Limiting the costs of renewable portfolio standards: A review and critique of current methods

Stockmayer, Gabriella; Finch, Vanessa; Komor, Paul; Mignogna, Rich

doi:10.1016/j.enpol.2011.11.060

Cited by 19 publications

(17 citation statements)

References 13 publications

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“…Adding these costs to the counterfactual scenario can be contentious, as there is no existing capacity market in Colorado, nor is there a state-wide price on carbon (Stockmayer et al 2012). In its latest RPS compliance plan, Xcel Energy (Colorado) did not include a carbon price for 2014 calculations (PSCo 2013).…”

Section: Inclusion Of a Carbon Addermentioning

confidence: 99%

“…More generally, cost containment under many of the above mechanisms may be imperfect to the extent that certain costs or benefits are not fully counted. For a broader discussion of the design and limitation of RPS cost containment mechanisms, see Stockmayer et al (2012). Note: All ACP rates identified are in units of $/MWh and represent the scheduled ACP rate for the final RPS target year.…”

Section: Rps Cost Containment Mechanismsmentioning

confidence: 99%

“…Many states have cost containment mechanisms in place that limit RPS compliance costs and the associated impact on ratepayers (Stockmayer et al 2012;CPI 2012). For example, several states have developed rules precluding the cost of RPS compliance from exceeding 2-4% of retail electricity rates.…”

Section: Introductionmentioning

confidence: 99%

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Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards

Heeter¹,

Barbose²,

Bird³

et al. 2014

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More than half of U.S. states have renewable portfolio standards (RPS) in place and have collectively deployed approximately 46,000 MW of new renewable energy capacity through year-end 2012. Most of these policies have five or more years of implementation experience, enabling an assessment of their costs and benefits. Understanding RPS benefits and costs is essential for policymakers evaluating existing RPS policies, assessing the need for modifications, and considering new policies.This report surveys and summarizes existing state-level RPS cost and benefit estimates and examines the various methods used to calculate such estimates. The report relies largely upon data or results reported directly by electric utilities and state regulators. As such, the estimated costs and benefits itemized in this document do not result from the application of a standardized approach or the use of a consistent set of underlying assumptions. Because the reported values may differ from those derived through a more consistent analytical treatment, we do not provide an aggregate national estimate of RPS costs and benefits, nor do we attempt to quantify net RPS benefits at national or state levels. The report summarizes state-level RPS costs to date and considers how those costs may evolve going forward given scheduled increases in RPS targets and cost containment mechanisms incorporated into existing policies. The report also summarizes RPS benefits estimates, based on published studies for individual states, and discusses key methodological considerations. These estimates, for example, of the social value of carbon emissions reduction and the human health impacts of reduced air emissions, are based on a variety of methodologies and assumptions. In comparison to the summary of estimated RPS costs, the summary of RPS benefits is more limited, as relatively few states have undertaken detailed benefits estimates. Further, for those states that have estimated RPS benefits, most assess only a limited number of impact types; as a consequence, some types of benefits are not reflected in this report. RPS CostsOur analysis focuses specifically on the incremental cost of meeting RPS targets, i.e., the cost above and beyond what would have been incurred absent the RPS, over the 2010-2012 period. For states with restructured markets, we derive RPS compliance costs based on the cost of renewable energy certificates (RECs) and alternative compliance payments (ACPs). For traditionally regulated states, we instead rely upon RPS cost estimates reported directly by utilities or regulators within annual compliance reports or other regulatory filings (not prospective studies), and translate those estimates into a set of common metrics for comparison. The methods used by utilities and regulators to estimate incremental compliance costs vary considerably from state to state, in some cases reflecting statutory or regulatory requirements, and a number of states are currently engaged in processes to refine and standardize their approaches to RPS cost calcu...

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Section: Inclusion Of a Carbon Addermentioning

confidence: 99%

Section: Rps Cost Containment Mechanismsmentioning

confidence: 99%

See 1 more Smart Citation

Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards

Heeter¹,

Barbose²,

Bird³

et al. 2014

View full text Add to dashboard Cite

show abstract

“…In Colorado, Xcel Energy has a 2% cap on its RPS surcharge. The utility-which, not coincidentally, has far surpassed its RPS procurement targets-has been allowed to incur costs in excess of the surcharge amount and defer the balance forward for collection from ratepayers in later years (Stockmayer et al 2012). In Delaware, Delmarva Power & Light's RPS procurement costs for 2012 appear to have exceeded the 3% cost cap; however, the administrative rules for implementation of the cap are still under development, and it is therefore not yet practically enforceable.…”

Section: Figure 5 Rps Cost Caps Compared To Recent Historical Costsmentioning

confidence: 99%

“…More generally, cost containment under many of the above mechanisms may be imperfect to the extent that certain costs or benefits are not fully counted. For a broader discussion of the design and limitation of RPS cost-containment mechanisms, see Stockmayer et al (2012). Figure 5 translates, where possible, state cost-containment mechanisms into the equivalent maximum percentage increase in average retail rates for the year in which each state's RPS target reaches its peak.…”

Section: Cost-containment Mechanismsmentioning

confidence: 99%

Costs and benefits of renewables portfolio standards in the United States

Barbose

Bird

Heeter

et al. 2015

Renewable and Sustainable Energy Reviews

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As state-level renewable portfolio standards (RPS) have driven large increases in U.S. renewable generation capacity, states have sought to quantify the costs and benefits of these policies. This paper examines recent costs and benefits of RPS implementation, focusing on the net (or incremental) cost to utilities of renewables used for compliance with RPS targets during the years 2010-2012. Incremental RPS cost estimates are developed using a wide variety of methods and assumptions, which makes comparisons among states imperfect. For states with restructured electricity markets, we use a standardized method to calculate incremental costs based on renewable energy certificate prices, alternative compliance payment levels, and compliance obligations. For states with traditionally regulated electricity markets, we rely on estimates produced by utilities and regulators, whose methods and underlying assumptions vary widely. We find that recent estimated incremental RPS costs were equivalent to less than 2% of retail rates in 17 states and about 2%-4% in eight states, or -$4/MWh to $48/MWh of renewable energy required across all states (for the most recent year available in each state). Estimated RPS costs in most states were well below the respective cost caps, although a few states are currently operating at or near their cap.

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Innovative US energy policy: a review of states' policy experiences

Carley

Browne

2012

WIREs Energy & Environment

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Since the early 1990s, US energy policy has been driven by state governments. States have adopted a variety of innovative policy instruments to diversify, decarbonize, and decentralize their electricity markets. Because states are still active energy policy leaders, and are continually adopting new or revising existing policies, there is great need for continual evaluation of the effects, effectiveness, challenges, and opportunities associated with these different policy instruments. This analysis synthesizes the findings in the literature to date and provides a summary of both the policy landscapes and the effects associated with some of the leading energy policies, including the renewable portfolio standard, the energy efficiency resource standard, net metering, and interconnection standards. This article is categorized under: Energy Policy and Planning > Economics and Policy Energy and Development > Economics and Policy

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Limiting the costs of renewable portfolio standards: A review and critique of current methods

Cited by 19 publications

References 13 publications

Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards

Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards

Costs and benefits of renewables portfolio standards in the United States

Innovative US energy policy: a review of states' policy experiences

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