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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: May 20, 2013 01:39 PM
From: Senator Mike Folmer
To: All Senate members
Subject: Waste-to-Energy Legislation
I plan to reintroduce legislation to amend the Commonwealth’s Alternative Energy Portfolio Standard (AEPS) to move Waste-to-Energy (WTE) from Tier II into Tier I.

This measure was previously Senate Bill 1568 from last session sponsored by D. White, Erickson, Greenleaf, Yudichak, Smucker, Schwank, Waugh, Piccola, and Mensch.

The AEPS statute that passed in 2004 placed only existing Waste-to-Energy (WTE) facilities in Tier II, while both new and existing landfill gas systems, among other technologies, were preferentially placed in Tier I. This disparity disadvantages the renewable energy produced by Pennsylvania’s WTE facilities, which is generated from the municipal solid waste (MSW) that they receive.

When these facilities were built decades ago, they entered into long-term power purchase agreements (PPAs) with their local utilities, when wholesale electricity prices were higher than they are today. These contracts will begin expiring within the next few years.

The flood of natural gas entering the energy markets today has depressed wholesale electricity prices to very low levels. These depressed prices will negatively impact the local municipal solid waste authorities and the taxpayers that invested in them. This means the WTE solid waste municipal infrastructures will struggle to remain competitive.

Moving WTE from Tier II to Tier I would help these municipalities offset some of the anticipated losses from the upcoming expiration of their current power purchase contracts, as well as put WTE on par with landfill gas. This makes moving WTE to Tier I more critical than ever.

WTE facilities generate clean, baseload renewable electricity by using municipal solid waste after recycling as the fuel source. WTE meets two basic criteria for renewable energy: the source (trash) is both sustainable and indigenous.

When compared to landfill gas, the average existing WTE facility generates nine times more power per ton of waste while the newest facilities can generate as much as 14 times more power using the same fuel.

There are currently six WTE facilities across Pennsylvania (York, Lancaster, Montgomery, Delaware, Harrisburg and Bucks) with a combined capacity of 268.5 MW.

These facilities employ more than 350 Pennsylvanians with a payroll of about $35 Million. WTE facilities provide more in-state, high paying jobs than some of the other technologies currently in Tier I, including landfills.

The average price per renewable energy credit (REC) differs substantially from tier to tier in PA: (Marex Spectron)

2013 Renewable Energy Credit Pricing
Credit Type Weighted Average Price
Solar PV $14.00
Tier I $3.85
Tier II $.02

The current market price of Tier II credits is so low that the administrative costs of participating in the renewable energy market outweigh the benefit.

I believe this legislation will level the playing field between WTE and landfill gas, while not impacting electric rate payers.

Introduced as SB1015