|Action||Reduce and Cap Carbon Dioxide from Fossil Fuel Fired Electric Power Generating Facilities (Rev. C17)|
|Comment Period||Ends 3/6/2019|
Strongly Oppose Regulation for Emissions Trading Programs
Re: Reduce and Cap Carbon Dioxide from Fossil Fuel Fired Electric Power Generating Facilities (Rev. C17)
9VAC5-140. Regulation for Emissions Trading Programs
The re-proposal of the RGGI scheme extends the emissions cap 10 more years to 2040 and lowers the initial cap from 34 million metric tons carbon dioxide in 2020 to 28 million metric tons without any justification. Nor does the proposal or underlying analysis identify how much global temperature reductions would result from implementation.
The proposal will negatively impact Virginia electricity consumers for no measurable gain in affecting temperatures. For DEQ to state electricity prices to go down with implementation of proposal is not a believable scenario and makes no common sense at all.
The DEQ should drop the re-proposal for the following reasons.
1) The 2019 General Assembly has taken contrary positions
c) All of the bills that proposed a moratorium on fossil fuels were defeated, including
2) DEQ’s analysis is incomplete, biased and fatally flawed
The SCC staff has critiqued the DEQ analysis, including
a) RGGI has not published any prices beyond 2030 even though the re-proposal requires reductions through 2040
b) Virginia is a NET purchaser of electricity from the PJM grid and the RGGI scheme will increase our dependence on the PJM grid. Net purchases from the PJM in 2020 are projected to be 7M megawatt hours (8.2%) growing to 19.7M megawatt hours (21.4%) in 2040. PJM will require additional generation not less. Generation will leave Virginia as it has in RGGI states, along with high paying jobs, local and state revenue, and businesses leave or not come due to higher electricity costs.
c) DEQ’s analysis only included the first 10 years of RGGI
d) DEQ claim that consumer bills will fall is incorrect
e) DEQ modeled Virginia as a deregulated market which it is not. Only Vermont in RGGI is similar to Virginia.
f) DEQ does not capture the costs of premature plant retirements ($780 million) or the cost of replacement capacity ($1.3 billion plus financing costs and profit margin). Virginia customers will pay twice as much.
g) DEQ used models and assumptions not suited for analysis of the proposed regulation
The PLEXOS model is an integrated energy model that simulates the power market and is used by the SCC. This is the model that should have been used by DEQ.
The DEQ model omitted the customer bill impact of increased fuel costs, prematurely retiring generating units and the additional costs to operate fossil fuel units that continue to operate
DEQ used a discount rate 3x lower than the standard used by the SCC (weighted average cost of capital) which results in understating the true costs of future capital investments
h) The RGGI penalties will lead to higher PJM energy prices imposing costs across the entire PJM grid
Other states in the PJM may have a cause of action against Virginia to demand compensation for these arbitrarily imposed costs
3) The proposal does not address the intersection of current or future changes in Virginia generation law, the SCC intersections, nor ongoing plans and requirements of generators.
Charles D. Poindexter