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Comments on California Public Utilities Commission’s New Analysis Framework

We recently encouraged the California Public Utilities Commission (CPUC) to clarify aspects of its new process for evaluating the social costs and benefits of energy resources. As we discussed in prior comments, the proposed analysis framework, the Societal Cost Test (SCT), will help the Commission to make investments that provide the greatest welfare benefits. Our new comments ask CPUC to provide some additional information in the SCT proposal.

The Commission is proposing to adopt the SCT as on an interim basis, with the possibility of adopting the test more broadly after an initial testing period. We encourage CPUC to transition towards use of the SCT as the primary test to evaluate distributed energy resources. Our comments also recommend the CPUC make a few clarifications in the proposal. We ask CPUC to explain what it means by the “average value” of the Avoided Social Cost of Carbon, more accurately describe the evidence in the record supporting adoption of the SCT, and make other small clarifications.