Institute for Policy Integrity Comments to California’s Public Utilities Commission on Energy Planning
We recently submitted comments to California’s Public Utilities Commission, focused on the economic analysis used in its longer-term energy planning process across utilities. We ask the Commission to exercise caution in coordinating or consolidating this planning with other energy-related proceedings, as different proceedings have different goals and statutory requirements.
Specifically, a marginal abatement cost value may be appropriate when trying to minimize costs of achieving a set amount of greenhouse gas reductions, while maintaining a consistent treatment of different resource types and regions. However, marginal damage costs, like the social cost of carbon, should be used when comparing societal benefits and costs with the aim of finding the portfolio of projects that maximizes net welfare. Using a marginal abatement cost method across the board would not help California determine the mix and deployment of clean energy and related technologies that maximize net benefits to society.