Discussion of the Cross-State Air Pollution Rule
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Discussion of The Cross-State Air Pollution Rule September 13, 2011 Today’s Discussion . Luminant Overview . Texas Power Sector Emissions Context . Profile of the Cross-State Air Pollution Rule and Requirements for Texas 1 Luminant Generation And Mining Facilities Generation capacity in ERCOT At 12/31/10; MW Nuclear 2,300 MW Natural gas1 5,110 Coal 8,017 Total 15,427 MW FORT DALLAS TYLER WORTH MIDLAND ODESSA WACO Lignite mine production LUFKIN 2010; million tons AUSTIN Monticello 2.5 M tons HOUSTON Big Brown 2.6 SAN ANTONIO Three Oaks 5.4 Kosse 6.2 Martin Lake 10.8 Plants and mines Natural gas plants Total 27.5 M tons Coal plants Nuclear plants Lignite mines Luminant is the largest generator in Texas and a wholly owned subsidiary of Energy Future Holdings 1 Includes four mothballed units (1,655 MW) not currently available for dispatch and eight units (1,268 MW) currently operated for unaffiliated parties. 2 Luminant Coal/Lignite Plant And Mine Employees Plant/Mine Site FTEs1 Big Brown Plant 119 Big Brown Mine 213 Martin Lake Plant 254 Martin Lake Mine 683 Monticello Plant 192 Monticello Mine 281 Sandow Plant 135 Three Oaks Mine 255 Oak Grove Plant 141 Kosse Mine 306 Total coal/lignite plant employees 841 Total mine employees 1,738 Luminant – total coal/lignite and mine employees 2,579 1 As of April 30, 2011 3 Today’s Discussion . Luminant Overview . Texas Power Sector Emissions Context . Profile of the Cross-State Air Pollution Rule and Requirements for Texas 4 Texas Power Sector SO2 And NOx Emissions Since 1995 Texas SO2 emissions Texas NOx emissions 1995-2010; Thousand tons 1995-2010; Thousand tons 621 26% 462 376 62% 146 1995 2010 1995 2010 Source: EPA’s Clean Air Markets Division (Data and Maps) Acid Rain Program Affected Units Only, EIA 5 Texas’ Power Sector Emissions Rates Compared With US Averages SO2 emissions NOx emissions 2010; lbs/MMBtu 2010; lbs/MMBtu 0.40 24% 0.30 0.164 42% 0.095 Rest of US Texas Rest of US Texas Source: EPA’s Clean Air Markets Division (Data and Maps) Acid Rain Program Affected Units Only 6 Regional NOx Emissions NOx Emission Rate 2010; lbs/MMBtu 0.237 2010 NOx Emission Rate 0.347 OK 0.192 Area Averages (lbs/MMBtu) NM AR National* 0.164 Texas 0.095 0.137 0.095 LA TX EPA Clean Air Markets Division – 2010 Acid Rain Program Data *National average does not include Texas data 7 Luminant SO2 And NOx Emissions Since 1995 Luminant SO2 Emissions Luminant NOx emissions 1995-2010; Thousand tons 1995-2010; Thousand tons 273 21% 216 130 68% 41 1995 2010 1995 2010 Luminant has also reduced total SO2 emissions by 21% and NOx emissions by 9% since 2005 while increasing generation by 16% 8 Today’s Discussion . Luminant Overview . Texas Power Sector Emissions Context . Profile of the Cross-State Air Pollution Rule and Requirements for Texas 9 States Covered By CSAPR WA Cross-State Air VT ME Pollution Rule MT ND includes separate OR MN NH MA requirements for: ID SD WI NY MI WY RI . Annual SO2 PA CT NE IA NJ reductions NV OH UT IL IN DE . Annual NO CO WV MD X CA VA reductions KS MO KY DC NC TN . Ozone-season AZ OK NM AR SC NOX reductions MS AL GA TX LA FL States controlled for both fine particles (annual SO2 and NOX) and ozone (ozone season NOX) (21 states) States controlled for both fine particles only (annual SO2 and NOX) (2 states) States controlled for ozone only (ozone season NOX) (5 states) States not controlled by the Cross-State Air Pollution Rule *This map includes states covered in the supplemental notice of proposed rulemaking. Source: U.S. Environmental Protection Agency 10 Requirements Faced By Texas Proposed CATR, 7/2010 CSAPR 2012 Remedy Case, 7/2011 Annual SO2 Program Annual SO2 461,622 . No requirements or budget 47% . Texas at 327,000 tons – no significant 243,954 downwind impact 2010 Actual Emissions1 2012+ Budget 2 Annual NO Annual NOx X . No requirements or budget 8% . Texas at 160,000 tons – no significant 145,878 133,595 downwind impact 2 1 2010 Actual Emissions 2012+ Budget Seasonal NOx Seasonal NOX 75,574 10% 68,450 8% 68,450 63,043 2010 Actual Proposed Budget 1 2 Emissions 2010 Actual Emissions 2012+ Budget 1 CEMS – Actual EMIT 2 CSAPR – Limits (State Budgets); does not include possible set-asides 11 Share Of Total US SO2 Emissions Reductions In 2012-13 SO2 Reductions – all Group 1 and Group 2 states Share of 2012-13 Reductions Compared 000’s tons1,2,3 With 2010 Emissions 4,250 864 20% 3,386 100% = ~864,000 ton reduction 2010 SO2 Total 2012-13 SO2 Emissions Reduction Budget from 25% Texas Final CSAPR 1,2,3 SO2 Reductions – Texas 000’s tons 462 75% 47% Rest of 218 U.S. 244 2010 SO2 Total 2012 Limits Emissions Reduction 1 State SO2 Budgets for 2012-2013 from