New Hampshire State Representatives Barry, Moore, and Notter introduced a bill on January 7, 2015 that would end the state’s participation in the Regional Greenhouse Gas Initiative (RGGI). On behalf of New Hampshire’s Office of the Consumer Advocate, Synapse staff testified before the Science, Technology and Energy Committee that repealing RGGI would result in higher bills for New Hampshire consumers and would eliminate the least expensive way for New Hampshire to comply with upcoming federal regulations.
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Synapse, the Labor Network for Sustainability, and 350.org prepared a report that lays out a strategy to reduce greenhouse gas emissions 80 percent from 1990 levels by 2050, and refutes claims that achieving these targets will threaten jobs and the U.S. economy. In fact, analysis suggests that the plan will save $78 billion in costs of electricity, heating, and transportation from now through 2050 and will create more than 500,000 jobs per year compared to business as usual. By expanding renewable energy and energy efficiency, phasing out all coal-fired power by 2050, and decreasing natural gas capacity, along with modest changes in other sectors, the United States could reach or surpass the 80 percent reduction target while creating new jobs and saving money.
The series of published reports can be found at http://climatejobs.labor4sustainability.org/.
The Clean Energy Future: Technical Appendix
Synapse reviewed a draft environmental impact statement (EIS) for the proposed Tongue River Railroad line in Montana. The statement was submitted to the Office of Environmental Analysis’ Surface Transportation Board as part of Docket Number 30186, in which the Tongue River Railroad Company petitioned for the construction and operation of a rail line from Ashland to Decker, Montana. Synapse analyzed the modeling, assumptions, and conclusions in the draft EIS, and assessed the appropriateness of both the methodology used and the presentation of results in the context of the region’s energy system and expected regulatory climate.
On behalf of TVA, Synapse conducted and documented a review of TVA’s short- and long-term fuel cost assumptions and determined the extent to which those practices are appropriate, complete, and consistent with industry best practices.
Synapse assisted Utah Clean Energy with review and input at a stakeholder workgroup meeting regarding the application of demand-side management (DSM) cost-effectiveness screening tests and practices to net energy metering (NEM) in Utah. Synapse presented on the Utility Cost Test and why it is an appropriate test for net energy metering screening; why the Rate Impact Measure test is not appropriate for either energy efficiency or NEM screening; and an alternative method for assessing the potential rate impacts and equity issues of NEM.
Synapse developed testimony on behalf of The Alliance for Solar Choice supporting a fair and reasonable methodology and assumptions for calculating the costs and benefits of solar PV in North Carolina. Our analysis focused on major costs the utility system avoids as a result of solar PV within the context of PURPA, including avoided energy costs, avoided generating capacity costs, price suppression, and other major categories of avoided costs.
Biennial Determination of Avoided Cost Rates for Electric Utility Purchases from Qualifying Facilities Additional Testimony
Synapse provided consulting services to the West Virginia Consumer Advocate in connection with Wheeling Power Company's petition for approval to acquire an ownership share in the Mitchell coal-fired station.
Synapse’s Excel-based tool estimates states’ electric-sector costs and benefits of complying with the EPA’s “111(d)” Carbon Pollution Guidelines for Existing Power Plants. In the proposed rule, EPA presents estimates of the costs and benefits of compliance equivalent to a national net benefit of $13 billion to the electric sector in 2030 (not including additional costs to energy efficiency program participants or climate-damage reduction and health benefits). As the agency does not provide state-level compliance costs or benefits, Synapse’s tool estimates state costs to implement the EPA’s “building blocks” by assuming EPA’s average national costs by measure and using the avoided cost of energy to calibrate the results. You can also find it on our Tools page.
In this brief guide, Synapse identifies aspects of the Clean Power Plan about which the EPA is seeking comments.
In this free webinar, Synapse identified what states can and should be doing to ensure that their perspectives on the draft 111(d) rule are heard by the EPA, and to develop 111(d) compliance plans that minimize costs and maximize local benefits. The webinar reviews fundamental elements of the draft rule, discusses best practices for developing comments, and reviews the analysis tools states can use to develop least-cost compliance plans.
Richard Tol's 2013 review article, "Targets for global climate policy," has been widely cited as a definitive statement on the economics of climate change, and was the sole source for portions of the recent IPCC reports. Synapse reviewed the article and found it to be unreliable in three major respects. First, it asserts that only 16 studies, a repetitive and dated subset of the research literature, represent the extent of knowledge about the economic impacts of climate change. Second, it identifies a large number of estimates of the "social cost of carbon," but then focuses almost exclusively on the minority of estimates that assume a high discount rate. Third, its estimate of the cost of large-scale emission reduction is based on an ad hoc extrapolation from model results for more modest reduction targets. As a result of these flaws, the article's recommendation of a very low carbon price and "optimal" CO2 levels above 600 ppm should not be relied on.
