Kansas corporation commission

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Kansas corporation commission

• Externalities in Benefit Cost Tests

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EXTERNALITIES DRAWING THE LINES

• External to What?
• Changing Notions of Insult/Value
• Assessing Damages
• Assigning Costs

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COSTS OF ENERGY

• MARKET

• SOCIETY

• Exploration/Evaluation
• Harvesting
• Processing/Refining
• Transport/Distribution
• Storage
• Conversion
• Marketing
• End Use

• Land/Air/Water Used
• Effluents
• Human Health
• Physical Transformations
• Socio-political Influences (politics, employment)

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(No Transcript)
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WATER
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(LESS) WATER
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AIR
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CLIMATE
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HEALTH

• Concerns
• Asthma
• Stroke
• Heart Attack
• Lung Disease
• Mercury Poisoning (especially in utero)
• Insect-borne Disease (changing pathogen vectors)

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WHATS THE RIGHT COST?

• ITS NOT ZERO

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DOING THE MATH

• EC EF x HR x VED
• EC Externality Cost in /kWh
• EF Emission Factor, in lbs/Btu of fuel consumed
• HR Heat Rate of power plant, in Btus/kWh
• VED Value of Environmental Damage, in /lb

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CONSIDERATIONS

• Physical or Social Consequences of Insults
• Magnitudes of Consequences
• Temporal Distribution of Harm
• Spatial Distribution of Harm
• Coincidence of Risks and Benefits
• Scaling (linear or nonlinear)
• Resistance to Remedy
• Irreversibility
• Visibility of Harm

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EFFICIENCY AS A RESOURCE

• Efficiency makes economic sense now, whether or
  not externalities are considered.

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Cost of New Electricity Resources
Source ACEEE 2008, EPRI 2006 UCS 2008
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EFFICIENCY AS A RESOURCE

• Efficiency AS New Generation
• Verified, Permanent Reductions
• Performance Standards (1 )
• Least Cost Resource

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IMPLICATIONS FOR BENEFIT/COST

• Changes in Economy Society Swift and Dramatic
• Flexibility, Not Stasis, Makes Sense
• Total Resource Cost Test Preferable
• Ratepayer Impact Measure Would new generation
  withstand this test?
• Emphasis on Lower Bills

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Perverse Incentives

• If we choose not to provide incentives for
  investor-owned utilities that, added to avoided
  costs, rival ROI for new generation, then we need
  to look closely at the following map

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STATES WITH PUBLIC BENEFIT FUNDS
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• Nancy Jackson
• Executive Director
• jackson_at_climateandenergy.org
• [phone]
• www.climateandenergy.org