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 (PSE: UE-160918, UG-160919; Avista: UE-161036, UG-160292; Pacific Power: UE-160353), the Washington State Utilities and Transportation Commission recommended that the utilities to use a more robust cost of carbon estimate in the future. 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.

• SCC Value(s)

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

• 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.
  • 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.”

• 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.

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