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PA jobs fall, electricity rates spike under Clean Power Plan

By: Jana Benscoter |

The development and implementation of mandated Clean Power Plan regulations could suffocate the breath of fresh air brought by utilization of Pennsylvania’s natural resources.

The U.S. Environmental Protection Agency regulations, anticipated to be released in June 2015, would require states to reduce carbon emissions by 32 percent over 2012 levels by 2030. In Pennsylvania, that would mean a substantial loss of manufacturing jobs, and increased electricity rates.

The Pennsylvania Coal Alliance, which submitted over 1.6 million opposition comments to the proposed Clean Power Plan, wrote on its website:

Reducing emissions is an achievable goal and the coal industry and its utility customers have been actively developing advancements and achieving generation efficiencies and pollution reductions. However, the proposed reduction and timeframe for compliance is unachievable given the absence of currently available commercial technology and is essentially a ban on the industry.

John Pippy, CEO of the coal alliance, recently wrote in an opinion piece that Pennsylvania is fortunate to have “an abundance of this domestic energy source.” He wrote that coal has contributed $1.94 billion annually to communities, such as Greene and Washington counties, as well as adding $4.5 billion annually to state coffers.

“Without these over-reaching regulations, Pennsylvania is positioned to maintain a diverse supply of electricity, of which almost 95 percent comes from Pennsylvania coal, natural gas and nuclear, keeping rates low and making the state an attractive place for business and manufacturing,” Pippy wrote. “While there is a place for renewables, they cannot replace the baseload electricity that coal provides. Wind and solar make up less than 2 percent of Pennsylvania’s electricity generation and the infrastructure is not in place for alternative sources to pick up the slack.”

The alliance points to a recent study conducted by NERA Consulting, a global firm of experts dedicated to applying economic, finance and quantitative principles to complex business and legal challenges:

A recent study conducted by NERA Consulting showed that if the CPP is enacted as proposed, Pennsylvania electric rates would increase by up to 31 percent. Roughly 2.4 million low-income and middle-income families in Pennsylvania spend almost 20 percent of their after-tax income on energy. The cost of energy directly affects the spending habits of these families on additional goods and services in the community affecting the local economies.

The two Pennsylvania counties that the alliance uses as examples – Greene and Washington – provide far-reaching positive effects in job creation and quality of life standards. Not only does the coal industry supply jobs, but the coal production provides 40 percent of the commonwealth’s electricity, keeping rates low for residents and businesses statewide:

Approximately 7,350 full and part-time jobs in Greene and Washington counties are provided by the longwall mining industry, making it the third largest employer. For each of those direct jobs, an additional 1.1 jobs are added indirectly in the counties. Those indirect jobs support entire industries like the Mining Products Division of Enersys in Washington, PA, which manufactures and supplies batteries used in the mining process. The impact of the longwall mining (a very specific type of underground mining) industry extends well beyond Washington and Greene Counties.

In 2012, manufacturing employed 574,000 Pennsylvanians, accounting for 10 percent of the total workforce with average salaries 44 percent higher than nonmanufacturing sectors. Without this industry, Pennsylvania’s economy would be decimated. And without a supply of low-cost, baseload electricity, Pennsylvania would lose manufacturing.

Action toward complying with the Clean Power Plan’s language expected in June is already in motion.

Pennsylvania Gov. Tom Wolf was selected by the National Governors Association as one of four states chosen to participate in their “Policy Academy on Helping States Prepare for Federal Greenhouse Gas Rules in the Electric Power Sector.” Governors in Michigan, Missouri and Utah were also picked.

According to the NGA:

The goal of this effort is to help states examine cost-effective strategies for meeting the potential requirements of forthcoming federal regulations to reduce greenhouse gas emissions from power plants. Each participating state will receive tailored modeling of their electricity sector to assess potential compliance options, access to leading researchers in this area and technical assistance from NGA. By the end of the policy academy, each state will develop a strategy to inform state compliance planning. Although there is uncertainty about the final provisions of the rule, the effort will help states identify various options and assess their potential implications.

Wolf told the NGA, “This is a great opportunity to help Pennsylvania write a Clean Power Plan that will work for Pennsylvania and improve our economy and environment.”

State compliance plans are expected to be due one year after the EPA issues its final rule, with possible extensions. The opportunity, while a chance to include all interested stakeholders, could bring with it more government.

Wolf’s team would be involved in:

  • modeling potential compliance scenarios for the electricity sector
  • fostering enhanced coordination among state agencies
  • engaging in stakeholder dialogues
  • exchanging insights and examples with peers from other states

An addition to Wolf’s energy team is David Sweet, a Pittsburgh native. As Wolf’s energy adviser, he will act as a deputy secretary at the Department of Community and Economic Development.

According to StateImpact, Sweet, who is tasked with energy and manufacturing job creation and environmental solutions, says, “Wolf did not choose him for his energy expertise, but rather, his political savvy.”