPA’s Clean Power Plan

Commonwealth Resilience Fund - Allocations

HR Adaptation – 50%

• Half ($100 million by

2020) for sea level rise and flooding adaptation

• Business, infrastructure,

residential, and public service for sea level rise and flood risk

RE and EE – 35%

• 30% ($60 million by

2020) for statewide energy efficiency programs

• Half of the above for

low-income residents (at no cost) and moderate- income residents

• 5% ($10 million) for

statewide renewables

SW Recovery – 10%

• 10% ($20 million by

2020) for economic development, education, and workforce training programs in SW Virginia

• Woefully inadequate

existing resources for residents in SW Virginia for economic recovery

RGGI Results Through 2014

Acadia Center Report (2008 – 2013)

• RGGI states cut CO2 2.7 times

faster than non-RGGI states

• RGGI states’ economy grew

2.5 times faster than non- RGGI states

• RGGI states electricity prices

decreased 8% while country increased 6% since 2008

Analysis Group Report (2012- 2014)

• $460 million in bill reductions
• $1.3 billion in net economic

activity

• 14,200 new job years related to

RGGI – all nine states showing net job additions in sector

• EE “stands out as the most

economically beneficial use of RGGI dollars”

17

RESIDENTIAL RATE COMPARISON (DVP CEUR Presentation 7/13/15) Dominion’s typical residential bill is 20% below the national average, 30% below the East Coast average, and 41% below the RGGI states average. Dominion rates have risen by 2% since 2008.

• 5.5%
• 9.8%

* 1,000 kWh monthly usage

$109.48 $137.02 $157.14 $185.13 Dominion National Average East Coast Average RGGI States Average

Customer Bills – U.S. Energy Information Administration (EIA)

Average Residential Monthly Energy Consumption

• Virginia – 1,156 kWh
• National Average – 909 kWh
• RGGI States – 702 kWh

Average Residential Monthly Energy Bills

• Virginia - $125.36
• National Average - $111.08
• RGGI States - $108.43

Questions?

Dawone Robinson – dawone@chesapeakeclimate.org Virginia Policy Director – 804.767.8983(o) Chesapeake Climate Action Network