Synapse provided support to ACEEE in its development of a Mississippi energy efficiency potential study. Synapse provided analysis of wholesale electricity supply prices for the reference case, high-level estimates of avoided electric energy and capacity costs, and projections of electricity supply prices under a clean energy policy case. Project completed January 2014. Access the report here: http://www.aceee.org/research-report/e13m.
Since 2005, Synapse has provided analysis of New Jersey's Basic Generation Service (BGS) procurement options for the New Jersey Division of Rate Counsel. The BGS procurement process includes annual auctions held by the State of New Jersey for the procurement of fixed-price, basic electric generation service (BGS-FP). BGS-FP service is the name of the rate plan for those residential and small commercial customers who choose not to use a competitive supplier for their electricity needs. Synapse's BGS procurement analysis takes into consideration the BGS auction process and other factors relevant to procurement options for NJ BGS customers. Synapse's analyses include assessment of procurement options in other states; futures markets for electricity, natural gas, and coal; recent auction/RFP results for BGS-FP-equivalent services from other states; PJM technical issues affecting BGS procurement considerations; and other relevant issues. Project work for the 2012 proceeding completed in April 2013.
Synapse was retained by BC Hydro to conduct a review of its 2013 Integrated Resource Plan (IRP) and to prepare a report detailing whether specific input assumptions and the methodology for analyzing resource alternatives align with good utility resource planning practices. Before preparing this report, we reviewed the relevant sections of BC Hydro’s IRP, the various filings made as part of the 2013/2014 Site C environmental assessment process, and various other utility planning documents.
Specifically, Synapse was asked to comment on the following: 1) the differential between the weighted average cost of capital (WACC) for BC Hydro and for Independent Power Producers (IPPs); 2) the use of sensitivity analyses as a means to evaluate the direction and magnitude of risk; 3) the use of analytical methods, including the appropriateness of BC Hydro’s Unit Cost Comparison, as well as the System Optimizer model; and 4) the calculation of annualized costs with respect to resource end-of-life.
Synapse is providing expert technical consulting services to the District of Columbia’s Office of the Attorney General related to Exelon Corporation’s proposed acquisition of Pepco Holdings. Specifically, Synapse reviewed the Joint Applicants' economic impact analysis; merger-related reliability issues; risks associated with the Joint Applicants’ affiliated non-jurisdictional business operations and issues related to conservation of natural resources and preservation of environmental quality. Synapse is submitting testimony in the legal proceeding on behalf of the District of Columbia Government. Synapse performed similar analysis related to the merger on behalf of clients in Delaware, Maryland, and New Jersey.
Direct Testimony of Max Chang on Reliability, Risk, and Environmental Impacts of Exelon-Pepco Merger
Answering Testimony of Tyler Comings on the Economic Impact Analysis of the Exelon-PHI Merger
Answering Testimony of Max Chang on Reliability Impacts of the Exelon-PHI Merger
Synapse and Optimal Energy assisted Sierra Club by providing expert testimony on Florida’s achievable energy efficiency (EE) and distributed generation (DG) potential, as well as the policies that are needed to promote these important resources. For both EE and DG, Synapse (a) provided a technical assessment of the economic potential; (b) provided a benchmarking analysis comparing the EE and DG resources that Florida utilities are planning to implement relative to utilities in other Southeastern states; (c) critiqued the utilities efficiency screening process; (d) critiqued the utilities resource planning process; and (e) recommended policies to help promote the development of EE and DG in the current docket and in the future.
The Center for Rural Affairs required technical assistance regarding the future of the Nebraska Public Power District (NPPD)‐owned Sheldon Station generating plant, including research, analysis, and findings presented in a report. Synapse detailed Sheldon’s future capital and operating costs and generation benefits, presented a list of credible options for NPPD’s replacement of Sheldon, and documented these findings in a clear, concise manner.
Synapse researched Sheldon’s future costs (i.e., costs driven by environmental regulation, market forces, and daily operations), as well as estimated the benefits NPPD gained by the plant’s operation, including those related to NPPD’s energy, capacity, and reliability needs. Synapse then outlined Nebraska‐specific options for alternatives, including energy efficiency, wind or solar photovoltaic generation, natural gas generation, market purchases, and/or transmission upgrades.
Frank Ackerman provided editorial comments and assistance at multiple stages in the Regulatory Assistance Project’s analysis of and reporting on the electricity-water nexus.
Synapse’s Patrick Knight presented “AVERT and 111(d)” at the EPA Carbon Standards Technical Meeting for Midwest Advocates in Chicago, Illinois on July 24, 2014.
In its Reforming the Energy Vision proceeding, the New York Public Service Commission has undertaken an ambitious initiative to improve the New York electricity system through better incorporation of distributed energy resources (DERs): distributed generation, distributed storage, energy efficiency, and demand response. To support this initiative, Synapse developed a benefit-cost analysis framework that will provide the Commission and other stakeholders with the information necessary to determine which resources will be in the public interest and will meet the Commission’s energy policy goals. This DER benefit-cost analysis framework outlines the methods for identifying, valuing, and monetizing costs and benefits associated with DERs, including those that have traditionally been hard to quantify, and thus previously ignored. The framework also discusses how to account for the risk mitigation benefits of DERs, and provides guidance regarding the appropriate discount rate to use for evaluating distributed energy resources to meet state energy policy goals.
