Comments on New York State’s “Reforming the Energy Vision” Initiative
We recently submitted comments to the New York State Public Service Commission regarding the Reforming the Energy Vision (REV) initiative, which seeks to spur clean energy innovation and improve consumer choice and affordability in New York State. The Commission sought comments on how best to develop a cost-benefit analysis framework to evaluate utility proposals within the REV and related proceedings. Our comments addressed the consideration of externalities and the social cost of carbon in the Commission’s cost-benefit analysis.
We suggest that the Commission conduct a comprehensive cost-benefit analysis that monetizes all benefits and costs of alternative proposals, including externalities, in order to determine which projects to prioritize in modernizing New York State’s power grid. In particular, the Commission should ensure that the primary cost-benefit analysis on REV-related projects employs a societal perspective and a societal discount rate, and differentiates, as appropriate, between resource-allocation decisions and pricing decisions. The analysis should account for all externalities, including health and environmental benefits, as determined through the use of the social cost of carbon. The cost-benefit analysis should use true resource costs and monetize effects using the full marginal damage value of the avoided emissions. By applying these best practices, the Commission can ensure that its cost-benefit analysis is accurate, robust, and manageable.
Through REV, the Commission is taking steps to ensure that New York’s electricity system is ready for future changes and challenges. An effective cost-benefit analysis framework will help to maximize net benefits for the people of New York, both today and in the future.