Karen Palmer

The Social Costing Debate: Issues and Resolutions

This report is meant to provide guidance to PUCs and other parties interested in the social costing debate, although it will also yield useful information to those concerned with improving environmental policy in general.

Implementing Social Costing in the Electric Utility Industry1

Social costing refers to the regulatory practice of requiring electric utilities to incorporate external costs into utility decision making. This practice is being adopted by a growing number of state public utility commissions (PUCs). The effectiveness of this new regulatory approach in reducing the social costs of supplying electricity will depend on the range of utility decisions covered. We use a utility planning model and illustrative estimtes of environmental costs to analyze the implications of different social costing regimes for generation technology choice, social and private costs of electricity supply and electricity price. Due to large differences in private costs across technologies and fuel types, social costing regulation has little or no effect on the utilitys investment decisions, dispatch of generators or output price for many of the external cost estimates considered. Applying social costing exclusively to new generating units could result in increased use of existing units and higher social cost electricity production.

How reliably can climate change and mitigation policy impacts on electric utilities be assessed

Abstract Numerous mechanisms link climate change and electric utilities. Electricity generation releases radiatively active trace substances (RATS). Significant changes in atmospheric concentration of RATS can lead to a change in regional and global climate regimes. Mitigation action designed to prevent or limit climate change is possible through curbing emissions. Climate change and related mitigation actions impact on electric utilities. Foresight in electric utility planning requires reliable predictions of how the utilities may be affected in the decades ahead. In this paper the impacts of climate change and mitigation policies are noted, and our ability to assess these is reviewed. To this end a suite of models exploring supply and demand questions have been developed. The overall conclusion of the study is that the demand-side uncertainties dominate other unknowns and need to be better characterized and understood.