The Cost of Climate Pollution

Washington State UTC Directs Utilities to Use “Robust” SCC Estimate

uWashington Electric Power Sector May 2019

• Application

  Integrated resource planning

• Date

  May 2019

• Details

  In May 2018 Acknowledgement Letters approving integrated resource plans for the state’s three investor-owned utilities, the Washington State Utilities and Transportation Commission recommended that the utilities to use a more robust cost of carbon estimate in the future. 1 The Commission suggested the companies use the 2016 IWG SCC estimates for their next IRPs. In early 2019, the state enacted a law requiring the use of the social cost of carbon in utility resource planning, specifying that utilities should use the IWG Social Cost of Carbon at the 2.5% discount rate. 2

• SCC Value(s)

  $78 per metric ton for 2020 emissions based on 2010 IWG SCC estimates. 3

• Reference

  • PSE: UE-160918, UG-160919
  • Avista: UE-161036, UG-160292
  • Pacific Power: UE-160353

• Legal Authority

  • The Acknowledgement Letters instructed the utilities to begin using a social cost of carbon value in their IRP alternatives analysis to determine the “lowest reasonable cost” resources as defined in Washington Administrative Code § 480-100-238. 4
  • Executive Order 14-04 on Washington Carbon Pollution Reduction and Clean Energy Action requires the state’s agencies to “[e]nsure the cost-benefit tests for energy-efficiency improvements include full accounting for the external cost of greenhouse gas emissions.” 5

• Updates

  SB 5116, passed in April 2019, requires utilities to use the IWG social cost of greenhouse gases, at the 2.5-percent discount rate, when developing integrated resource plans and clean energy action plans. 6

1.  PSE: UE-160918, UG-160919; Avista: UE-161036, UG-160292; Pacific Power: UE-160353. ↩︎
2. Wash. Sen. Bill. 5116 (signed by Gov. Inslee on May 7, 2019). ↩︎
3.  See, e.g., State of Washington, Department of Ecology, Preliminary Cost-Benefit and Least-Burdensome Alternative Analysis: Chapter 173-442 WAC Clean Air Rule & Chapter 173-441 WAC Reporting of Emissions of Greenhouse Gases (2016), at 38, available here; inflated from 2007 dollars to 2017 dollars.  ↩︎
4.  E.g., 2017 Electric IRP Acknowledgement Letter, Attachment, Pacific Power & Light Company 2017 Integrated Resource Plan, Docket No. UE-160353, at 11 (May 7, 2018), available here.  ↩︎
5.  State of Washington, Exec. Order 14-04 at 6, available here. ↩︎
6. SB 5116 - 2019-20, Supporting Washington's clean energy economy and transitioning to a clean, affordable, and reliable energy future. Available here. ↩︎

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