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Recent Projects

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  • Public Comments

    Comments to FERC on Seasonal Capacity Markets and Electricity Demand

    July 12, 2018

    PJM Interconnection (PJM), the electric grid and wholesale market operator in 13 states and Washington D.C., currently has a market design that leads to over-procurement of electric generating capacity, particularly from generation resources that are able to provide capacity throughout the year. This inefficient market design raises capacity costs and suppresses the participation of resources, such as wind, solar, and natural gas, whose generating capacity varies by season. The Federal Energy Regulatory Commission (FERC) recently held a technical conference to seek feedback on how PJM can redesign its capacity market to better facilitate participation of these seasonal resources. Our comments to FERC argue that replacing or supplementing the current annual-only capacity product with seasonal capacity products would improve the efficiency of the PJM capacity market. In addition, we suggest changes in the capacity market participation rules for wind, solar, and other intermittent resources.

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  • Public Comments

    Environmental Value of Distributed Energy Resources for New York State - Subgroup Report

    July 9, 2018

    New York State is seeking to refine its method for compensating distributed energy resources (DERs) based on the value that they provide, including their potential to reduce local air pollution and greenhouse gas emissions. Together with a group of government agencies, non-governmental community and environmental organizations, academic centers, and clean energy businesses, we submitted a report that describes the work of an informal, stakeholder-led Environmental / Environmental Justice Value Subgroup, which was formed to identify methods for calculating the environmental and public health value of avoided air pollution caused by DER injections in New York State. As part of that filing, we also submitted our report, Valuing Pollution Reductions, which serves as a general guide for state regulators interested in calculating the environmental and public health value of avoided air pollution caused by DER injections.

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  • Public Comments

    Comments to New York on Electricity Rate Design

    May 29, 2018

    New York State is in the process of reforming its payment system for distributed energy resources (DERs), such as rooftop solar panels, away from a net energy metering policy that compensated these resources at retail electricity rates. Our comments to the New York Public Service Commission encourage the state to move towards rate designs that better reflect the underlying costs of generating, transmitting, and distributing electricity, including environmental externalities for all customers, including those who do not own DERs. Our joint comments with other stakeholders also offer high-level principles for rate design that can help achieve the state’s clean energy goals.

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  • Public Comments

    Comments to FERC on Electric Grid Resilience Order

    May 9, 2018

    The Federal Energy Regulatory Commission (FERC) requested feedback from regional electricity regulators on the state of resilience in wholesale markets, efforts underway to ensure grid resilience, and opportunities for future improvement. Their responses make clear that while grid resilience is an issue worthy of continued attention, there is not currently evidence to support mandatory, national or even regional action to address acute resilience concerns. Our comments to FERC argue that it should not seek a “one-size-fits-all” solution for all Regional Transmission Organizations and Independent System Operators (RTOs/ISOs), nor should it consider resilience a “catch-all” concept that opens the door to otherwise unsupported or unnecessary actions.

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  • Public Comments

    Comments to FERC on PJM Capacity Market Repricing Proposal

    May 7, 2018

    PJM Interconnection, L.L.C (PJM), a regional electricity transmission organization serving 13 states and Washington D.C., recently submitted a proposal to the federal government requesting changes that would “mitigate” the impact of state climate and energy policies on electricity markets. In our comments to the Federal Energy Regulation Commission (FERC), we argue that PJM’s proposals rest on a faulty premise that state public policies are distorting the economic efficiency of capacity market price signals, which heavily affect how generators enter and exit the market.

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  • Reports

    Capacity Markets and Externalities

    April 30, 2018

    Many states are taking action on climate change by paying zero- and low-emitting electricity generators for avoiding the emissions that fossil-fuel-fired resources would otherwise emit. These “externality payments” help level the playing field between emitting and non-emitting generators. Critics of these policies argue that these payments might negatively affect the efficiency of wholesale electricity markets by reducing capacity prices, which heavily affect how generators enter and exit the market.

    Our report shows why the premises underlying recent reforms, which seek to shield capacity markets from the potential price impact of pollution externality payments, are flawed. The report argues that redesigning capacity markets in reaction to these state policies shows concern for only private generation costs and disregards the fact that externality payments help correct market failures associated with air pollution, improving economic efficiency.

    Rushed market design changes based on the unsupported assumption that state policies negatively affect capacity markets may actually harm the functioning of the markets, while potentially undoing states’ efforts to combat pollution and climate change.

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  • Reports

    Managing the Future of Energy Storage

    April 24, 2018

    Many policymakers assume that increasing deployment of energy storage will automatically reduce greenhouse gas emissions, in part by helping to integrate renewable energy resources with intermittent and variable generation. This report explores situations in which energy storage systems can in fact lead to increased emissions, and offers reforms to correct for poor incentives while ensuring that energy storage can provide the maximum benefit possible to the grid.

    Policy reforms that account for the range of benefits provided by storage, including reduced air pollution, are required at both state and federal levels. This report recommends that policymakers (1) focus on accurately pricing externalities caused by greenhouse gases; (2) eliminate entry barriers for energy storage systems; (3) and eliminate barriers that energy storage systems face to receiving multiple value streams for the various services they provide. The report outlines steps to realize each of these three goals and provides an overview of state and federal actions currently under way.

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  • Public Comments

    Comments on California’s Distributed Energy Resources Policy

    April 13, 2018

    The California Public Utilities Commission (CPUC) is developing a comprehensive policy for integrating Distributed Energy Resource (DERs), like rooftop solar, into its energy system. A March 2018 administrative law judge ruling heavily cited our earlier comments in laying out a revised plan to require the state’s utilities to conduct a societal cost test to help compare the net benefits of different DER technologies. We submitted comments to the CPUC commending the agency for its revisions to the proposed analysis and recommending additional improvements.

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  • Court Filings

    Amicus Brief on New York’s Zero Emissions Credits and the Social Cost of Carbon

    March 28, 2018

    In 2016, the New York Public Service Commission adopted the Clean Energy Standard, an ambitious plan to increase renewable generation to 50% of the market by 2030. While working toward that goal, the State found it was necessary to pay nuclear generators through a zero-emissions credits (ZECs) system, as compensation for the value they provide in avoiding emissions. The State found that this would help guard against an increase in pollution if the nuclear generators were to close. Our amicus brief to the Supreme Court of New York in Albany County argues that the Commission’s decision to base ZEC prices on the Social Cost of Carbon (SCC) was reasonable.

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  • Reports

    Valuing Pollution Reductions

    March 23, 2018

    Distributed energy resources (DERs)—grid-connected, small-scale electric generators such as rooftop solar installations, micro-turbines, combined heat and power systems, customer backup generators, and distributed energy storage systems—are a growing part of the U.S. electric system. They can help avoid the high levels of greenhouse gases and local air pollution produced by traditional energy sources. As their use grows, state electric utility regulators are seeking to compensate DERs accurately for the benefits they offer, including reductions in pollution that contributes to climate change and harms human health.

    This report shows how regulators can calculate the types and amount of pollution avoided, and then monetize these benefits for use in policy. This flexible blueprint allows states to consider tradeoffs between accuracy and ease of administration, pick the tools that are most accurate given the tradeoffs, and update their methods when feasible. This methodology would allow utility regulators to implement technology-neutral policies that incentivize DERs when and where they are most beneficial to society.

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