Invenergy submitted applications to construct and operate the Allegheny Energy Center (a new 639 megawatt combined-cycle natural gas-fired power plant in Allegheny County, Pennsylvania) in 2021. Invenergy received a permit from the Allegheny County Health Department later that year. Subsequently, three environmental groups (the Clean Air Council, Citizens for Pennsylvania’s Future, and the Mountain Watershed Association) appealed the permit on the grounds that the plant’s social costs—those from changes in the emissions of carbon dioxide and local area pollutants—greatly exceeded the benefits.

Allegheny Energy Center asked NERA Consultant Andrew Busey to examine the appellants’ cost-benefit analysis for consistency with economic principles and relevant local regulatory requirements for such analyses. He found two serious problems with appellants’ analysis: (1) it used gross rather than net emissions and (2) it failed to comport to the relevant permitting requirements, which restrict such analyses only to those occurring within Pennsylvania. Mr. Busey showed that appellants’ analysis vastly overstated the potential in-state effects by using global damages for the costs of carbon dioxide emissions. Likewise, he found appellants’ analysis for the costs of local area pollutants aggregated estimates of monetized health effects for all counties in the continental United States.

The court agreed with Mr. Busey’s findings that the appellants’ analysis did not provide meaningful or appropriate estimates of the social costs and benefits of the Allegheny Energy Center.

The case was: Clean Air Council, Citizens for Pennsylvania’s Future, and Mountain Watershed Association v. Allegheny County Health Department and Allegheny Energy Center LLC, Case No. 21-043.