Policy Integrity Input Leads to Climate Progress in Nevada
Input from the Institute for Policy Integrity helped encourage Nevada to modernize its energy policymaking by accounting for the impacts of carbon pollution in key electric utility planning decisions. At the recommendation of Policy Integrity and partner groups, the Public Utilities Commission of Nevada recently included language on the Obama-era Interagency Work Group’s Social Cost of Carbon (SCC) in new rules governing utilities’ resource plans. Utilities will now have to analyze and clearly disclose the damages caused by climate change when evaluating alternative long-term resource plans. This information will be used by utilities and the Commission when selecting their preferred resource plan.
In 2017, the Nevada Legislature passed Senate Bill (65), which changes Nevada’s Integrated Resource Planning requirements to compel the Commission to give preference to those supply resources that “[p]rovide the greatest economic and environmental benefits to the State . . . and which reduce customer exposure to the price volatility of fossil fuels and the potential costs of carbon,” among other requirements. In August 2018, the Commission finalized a new regulation in response to SB 65, requiring utilities to “estimate the level of environmental costs resulting from carbon dioxide emissions for that year and the social cost of carbon,” and select the preferred plan based on “the present worth of societal costs for each alternative plan.” The new rules specifically require use of the “best available” estimate of “future global economic costs” from climate change, and recommend using estimates “released by the Interagency Working Group on Social Cost of Greenhouse Gases in August 2016.”
Policy Integrity and its partners, Western Resource Advocates and Environmental Defense Fund, engaged with the Commission over the course of several months to ensure this language on the SCC was included. Stakeholders, including Policy Integrity and its partners, participated in a hotly negotiated series of workshops addressing how to incorporate pollution costs into the utility’s analyses. Ultimately, the Commission landed on a version of the regulation that focused on using the best available science and economics to monetize the cost of carbon emissions. In large part thanks to our advocacy efforts, both in workshops and through written comments, the Commission recognized the SCC as it was developed under the Obama administration as an example of an appropriate metric to use in this valuation process, notwithstanding the fact that the SCC has since been criticized and altered by the Trump administration.
The regulation still must be approved by Nevada’s Legislative Commission before it becomes official.