Institute for Policy Integrity Comments on New Jersey Rejoining the Regional Greenhouse Gas Initiative
New Jersey is proposing a new state carbon emissions trading program, which means it will rejoin the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cooperative effort among northeastern states to reduce carbon emissions from the electric power sector through allowance trading. New Jersey previously left the initiative in 2011. RGGI expansion promises several benefits, such as improved market efficiency, increased competitiveness, and lower carbon reduction costs. We submitted comments to both RGGI and New Jersey on how to best reintegrate the state.
Institute for Policy Integrity Comments to the California Air Resources Board on its Cap-And-Trade Program
Our previous comments in October 2017 and March 2018 suggested that ARB set the allowance price ceiling at least as high as the Interagency Working Group’s Social Cost of Carbon (SCC) estimates. We now recommend that the price floor should also account for the SCC. Setting both parameters appropriately is crucial to ensuring that the program sends effective price signals and accurately reflects the damage caused by carbon emissions. Our comments also address the ARB’s discussion of leakage, offset projects located outside the U.S., and how California can better allocate unsold carbon allowances.
Institute for Policy Integrity Comments on New Jersey’s Energy Master Plan
New Jersey is revising its Energy Master Plan (EMP) for 2019. In advance of the first draft of the plan, the New Jersey Board of Public Utilities, along with other state agencies, formed a committee to engage with stakeholders on the contours of the new plan. We submitted comments to the EMP Committee with a number of recommendations. Specifically, in drafting the 2019 EMP, we advise the Committee to consider grid resilience in a holistic manner and apply cost-benefit analysis to resilience plans and investments; adopt a granular approach to rate design, rather than use net metering; and design an incentive structure for energy storage operators to ensure that the use of energy storage systems reduces greenhouse gas emissions. These recommendations draw upon several of our recent publications on electricity policy, including reports on grid resilience and energy storage, and an academic article, also on energy storage. The first draft of the EMP is scheduled to be released this winter.
Institue for Policy Integrity Comments to the California PUC on Energy Storage
We recently submitted comments to the California Public Utilities Commission on the Self-Generation Incentive Program (SGIP). Retrospective review of SGIP has found that, contrary to the program’s goals, greenhouse gas emissions sometimes increase when energy storage systems are deployed. To address this unintended consequence, the CPUC Energy Division Staff issued a set of recommendations on how to improve the program, including by creating a real-time greenhouse gas emissions factor for energy storage operators to use, and by tying the SGIP incentive payments to greenhouse gas performance. Our comments provide the CPUC with our original analysis on energy storage to support these recommendations, including our recent report, Managing the Future of Energy Storage, and an academic article, by Policy Integrity’s Director, Richard Revesz, and Energy Policy Director, Burcin Unel, Ph.D, on energy storage and greenhouse gas emissions.
Institute for Policy Integrity Comments to Virginia on Integrated Resource Planning
We recently submitted comments to the Virginia State Corporation Commission on the integrated resource plan (IRP) of the Appalachian Power Company. These comments focus on how the Commission should require utilities to analyze climate impacts when planning how to balance future fossil fuel-based electricity generation against renewable energy options. Under the Virginia Code, the Commission is required to consider whether IRPs are “reasonable” and “in the public interest.” We make the case that climate damages fall squarely within the realm of public interest. Therefore, we argue that the Commission should require electric utilities to more transparently quantify the greenhouse gas emissions of alternatives, and to monetize the associated climate damages using the Social Cost of Greenhouse Gas metrics. Such analysis is necessary to allow the Commission to rationally identify the most efficient plan option that advances social welfare for Virginia, and to allow ratepayers and citizens to better understand the environmental effects of the portfolios chosen.
Institute for Policy Integrity Comments on Vermont’s Standard Offer Program
We recently submitted comments on Vermont’s standard offer program, which is designed to support smaller-scale renewable energy projects. One component of the standard offer program compensates generators that provide benefits to grid operation and management. In the past, the Vermont Public Utilities Commission has focused its view of these benefits to reward only generators that relieve transmission constraints. However, our comments urge the PUC to take a broader view of benefits to grid operation and include resilience benefits and avoiding climate effects on the grid. We cite our July 2018 report, Toward Resilience, to give the PUC more guidance on how to think about and value grid resilience. We also recommend that, when more broadly assessing the entire standard offer program’s benefits, the PUC should monetize any avoided climate externalities by using the social cost of greenhouse gases.
Institute for Policy Integrity Comments to the Colorado Public Utilities Commission on Electric Resource Planning
We recently submitted comments about to the Colorado Public Utilities Commission, which is reviewing its rules on electric resource planning (“ERP”). Our comments aim is to ensure that a proper valuation of externalities is integrated into Colorado’s ERP process, and we suggest using the Social Cost of Carbon to monetize greenhouse gas externalities.
Institute for Policy Integrity Comments to the Nevada PUC on the Proposed Regulation to Implement SB 65
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.
Institute for Policy Integrity Comments to New York on Electricity Rate Design
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.
Institute for Policy Integrity Comments on California’s Distributed Energy Resources Policy
We submitted comments to the CPUC commending the agency for its revisions to the proposed analysis and recommending additional improvements. We encourage the CPUC to use the Societal Cost Test to not only gather information, but to use it as the primary tool to guide investment decisions. We also encourage the CPUC to follow its revised plan and our earlier recommendations by using the Social Cost of Carbon, as developed in 2016 by the federal government, to consider the climate benefits that DERs can provide by displacing fossil fuel generation. We also encourage CPUC to use methods developed by the US Environmental Protection Agency to calculate the air quality benefits that DERs can provide, while the state develops a more robust method. These actions will allow the Commission to make investments that provide the greatest net benefits.