How Will New Emissions Cap Affect Central MA Power Plants?
Saturday, March 02, 2013
This reduction is about 30 times the amount of emissions released from the state’s largest power plant and comes from the Regional Greenhouse Gas Initiative (RGGI), the nation's first mandatory "cap-and-trade" program for carbon dioxide emissions.
According to data from the Institute for Energy Research (IER), “Cap and trade schemes for carbon dioxide have not worked to reduce emissions. Europe’s Emissions Trading Scheme (ETS) began in 2005. The first phase, from 2005 to 2007, did not reduce carbon dioxide emissions. Instead, overall emissions increased 1.9 percent over that period.”
Despite their conjecture that this method cost was economically harmful and cost jobs, Governor Deval Patrick said the new local measures will have the opposite effects.
New Measures
The agreement calls for the nine states to lower an existing "cap" on power plant emissions from the current level of 165 million tons per year to 91 million tons per year. The administration says this will generate an estimated $350 million in additional revenue for Massachusetts during the period 2012-2020 which will be invested primarily in helping Massachusetts businesses and residences become more energy efficient.
"This agreement means lower greenhouse gas emissions for the region and increased growth and opportunity in our clean energy economy, a major driver of job creation here in Massachusetts," Patrick said. "It is also a strong statement that this region, which comprises nearly 20 percent of the national economy, is serious about being stewards of our environment and addressing climate change."
The plan is already set to deal with an expected rise in the price for allowances and a potential shortage of natural gas. The cost containment reserve will inject additional allowances into the marketplace if allowance prices reach certain price triggers ($4 per ton in 2014, $6 in 2015, $8 in 2016, and $10 in 2017, rising by 2.5 percent, to account for inflation, each year thereafter).
According to the administration, the RGGI Board of Directors conducted extensive modeling on the impacts of these changes on consumers. The modeling shows that the impacts of the new cap will be extremely modest, less than 1 percent in consumer bills.
The average Massachusetts residential customer's monthly electricity bill of $72 will rise by 39 cents; the average commercial customer's monthly bill of $455 will rise by $3.89, and the average industrial consumer's monthly bill of $6,659 will rise by $83.
Effects on the Local Economy
Massachusetts’ Businesses for Clean Energy says that many local business owners are ready for the change. Jim O’Reilly, Public Policy Director of Northeast Energy Efficiency Partnerships of Lexington, Mass. said that the project will aid in the management of energy in New England.
“By accelerating investments in energy efficiency, RGGI has been a proven winner for businesses in the Northeast,” he said. “Strengthening RGGI will continue to provide those businesses with opportunities to better manage their energy use, which is critical in helping our region maintain its competitive advantage as we begin to emerge from recession.”
Still, the IER said that cap and trade practices will hurt the poor and job growth in local economies.
“According to the Congressional Budget Office, the costs of reducing carbon dioxide emissions would disproportionally harm the poor,” the group said. “A mere 15 percent decrease in carbon dioxide emissions would cost the lowest-income Americans 3.3 percent of their income, but only 1.7 percent of the income of higher income households.”
The group is also adamant about the effect on American jobs.
“A domestic cap and trade program will force more industries to leave America. Energy costs are a major expenditure for heavy industry,” said IER. “America’s natural gas prices are the highest in the world, even though we have the world’s sixth largest proven natural gas reserves. The high price of natural gas has significantly contributed to the loss of more than 3,000,000 manufacturing jobs since 2000.”
Chemical companies, especially, they say will struggle if the price of natural gas is driven up in substitute of coal.
“Higher natural gas prices will force them to pursue options offshore and overseas, reducing American jobs.”
Central Mass Power
According to records from the Environmental Protection Agency, Worcester’s local branch of Saint Gobain Abrasives operates a coal fired power plant on site which supplies about 40% of the facility’s power needs.
Central Mass also is home to petroleum power plants, as well as greener options like solar and biomass.
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