The following is testimony given by Lisa Crutchfield, Senior Vice President for Advocacy and Public Affairs for the Chamber of Commerce for Greater Philadelphia, to the Department of Environmental Protection on the EPA’s Clean Power Plan:
Commonwealth of Pennsylvania
Department of Environmental Protection
Comments Submitted for the EPA Clean Power Plan
September 30, 2015
Lisa Crutchfield, Senior Vice President
On behalf of
The Greater Philadelphia Chamber of Commerce
The Chamber of Commerce for Greater Philadelphia commends the Pennsylvania Department of Environmental Protection for soliciting public comment on how to implement the U.S. Environmental Protection Agency’s Clean Power Plan. Today, I am representing approximately four thousand businesses and over six hundred thousand employees in the eleven county region in southeastern Pennsylvania, southern New Jersey and northern Delaware. The members of the Chamber believe that the recent federal mandate to reduce carbon dioxide emissions from the electric industry by thirty three percent from 2012 levels by 2030 has broad reaching implications for the power sector but also on the business community and on the quality of life in the communities where we live.
First and foremost, members of the Chamber recognize the environmental and health benefits that inures to all from reducing carbon emissions across our state. The southeastern area of Pennsylvania has operated as a non-attainment area for many years, and both stationary and mobile sources have had to comply with federal and state environmental programs for some time. To date, the compliance costs to reduce carbon emissions from the power sector have not had a deleterious impact on retail rates, and we would encourage the Department of Environmental Protection to again consider the cost implications on businesses and residents as you develop the rules to comply with these new regulations under the Clean Power Plan.
One of the Chamber’s primary objectives is to promote regional economic growth and to support legislation and regulation that ensures our region remains cost competitive. When a new business is considering locating in southeastern Pennsylvania, the price of electricity is one of the top five determinants in the location decision. Businesses in the Commonwealth have benefited from declining electricity prices since the adoption of electric deregulation in 1996 and also with the increasing supply of natural gas to generate electricity. Now that state policy makers have to develop rules to further reduce carbon emissions, the Chamber encourages DEP to choose the most cost-effective approach to implementing the Clean Power Plan.
The Chamber recommends DEP adopt the “mass-based” approach to measure emissions targets. We believe mass-based programs are the most cost-effective method to translate the environmental goals into a market-based price and send the most efficient price signal for all generation sources in the regional power pool. What does the mass-based approach mean for Pennsylvania; it means that DEP would allocate allowances to the different power plants in the region.
EPA indicated that Pennsylvania generated 1,642 pounds of CO2 for each megawatt hour of electricity generated in the base year of 2012. Consequently, DEP would have to develop a compliance plan that would result in a thirty three percent reduction of 117 million tons of CO2 by 2030. DEP would allocate allowances to the power plants in the region based upon the emissions generated from their fuel sources, and the allowances would be included in the power plant’s market price providing a transparent and easily understood price signal to operate and achieve the carbon reduction goals.
Power plants in Pennsylvania currently operate in a regional power pool, PJM, and currently, this power pool provides for efficient and transparent electric prices. The Chamber encourages DEP to continue the use of the PJM power market and implement a mass-based approach to measure emissions targets which can easily be included in the generator’s power price and provide a transparent and cost-effective way to achieve emissions reduction targets.
One final note that is important to the southeastern region of the Commonwealth; sixty five percent of the electricity consumed in the Greater Philadelphia region is produced by nuclear power. The nuclear power units located in Montgomery County and in Salem County in New Jersey are our primary sources of baseload, reliable and low-carbon emitting power generation. These nuclear power plants employ hundreds of residents and contribute significant tax revenue to their communities. We cannot afford to have these plants close. The Chamber of Commerce for Greater Philadelphia strongly encourages DEP to include nuclear power as a part of the solution to reducing CO2 and as a means to comply with EPA’s Clean Power Plan. In the end, citizens and businesses rely on a continuous source of power, and recognizing the carbon-free nature of nuclear power in the state’s Clean Power Plan, results in a win-win for all.
Lisa Crutchfield is a former Vice Chairman of the Pennsylvania Public Utility Commission and a former executive at several national and international utilities. She currently serves as an energy policy leader at the Chamber of Commerce for Greater Philadelphia and CEO Council for Growth.
