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  • News

    Cost of Carbon Website Relaunched

    September 13, 2018

    Costofcarbon.org is now home to our ongoing work on the social cost of carbon (SCC) in U.S. state policy. The domain, which housed SCC-focused research until 2015, has been renovated and refocused to reflect the most important and relevant developments in the application of the SCC in decisionmaking. It includes an easy-to-navigate version of our FAQ Guide for state policymakers, information on state-specific use of the SCC, helpful resources, and more. Our hope is to bring attention to the ways that the SCC continues to be a critical tool used by policymakers in a number of areas, from electricity rate design, to cap-and-trade programs, to fossil fuel royalty rates. A diverse array of stakeholders can benefit from the site’s information and we invite feedback from regulators, partners, and the public on new proceedings that make use of the SCC or matters in which the SCC might be applicable.

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  • Public Comments

    Comments on New York State Energy Storage Roadmap

    September 10, 2018

    In June 2018, the New York State Department of Public Service and the New York State Energy Research and Development Authority released the New York State Energy Storage Roadmap, outlining a series of recommended approaches to achieve Governor Cuomo’s statewide energy storage target of 1,500 MW by 2025. Our comments, based on our Managing the Future of Energy Storage report, generally support the overall approach to reward energy storage systems for all the values they can bring to the electric system, to allow dual participation in both wholesale and retail electricity markets, and to improve price signals to maximize the benefits of energy storage systems.

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  • Academic Articles/Working Papers

    The Future of Distributed Generation

    August 8, 2018

    As distributed energy generation is becoming increasingly common, the debate on how a utility’s customers should be compensated for the excess energy they sell back to the grid is intensifying. And net metering, the practice of compensating for such energy at the retail rate for electricity, is becoming the subject of intense political disagreement. Utilities argue that net metering fails to compensate them for grid construction and distribution costs and that it gives rise to regressive cost shifting among its customers. Conversely, solar energy proponents argue that the compensation should be higher than the retail rate to account for other benefits that distributed generation systems provide, such as the resulting climate change and other environmental benefits, as well as the savings resulting from not needing to build new installations to provide additional capacity. This ongoing debate is leading to significant changes to net metering policies in many states.

    This article provides an overview of the benefits and the costs of distributed generation and highlights the analytical flaws and missing elements in the competing positions and in most existing policies. We propose an alternative approach that recognizes the contributions to the electric grid of both utilities and distributed generators. The article is excerpted and revised from a longer academic article, Managing the Future of the Electricity Grid: Distributed Generation and Net Metering, which was selected by Environmental Law Reporter as one of the five best environmental law articles published in the 2016-2017 academic year.

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  • Reports

    Toward Resilience

    August 1, 2018

    Grid resilience—generally, the electric grid’s ability to resist/absorb, manage, quickly respond, and recover from/adapt to high-impact, low-probability external shocks—has been a concern for electric utilities and energy planners for decades. While recent extreme weather and cyber security concerns have prompted the federal government to pursue policies that support coal and nuclear power plants, a more systematic focus on resilience will lead to very different solutions than what has been proposed by the Department of Energy.

    Our report aims to assist policymakers in understanding grid resilience and evaluating potential interventions aimed at improving grid resilience. It develops a definition of resilience grounded in academic literature; describes a methodology for calculating the costs and benefits of potential grid resilience improvements; identifies legal authorities that states and federal agencies can use to implement resilience-enhancing policies and investments; and analyzes the Trump Administration’s proposals to support coal and nuclear plants in light of the insights developed in the report.

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  • Public Comments

    Comments to the Nevada PUC on the Proposed Regulation to Implement SB 65

    July 25, 2018

    The Nevada Public Utilities Commission recently released a proposed regulation to implement Senate Bill 65, which directs the PUC to give preference to those measures and sources of supply that provide the greatest economic and environmental benefit to the State. In our joint comments with Western Resource Advocates and Environmental Defense Fund, we express our support for these revisions to Nevada’s resource planning regulations. Specifically, we support the Commission’s application of the Interagency Working Group (IWG) Social Cost of Carbon (SCC) estimates to calculate the Present Worth of Societal Costs in Nevada, as reflected in the proposed regulation. In addition, we update the PUC on the use of the IWG SCC estimates in other states, including California, Colorado, Minnesota, New York and Washington State.

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  • Public Comments

    Comments on FERC’s NOI on the Certification of Interstate Natural Gas Pipeline Facilities

    July 25, 2018

    In April 2018, the Federal Energy Regulation Commission (FERC) issued a notice of inquiry on how to revise its policy on certifying the construction and operation of interstate natural gas transportation facilities. In the nineteen years since FERC’s existing policy statement was released, there have been significant advances in the understanding and measurement of climate change and other environmental effects of natural gas production, transportation, and consumption. Our comments suggest clarifications and improvements to FERC’s NEPA and Natural Gas Act analyses that will better inform policymakers and the public about the environmental effects of proposed projects. We also submitted joint comments on the appropriate use of the social cost of carbon in the interstate natural gas facilities certification processes, including why and how greenhouse gas emissions should be monetized in FERC’s NEPA and Natural Gas Act analyses.

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  • Issue Briefs

    How States Can Value Pollution Reductions from Distributed Energy Resources

    July 20, 2018

    DERs are a growing part of the U.S. electric system and many state electric utility regulators are looking to more accurately compensate them by paying for a variety of the benefits that these resources provide. Most states are currently focusing on energy and distribution-level benefits, but this approach overlooks the environmental and public health impacts of DERs. Even though some states like California and New York have been working on analyses that include environmental attributes of DERs, few regulators have attempted a thorough evaluation of the environmental and public health benefits. Our report, Valuing Pollution Reduction, lays out a practical methodology for calculating the E value, the highlights of which are captured here. Specifically, this issue brief describes how to appropriately value environmental and public health benefits by monetizing the economic, health, and climate damages avoided emissions would have caused. State utility regulators can use the steps described here, weighing tradeoffs between accuracy and administrability, to implement their own program to holistically compensate DERs.

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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.We also presented the results of this report to NYS DPS Staff.

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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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