In October 2023, the Michigan Public Service Commission issued an order in the benefit cost analysis (BCA) matter for which we filed comments in June. The order adopts several of our recommendations, and specifically cites us for several of them. For example:
- The Commission agrees with Staff and various commenters (including us) that the BCA is missing a lot of categories for environmental and societal impacts, requires that those be added, and further orders that they should be monetized wherever possible and quantified where they can't be monetized.
- The Commission finds specifically that GHG emissions should be monetized and that the calculation should include upstream and downstream GHG emissions. It further notes that this means applicant utilities will need to identify baselines. They specifically cite us for the last point about baselines.
- The Commission agrees with various commenters (we were one) that WACC is not appropriate for the discount rate because the Societal Cost Test is intended to give a long-term and society-wide perspective, and it directs that the rate should be in the National Standard Practice Manual's recommended range of between 0 and 3%.
- The Commission finds the BCA proposal should apply to natural gas utilities and that the BCA for gas utilities should include effects (if any) on electric production and distribution.
- The Commission specifically agrees with NYUIPI that benefits should be viewed in terms of NPV, and not simply ratio of benefits to costs.