Resource Choices in a Carbon-Constrained World. NARUC Annual Meeting November 12, 2007 Richard Cowart. Introduction.
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NARUC Annual Meeting
November 12, 2007
“We’ve been asking the question: ‘Given this price forecast, what should we invest in?’ The real question is, ‘Given that we don’t know what prices are, what should we invest in?’”
--Lee Raymond, CEO Exxon-Mobil (WSJ 4-8-05)
Source: Stern Review (UK) October 2006
1980s coal and nuclear
1990s not much
2000s gas and more gas
2010+ coal & gas?
Source: EIA AER 2006
Over 23GW new coal being added now.
71GW total possible
With $25 carbon price
Price increase due to carbon price
Demand at 130,000 MW
Source:“The Change in Profit Climate: How will carbon-emissions policies affect the generation fleet?”
Victor Niemeyer, (EPRI) -- Public Utilities Fortnightly May 2007 <some captions, demand and price lines added>
**Source: Bernstein Research, “US Utilities: The Implications of Carbon Dioxide Regulation” (October 2007)
--Proposed legislation, from Committee Substitute, S3 (North Carolina) June 2007 (emphasis added)
Realistic power solutions require “what utility regulators do” not just “what environmental regulators do”—
--Energy Secretary Bodman speaking to NARUC (July 16, 2007)
time” -- Thomas Kuhn, President EEI
works, but we haven’t really done it in a way that is sustainable
and durable over time.”
---Bill Brier, EEI Vice-President of Policy and Public Affairs
(Electric Utility Week 10/29/07)
*Generation cost data (except nuclear) from EPRI (“Generation Technologies in a Carbon-constrained World,” 2005, assuming gas at $6MMbtu); EE data from Efficiency Vermont. For the point made here the precise numbers are not critical.
Source: Vattenfall carbon study 2007
Steve Nadel, ACEEE October 2007
Utility IRP, LCP or other long-term planning process (22 states)
IRP or PM under review (6, with DC)
Standard offer -- Portfolio Management or other long-term planning process (6)
No formal IRP process now (17)
Source: Pugest Sound Energy long term resource planning process- March 2003
Planning isn’t everything – direct regulatory tools are also needed
Many possibilities lie within the portfolio management functions of electric service providers – and scope of utility regulation.
RAP is a non-profit organization providing technical and educational assistance to government officials on energy and environmental issues. RAP is funded by US DOE & EPA, several foundations, and international agencies. We have worked in 40+ states and 16 nations.
Richard Cowart was Chair of the Vermont PSB, Chair of NARUC’s Energy & Environment Committee, and of the National Council on Electricity Policy. Recent assignments include technical assistance to RGGI, the New York ISO, the California PUC, the Oregon Carbon Allocation Task Force, and to China’s national energy and environmental agencies.
Contact him at RAPcowart@aol.com