In the News

While states are right that new FERC rules will needlessly increase costs and be a drag on clean energy, they shouldn’t rush to exit electricity markets yet. States could meet their climate goals while retaining the benefits of markets by pursuing another option: carbon pricing.

Policy makers and regulators around the country are trying to figure out how to rapidly decarbonize the electricity sector. There are debates about what renewable goals states should have, by when, what should count as clean energy, and how much energy efficiency states should invest in. These debates overlook the most important tool we can rely on to achieve our clean-energy goals: markets and price signals.

New York’s economy could stand to gain more than $3 billion if the state’s electric grid operator adopts a simple policy change: putting a price on carbon dioxide emissions from power plants. This is the conclusion of a new study released by the New York Independent System Operator, which manages the state’s electricity grid.

At its full potential, energy storage will improve grid efficiency and resilience, while helping to reduce emissions. But if we don’t get the accompanying policies right, we risk falling short of these improvements.

Every additional ton of the greenhouse gas emissions from burning fossil fuels to generate electricity contributes to climate change. This carbon pollution has many negative consequences, both to the physical world and also to global social and economic systems. But utilities don’t always tally the costs of these consequences. Because dealing with climate change is astronomically expensive, we believe that this should change.

As climate threats mount and the window to act is beginning to close, states need to adopt desirable energy storage policies as quickly as possible.

The Institute for Policy Integrity at New York University School of Law found: “There are no well-established studies that, relying on realistic assumptions, show that increasing the availability of generators with ‘fuel security’ attributes will enhance the resilience of the electric system.” What has been analyzed is the costs of forcing the purchase of power from coal and nuclear plants. And it is substantial.

State climate policies enhance rather than detract from market efficiency, as explained by scholars at the Institute for Policy Integrity in this capacity markets report.

The Trump administration’s coal and nuclear bailout proposals wouldn’t truly protect customers from damaging electricity outages. Policymakers interested in serious, evidence-based resilience improvements already have the tools they need to act—including metrics for measuring resilience, a framework for evaluating improvements, and legal authorities to implement changes.

There are legitimate policy options that could increase the resilience of the nation’s electricity grid, but subsidizing coal and nuclear plants are not among them, says a new report by the Institute for Policy Integrity at New York University School of Law.