PA Coal Association opposes HB 80

Bill would drive up costs, harm economy and cost jobs

HARRISBURG, PA. – The Pennsylvania Coal Association (PCA) today outlined its opposition to Pennsylvania House Bill 80 (PN1000), contending the bill will unnecessarily drive up energy costs and negatively affect the state’s economic position.  The bill would amend the Commonwealth’s Alternative Energy Portfolio Standards (AEPS) Act of 2004

George Ellis, PCA President, outlined the association’s concerns in comments submitted to today’s Pennsylvania House Environmental Resources & Energy Committee meeting.

Ellis noted HB 80 would dramatically increase AEPS Tier I requirements, from sources such as wind and solar.  The current target of 8 percent of electricity distributed in 2021 would rise to a new target of 20 percent in 2026, including an increase from .5 percent to 3 percent in the portion required to be generated from solar photovoltaic (solar PV) technologies.

Ellis questioned whether current, lower Tier I targets set in 2004 can even be met, since less than 1 percent of all energy used by Pennsylvania homes, businesses and industries now comes from solar power, and the state ranks 22nd among the 50 states in wind power potential. 

Both the federal Energy Information Agency and Department of Energy project renewable-generated energy (including solar and wind) to be only 12.5 percent of the US generation sources by 2030, even with extensive government subsidies, Ellis said.  Among impediments to these renewables are system costs and the need to expand distribution or transmission networks.

With no assurances that Pennsylvania can meet existing renewable targets in a timely manner, to increase these targets by enacting HB80 would be a recipe for economic disaster, Ellis argued.  HB 80 targets are even higher than those currently being considered in Congressional legislation, which means that Pennsylvania would be at a serious competitive disadvantage if HB 80 were enacted.

Costs should be analyzed for displacing existing baseload coal-fired electric generation with mandated solar and wind generation, Ellis warned.  An existing coal-fired power plant can generate electricity at a cost of about $30 per megawatt hour compared to about $60 per MWH from wind and $327 per MWH for solar PV.

Such cost increases could be devastating to both manufacturing and homeowners, with the burden falling disproportionately on the financially disadvantaged, Ellis said.  Carving out a proportion of more expensive solar PV energy generation is something that other states have avoided for this reason.

Having reliable and affordable energy is required for Pennsylvania’s economic growth, Ellis contended.  Coal-generated electricity provides such power; wind and solar not only are more expensive but intermittent, requiring baseload power sources to back them up.

Ellis also suggested any action on such legislation must be deferred pending:

  • A Public Utility Commission study (required to be complete by 2010 to assess compliance with the current targets and to make recommendations to the General Assembly regarding additional targets) is a prerequisite to any further amendment to existing standards.
  • Analysis by the state’s Climate Change Advisory Commission, which under Pennsylvania Act 70 of 2008 is to issue its report to the Governor and General Assembly in October 2009.
HB 80 also would create a 3 percent set aside in Tier II of the AEPS for plants that use carbon capture and sequestration (CC&S) technologies.  Ellis suggested that the clean coal technology provisions can stand alone on their merits and should be introduced as a separate bill.

Development and deployment of CC&S technology will provide an option for building new coal-fired plants as the existing fleet is retired, Ellis said.  Such new technology would help the Commonwealth continue its reliance on coal, a source of electricity that is affordable, reliable and indigenous to the state.

PCA believes that efforts to encourage CC&S technology will help ensure continuation of reliable and affordable coal-based power.

Ellis offered the committee information about the coal industry in the Commonwealth:
  • 56 percent of Pennsylvania’s electricity is produced from coal.
  • Pennsylvania exports about 30 percent of the electric power it produces.
  • Pennsylvania is the fourth leading coal producing state, mining 68 million tons in 2008.  Almost 80 percent of this output came from 39 underground mines with the remainder from 377 surface mining and reprocessing sites.
  • The Pennsylvania mining industry constitutes a major source of employment and tax revenue, creating 49,100 direct and indirect jobs in 2008 with a total payroll exceeding $2.2 billion.  Taxes on these wages netted over $700 million to the coffers of federal, state and local governments.
  • 75 percent of Pennsylvania’s annual bituminous coal production goes to the electricity utility sector.