Social Costing of Electricity in Maryland: Implications for Electricity Supply,Energy Demand and Air Emissions

摘要

Many state public utility commissions (PUCs) have started to require electricutilities to consider environmental and other externalities in their utility planning and resource evaluation processes. The regulatory practice of requiring electric utilities to incorporate such external costs into electric utility decision making is referred to as social costing. To provide guidance on the state of Maryland in its consideration of social costing we analyze three different approaches to social costing and their impacts on utility and electricity consumer behavior. We find that applying social costing at the investment stage only may lead to reduced investment in new resources, increased use of existing generation resources and higher emissions of key pollutants. Applying social costing to dispatch to existing resources generally leads to increased levels of investment in clean technologies, lower levels of emissions and small to substantial price increases depending on the external cost adder values. Also, across most of the external costs considered, social costing of electricity has a small impact on demand for natural gas.