Reducing Carbon Pollution in D.C s Renewable Portfolio Standard Will Clean the Air without Impacting Ratepayers. Frequently Asked Questions

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1 Reducing Carbon Pollution in D.C s Renewable Portfolio Standard Will Clean the Air without Impacting Ratepayers Summary: Frequently Asked Questions While Mid-Atlantic States like Delaware and New Jersey get over 70% of their renewable energy portfolios from the wind and sun, these resources make up only 7% of D.C. s portfolio. The primary reason is a flaw in our renewable energy law that supports high-emission black liquor and wood waste facilities that have been in operation for over 32 years on average. Furthermore, none of these qualifying biomass facilities are located in D.C. D.C. lawmakers should pass legislation to remove old and polluting biomass facilities from D.C. s tier-1 renewable energy standard and ensure that only new high-efficiency biomass systems qualify in the future. This will ensure our renewable dollars go to work for new clean energy resources with virtually no impact on energy bills. 1) What is black liquor? And what is wood waste? Black liquor is an industrial by-product of the pulp and paper industry. Since the 1930s, paper mills have burned black liquor to supply electricity for milling purposes and sell excess electricity onto the grid. Wood waste includes - but is not limited to - mill residues, brush, yard waste, pallets, and left overs from saw timber forestry. All of the wood waste that currently qualifies for the RPS is burned at facilities that were built before the RPS law was enacted, and almost all of currently-registered wood waste is also burned at paper mills. 2) What would be the effect on ratepayers of restricting the eligibility of black liquor and wood waste in D.C. s RPS? Our analysis projects that there will be virtually no impact on ratepayers by restricting black liquor and wood waste, beyond the effect that the RPS would already have on ratepayers in Ratepayer impacts from the RPS are felt through the price and quantity of Renewable Energy Credits (RECs) purchased by electricity suppliers. Because the future price of all RECs will be set by new renewable generation regardless of whether black liquor and wood waste qualify for D.C. s RPS, their removal from tier-i eligibility will have almost no ratepayer impact. Essentially, ratepayers will still pay to support renewable energy, but this will likely support new wind generation as opposed to old high-emitting wood waste and black liquor facilities. 3) Currently all of these biomass facilities are outside of D.C., but are ratepayers subsidizing their polluting power? Clean Up the RPS FAQ - 1

2 D.C. ratepayers currently pay a premium for black liquor and wood waste facilities located throughout our entire electric grid region, in Pennsylvania, Ohio, Maryland and Virginia. Worse, many more old black liquor and wood waste facilities are connected to our electric grid and are eligible to register for D.C. s RPS, but have not yet done so. None of these companies are based in D.C., but when they do register for our RPS, more ratepayer dollars will go towards subsidizing their old polluting energy. 4) What are the climate and health impacts of black liquor and wood waste? According to the US EPA, the CO 2 content of black liquor and wood waste combustion is on par with coal, and higher than both natural gas and petroleum. Furthermore, black liquor and wood waste combustion releases methane, nitrous oxides, particulate matter, volatile organic compounds, carbon monoxide, arsenic, and lead at levels greater than or equal to fossil fuels. Furthermore, because all black liquor and wood waste facilities that qualify for the RPS were built decades ago, they do not contribute to reducing CO 2 or any other pollutants from fossil fuels below current levels. The only way to reduce pollution below current levels is to build new clean energy facilities to displace high-emitting fossil fuel generation. 5) What will be the climate impact of limiting black liquor and wood waste? How will this affect the state s progress toward satisfying its Greenhouse Gas Reduction Act mandate? By restricting black liquor and wood waste, we will create more demand for new clean energy. Bringing on more clean energy including, but not limited to, wind power will mean displacing fossil fuel energy with exceptional benefits. The D.C. RPS is currently on track to reduce.1 million metric tons of greenhouse gas emissions in 2020 if no action is taken. If we restrict black liquor and wood waste, D.C. s RPS will reduce 1.1 million metric tons of greenhouse gas emissions. Removing black liquor and wood waste would reduce about 1.0 Million Metric tons of greenhouse gas emissions. 6) What kinds of biomass energy plants would still qualify for tier-1? The goal of this bill is not to eliminate all biomass from the RPS, but rather to remove only the old and polluting energy while encouraging new and efficient biomass systems. Although some paper mills currently achieve total system efficiency levels of 65 percent or greater, which is good, it is important to remember that all of those mills reached those efficiency levels before the 2005 RPS law went into effect. They reached those efficiencies without ratepayer subsidies, and they do not, therefore, need subsidies now to continue that behavior. RPS funds do not compel old paper mills to do anything different from what they would already be doing without the RPS. If RPS ratepayer dollars go towards biomass, it would be much better if that money is spent on new efficient units that can create new jobs and reduce fossil fuel emissions below current levels. 7) What percentage of D.C. s RPS was fulfilled with black liquor and wood waste in 2011? Clean Up the RPS FAQ - 2

3 In 2011, an astonishing 62% of Maryland s RPS was fulfilled with black liquor and wood waste. Only 7% came from wind and solar D.C. RPS: 6% 31% 0% Solar PV 1% Wood Waste 20% Black Liquor 42% 8) What percentage of D.C. s RPS will likely be fulfilled with black liquor and wood waste in 2020 if no action is taken? With no action, black liquor and wood waste are likely to fulfill a remarkable 40% of the RPS in D.C. RPS if Black Liquor and Wood Waste Remain: 1% Solar PV 7% 22% Wood Waste 15% 30% Black Liquor 25% 9) What percentage of D.C. s renewable energy portfolio will likely be fulfilled with black liquor and wood waste in 2020 if those sources are restricted? Clean Up the RPS FAQ - 3

4 In this scenario, black liquor and wood waste will make 0% of D.C. s renewable portfolio in energy will jump to 70.6%. Note, however, that if new efficient biomass systems come online and register for D.C. RPS, that could displace some of this projected wind generation D.C. RPS Excluding Black Liquor and Wood Waste: 0.9% Solar PV 6.4% 22.1% 70.6% 10) Without black liquor and wood waste, will there be enough available renewable generation in PJM to meet the RPS? According to the Power Plant Research Project s 2011 Inventory of Renewable Energy Generators Eligible for the Maryland Renewable Energy Portfolio Standard, with the sustained Tier 1 growth seen in the past five years, Maryland electricity suppliers will continue to find sufficient resources to meet the Tier 1 RPS requirements. Because Maryland and D.C. are both on the regional PJM electric grid, the same conclusion holds true for D.C. electricity suppliers. The table below shows the record-setting pace at which renewable energy in PJM has grown over the last decade, fueled mostly by land-based wind power, with some solar and landfill gas growth as well. Assuming that this trend continues there will be enough clean energy growth in PJM to satisfy D.C. RPS requirements without black liquor and wood waste. Clean Up the RPS FAQ - 4

5 Tier-1 Renewable Resource Development in PJM through time For more information please contact James McGarry, Policy Analyst, CCAN at or Clean Up the RPS FAQ - 5