On October 2, Tim Woolf presented the framework in a webinar. The slides are available below; the full recording with audio can be accessed here.
Webinar: Benefit-Cost Analysis for Distributed Energy Resources In New York
EM&V Forum Presentation: Benefit-Cost Analysis for Distributed Energy Resources In New York
Synapse Energy Economics was retained by Sierra Club to provide feedback on Big Rivers’ 2014 Integrated Resource Plan (IRP) process. Synapse outlined ways that the Big Rivers IRP did not align with the objectives of long-term planning through detailed review of the company’s modeling inputs, outputs, and post-modeling calculations. Synapse evaluated market forecasts, load forecasts, future environmental compliance obligations, assumptions surrounding scenarios and sensitivities, and the economic value of the utility's existing coal units.
When Big Rivers Electric Corporation, a small cooperative in western Kentucky, lost its major customers--two large aluminum smelters that formerly accounted for two-thirds of the company's load--the cooperative gained enormous excess capacity. Big Rivers responded by proposing to idle one or two of its coal plants for a few years, while requesting large rate increases for its remaining customers to absorb the costs of the loss of the smelters. In two related rates cases, Synapse provided expert witness testimony critiquing Big Rivers' economic analyses, including its forecast of market demand and the price of electricity; and examined rate design issues, including treatment of stranded assets and the balance between demand and energy charges. As a foundation for our analysis, Synapse developed detailed spreadsheet recalculations of the company's future under more reasonable assumptions. In issuing a decision, the Kentucky Public Service Commission incorporated several Synapse recommendations, including the argument that the Wilson coal plant represents excess capacity and should be excluded from rate recovery. The Commission ultimately granted Big Rivers a base rate increase of 14 percent, which is approximately 51 percent of the cooperative’s originally requested revenue increase.
On behalf of the New Hampshire Office of Consumer Advocate, the Maine Office of the Public Advocate, and the Connecticut Office of Consumer Counsel, Synapse analyzed the expected financial position of the three coal units at the Brayton Point station. The goal was to determine an expected price at which the station would be willing to participate in the 8th Forward Capacity Auction, which had occurred six weeks earlier, and from which the station chose to retire. Synapse also assisted the clients with a comment filing submitted to the FERC to accompany the financial analysis.
Building on Synapse’s carbon dioxide price forecast, “CO2 Price Forecast: Planning for Future Environmental Regulations” explores the paths that the electricity sector has taken to appropriately account for the price of carbon dioxide in resource planning. The article appears in the June 2014 issue of EM Magazine, a publication of the Air & Waste Management Association (A&WMA; www.awma.org). To obtain copies and reprints, please contact A&WMA directly at 1-412-232-3444.
Bruce Biewald presented on Synapse’s Coal Asset Valuation Tool (CAVT) at the Institute for Energy Economics and Financial Analysis' Coal Finance 2014 Conference on March 19, 2014. CAVT is a spreadsheet-based database and model that determines the future economic viability of coal units. CAVT forecasts the costs for individual coal units to comply with environmental regulations and compares these costs to electricity market prices. It aggregates publicly available data (such as capacity, generated power, and heat rate) on non-cogenerating coal units and combines this with publicly available cost methodologies to calculate the cost of complying with environmental regulations. The calculated future cost of each coal unit is compared to the estimated future cost of wholesale market purchases to determine future economic viability on a unit-by-unit basis.
Synapse was retained by Energy Foundation to analyze a wide range of issues related to coal-fired power generation. Project completed May 2014.
Synapse Energy Economics was retained by Sierra Club to provide feedback on Cleco Power’s modeling inputs and direction for its 2014 Integrated Resource Plan, and to provide recommendations to improve the planning process. Project completed May 2014.
In November 2013, the Obama Administration released an updated estimated social cost of carbon that raised the cost per metric ton used in federal regulatory analyses from $21 to $35. On behalf of the Environment, Economics and Society Institute, Synapse submitted comments to OMB with a brief critique of the Administration's methodology, focusing on problems that would result in underestimation. Project completed February 2014.
Synapse assisted Clean Wisconsin with responses to the Public Service Commission of Wisconsin’s (PSC) January 30, 2014 Request for Comments on Focus on Energy, Wisconsin’s statewide energy efficiency and renewable program. Synapse reviewed background materials and drafted comments in five topic areas: meeting federal carbon standards, energy and demand emphasis, overall goal, rate impact mitigation, and renewable energy.
Synapse assisted PennFuture, the Sierra Club, and Clean Air Council on their comments to the Pennsylvania Public Utility Commission regarding the proposed cost-effectiveness tests and program design for Act 129 Demand Response. Project completed January 2014.
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