Project Updates

  • Tuesday
    October 7th,
    2014

    Public Comments on Net Metering in Wisconsin

    Wisconsin is one of more than 40 states with a “net metering” law that allows solar-powered households to sell some of the electricity they generate back into the grid for a fixed price. The Wisconsin Electric Power Company and Wisconsin Gas LLC recently proposed changes to their net metering rates, arguing in part that the rates force them to fund additional grid maintenance and modernization without appropriate compensation. However, the current rates also do not account for the climate and public health benefits from distributed solar generation.

    Policy Integrity submitted comments to the Public Service Commission of Wisconsin, arguing that both the positive and negative externalities of distributed solar generation should be considered when determining net metering rates. Specifically, we suggest that the Commission should:

    • Adjust the proposed net metering rate to include the health and environmental benefits
      associated with the avoided greenhouse gas (GHG) emissions and emissions of local
      pollutants;
    • Adjust the proposed net metering rate to include the value of the net impact of distributed
      solar generation on the local grid; and
    • Consider regulatory reforms to better achieve Wisconsin’s energy goals.

    The full comments are available here.

    Issue(s): Energy and Environment   Type: Public Comments

  • Friday
    September 26th,
    2014

    Oil Train Safety - Public Comments

    Driven by growth in the production of oil in the U.S. and Canada, there has been a significant increase in rail transportation of crude oil over the past five years, with a corresponding increase in the number of accidents. Many oil trains pass through sensitive environmental habitats and densely populated areas, and even share track with commuter trains in some regions.

    In 2013, more oil spilled from U.S. trains than in the previous four decades combined. These crude-by-rail accidents have resulted in serious damage to the environment as well as fatalities; 47 people died in the Lac-Mégantic, Quebec accident.

    Policy Integrity recently submitted public comments on proposed enhanced tank car standards and operational controls for “High-Hazard Flammable Trains” to the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.

    In the interest of better protecting public safety and maximizing net benefits from the proposed rule, we suggest that the agency:

    • Explain the rationale for its selected timeline and alternatives, and consider additional options that would increase safety, such as phasing-out DOT-111 cars on an accelerated timeline;
    • Improve its calculation of costs and benefits by using the best available data, and fully account for co-benefits and countervailing risks;
    • Provide more detailed guidance on how to perform train routing analysis to maximize net benefits;
    • Collaborate with states to increase compliance with federal regulations; and
    • Collect more accurate data on accident causes, and continuously improve safety standards.

    Issue(s): Energy and Environment   Type: Public Comments

  • Friday
    September 12th,
    2014

    Livermore Argues Offshore Leasing Case in DC Circuit Court

    The government’s offshore leasing system fails to account for uncertainties about environmental harms—the system ignores “option value,” a well-established economic technique that quantifies the value of delaying decisions to acquire crucial information. As a result, the current leasing system leads to over-exploitation of natural resources and excessive environmental risk.

    A current lawsuit is challenging the use of this flawed economic analysis in the Bureau of Ocean Energy Management’s (BOEM’s) 2012-2017 leasing plan for the Gulf of Mexico and the Alaskan coast.

    The U.S. Court of Appeals for the D.C. Circuit heard the oral argument in Center for Sustainable Economy v. Jewell on September 11th. Policy Integrity senior advisor Michael Livermore represented the plaintiff, arguing that BOEM must consider option value to make the leasing system economically fair. The case could have significant implications for all government natural resource leasing programs. A ruling is expected in the coming months.

    The opening brief for the case is available here and the reply brief is available here. Audio of the oral argument is available here.

    Issue(s): Energy and Environment  

  • Friday
    August 8th,
    2014

    Tobacco Products and Consumer Welfare - Public Comments

    Policy Integrity recently submitted public comments to the Food and Drug Administration (FDA) on its proposed rule to deem certain tobacco products, such as electronic cigarettes and cigars, subject to regulation. We believe the FDA may be dramatically understating the benefits from consumer behavior changes due to regulation of new tobacco products.

    Developing a more balanced and accurate presentation of benefits is essential, both to highlight the social value of this rule, and to set the right precedent for analyzing future regulations of tobacco (and other addictive, status-driven consumer products).

    We believe the proposed rule analysis needs some important economic adjustments, including:

    • The FDA must justify its discounting decision. The agency essentially discounts 70 percent of the rule’s potential benefits to account for consumers’ lost pleasure from not smoking. The percentage seems to have been arbitrarily selected from a range of estimates in a single study, and the lack of transparent explanation violates best practices for regulatory analysis.
    • The analysis must recognize that tobacco products are “positional goods” – their value depends strongly on how they compare with things owned by others. Tobacco regulation is a cooperative solution that allows consumers to achieve what they could not in the non-cooperative open market: an aggregate reduction in smoking that does not radically upset status hierarchies.The FDA should consider what portion of the allegedly positive consumer welfare from smoking is derived from tobacco’s positional nature, and adjust its findings accordingly.
    • In its valuation of health outcomes, the FDA should account for dread and suffering. Research suggests that people’s willingness-to-pay to avoid a cancer death may be roughly double the valuation of avoiding instantaneous death. As such, the analysis of a rule that can prevent cancer and other long-latency diseases should reflect costs from morbidity and suffering, not just mortality (other agencies, such as EPA, already account for these factors in regulatory analysis).

    Much more detail on these and other points can be found in our full comments.

    Issue(s): Cost-Benefit Analysis, Health and Human Services   Type: Public Comments

  • Friday
    July 11th,
    2014

    Richard Revesz Testifies at House Energy and Commerce Committee Hearing

    Richard Revesz, director of the Institute for Policy Integrity, testified at a U.S. House of Representatives Committee on Energy and Commerce hearing on July 11 to discuss the proper role of the federal government in environmental regulation. At the hearing, entitled, “Constitutional Considerations: States vs. Federal Environmental Policy Implementation,” Revesz discussed a series of instances in which federal action is desirable.

    A portion of Revesz’s testimony focused on fugitive methane emissions from fracking. “Fugitive methane’s interstate—and, indeed, international—impacts make it particularly well suited to federal regulation,” Revesz told the committee. Due to these interstate spillovers, Revesz recommended additional federal performance standards to constrain greenhouse gas emissions from upstream sources like natural gas wells, pipelines, and storage tanks. “Upstream gas infrastructure is already subject to performance standards for the emission of volatile organic compounds and hazardous air pollutants. While those standards have the co-benefit of reducing methane emissions, directly regulating methane would generate significant additional reductions.”

    In addition to his discussion of regulating methane emissions, Revesz spoke about interstate externalities and the Clean Air Act, and the federal government’s preemption of more stringent state environmental standards. The full text of his testimony is available here and a video of the hearing is available here.

    Issue(s): Energy and Environment