Prepublication CSAPR version July 6, 2011, pp 1095 & 1233 2 State SO2 2010 Emissions – EPA Clean Air Markets Division, Data and Maps, Acid Rain Program Data 3 Page 1233 Prepublication CSAPR version July 6, 2011 12 State-By-State Contributions And Mandated Reductions SO2 Group 1 & 2 State Contributions To Down- Required 2012 SO2 Reductions for 3 1 3 wind Nonattainment For Annual PM2.5 (µg/m ) Group 1 & 2 States 1.5 -300 2 This is a 47% reduction from (µg/m3) NAAQS for PM on an annual basis is 15 2.5 2010 levels for Texas 2.5 micrograms per cubic meter of sampled air. The EPA set the Significant Contribution Threshold at 1% of the NAAQs or 0.15 µg/m3 -200 (1,000 tons) (1,000 1.0 2 -100 0.5 SO forReductions 2012 0 0.15 µg/m3 100 Downwind contribution to nonattainment for annual PM PM forannual nonattainment to Downwind contribution 0.0 1 Source: Table V.D-1, page 148 of 1,323, Final CSAPR 2 NAAQS refers to the National Ambient Air Quality Standard 3 Source: Reductions are the differences between 2012 state budgets from CSAPR prepublication version preamble, pages 234 and 235, and the actual 2010 emissions from EPA’s Clean Air Markets Division, Data & Maps, Quick Reports 13 Concerns Expressed By Texas Leaders 33 of 34 Texas Congressional Delegation members have expressed concerns “If fact, EPA has never included a state in a final rule for one of its major interstate transport programs without first providing a budget for that state in the proposed rule. As a consequence, EPA provided Texas and Texas market participants with absolutely no notice that EPA was developing a budget for Texas, much less notice of its terms ... affected parties in Texas had no basis or ability to comment on the Texas budgets…” Texas Members of U.S. House of Representatives, Letter to OMB, 8/1/11 “The implementation timeline provides ERCOT an extremely truncated period in which to assess the reliability impacts of the rule, and no realistic opportunity to take steps that could even partially mitigate the substantial losses of available operating capacity described in the scenarios examined in this report. In short, the CSAPR implementation date does not provide ERCOT and its resource owners a meaningful window for taking steps to avoid the loss of thousands of megawatts of capacity, and the attendant risks of outages for Texas power users.“ ERCOT, Impacts of CSAPR on the ERCOT System, 9/1/11 “This is expected to have far-reaching consequences on energy consumers, particularly elderly and low- income populations whose health and welfare are dependent on reliable energy … Additionally, these regulations have indirect effects of higher costs associated with the cost of manufacturing goods and the potential for lost jobs as the American economy struggles to recover and compete in the global market.” TCEQ and PUC, Joint Statement, 7/7/11 14 Leaders and Organizations that Have Expressed Concern about CSAPR’s Requirements for Texas (partial listing) National Leaders and Organizations State-level Leaders and Organizations Local Leaders and Organizations • U.S. Sen. Kay Bailey Hutchison (R) • Gov. Rick Perry • Cedar Hill Mayor Rob Franke • U.S. Sen. John Cornyn (R) • State Sen. Troy Fraser (R) • DeSoto Mayor Carl Sherman • Cong. Joe Barton (R) • State Sen. Eddie Lucio, Jr. (D) • Duncanville Mayor David Green • Cong. Eddie Bernice Johnson (D) • State Sen. Robert Nichols (R) • Fairfield Mayor Roy Hill • Cong. Kevin Brady (R) • State Rep. Byron Cook (R) • Irving Mayor Beth Van Duyne • Cong. Michael Burgess (R) • State Rep. Jessica Farrar (D) • Lancaster Mayor Marcus Knight • Cong. Francisco Canseco (R) • State Rep. Phil King (R) • Midlothian Mayor Boyce Whatley • Cong. John Carter (R) • State Rep. Trey Martinez Fischer (D) • Fairfield Hospital District Board President George • Cong. Michael Conaway (R) • State Rep. Wayne Smith (R) Robinson • Cong. Henry Cuellar (D) • Public Utility Commission of Texas (PUCT) • Fairfield Industrial Development Foundation • Cong. John Culberson (R) • Electric Reliability Council of Texas President David Zuber • Cong. Blake Farenthold (R) (ERCOT) • Mount Pleasant Industrial Foundation Executive • Cong. Bill Flores (R) • Railroad Commission of Texas (RCT) Director Charles Smith • Cong. Louie Gohmert (R) • Texas Commission on Environmental • Mount Pleasant ISD Superintendent Lynn Dehart • Cong. Charlie Gonzalez (D) Quality (TCEQ) • Northeast Texas Community College (Titus • Cong. Kay Granger (R) • IBEW – 7th District County) President Dr. Brad Johnson • Cong. Al Green (D) • Texas AFL-CIO • North Texas Commission • Cong. Gene Green (D) • Texas Association of Business • Dallas Regional Chamber of Commerce • Cong. Ralph Hall (R) • Texas Association of Manufacturers • Dallas Black Chamber of Commerce • Cong.