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Publications

    Cullen, Joseph, and Erin Mansur. “Inferring Carbon Abatement Costs in Electricity Markets: A Revealed Preference Approach using the Shale Revolution.” In, 2016.Abstract
    cullen_mansur_gasprices.pdf
    This paper examines how carbon pricing would reduce emissions in the electricity sector. We show how both carbon prices and cheap natural gas reduce, in a nearly identical manner, the historic cost advantage of coal-fired power plants. The shale revolution has resulted in unprecedented variation in natural gas prices that we use to estimate the potential effect of a carbon price. Our estimates imply that a price of $20 ($70) per ton of carbon dioxide would reduce emissions by 5% (10%). Furthermore, carbon prices are much more effective at reducing emissions when natural gas prices are low. In contrast, modest carbon prices have negligible effects when gas prices are at levels seen prior to the shale revolution.
    Borenstein, Severin, James Bushnell, Frank Wolak, and Matthew Zaragoza-Watkins. “Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design." .” In Energy Institute at Haas. Berkeley University. 2016.Abstract
    wp274.pdf

    We study potential equilibria in California’s 2013-2020 cap-and- trade market for greenhouse gasses (GHGs) based on information available before the market started. We find large ex ante uncer- tainty in business-as-usual emissions, and in the abatement that might result from non-market policies, compared to the market- based variation that could plausibly result from changes in al- lowance prices within a politically acceptable range. This implies that the market price is very likely to be determined by an admin- istrative price floor or ceiling. Comparable analysis seems likely to reach similar conclusions in most cap-and-trade markets for GHGs, consistent with outcomes to date in such markets.

    and National Academies of Sciences, Engineering, Medicine. “The Power of Change: Innovation for Development and Deployment of Increasingly Clean Electric Power Technologies.” In, 2016.Abstract
    21712.pdf
    Electricity, supplied reliably and affordably, is foundational to the U.S. economy and is utterly indispensable to modern society. The National Academy of Engineering has called electrification the greatest engineering achievement of the 20th century (Constable and Somerville, 2003). Generating electricity also creates pollution, however, especially emissions of air pollutants. While the most severe and life-threatening pollution from electric power plants is largely a thing of the past in America, power plant emissions of particulates as well as oxides of nitrogen and sulfur (NOx and SOx) 1 still cause harms and contribute to increases in morbidity and mortality (Bell et al., 2008; Laden et al., 2006; Pope et al., 2009). Those harms include premature deaths, contributions to illnesses such as asthma, and increased hospitalizations, and electricity prices do not fully incorporate the costs of those harms (NRC, 2010b). Harms from greenhouse gas (GHG) emissions—to which the power sector is an important contributor, accounting for nearly 40 percent of all domestic emissions (EPA, 2016)— remain almost completely unpriced and thus above the level they would be if market prices reflected their full costs.
    “Staff White Paper on Guidance Principles for Clean Power Plan Modeling." Federal Energy Regulatory Commission, AD16-14-000, 2016."” In, 2016.Abstract
    ferc_docket_no_ad_16-14-000.pdf

    Executive summary

    On August 3, 2015, the U.S. Environmental Protection Agency (EPA) issued the Clean Power Plan (CPP) under Clean Air Act 111(d). The CPP limits carbon dioxide emissions from existing fossil fuel-fired electric power plants by providing state specific goals for carbon dioxide emissions from affected electric generating units. As part of the CPP, EPA considered the potential impacts of the CPP on electric system reliability. Specifically, the CPP requires each state to demonstrate in its final state plan submittal that it has considered reliability issues in developing its plan. Separately, on August 3, 2015, EPA, the U.S. Department of Energy (DOE) and the Commission agreed to coordinate certain activities to help ensure continued reliable electricity generation and transmission during the implementation of the CPP. 

    While the CPP assigns no direct role to the Commission, it is possible that the Commission may be called upon, through the EPA-DOE-FERC Coordination Document or for other reasons, to address concerns about reliability as the CPP is implemented. In that case, the use of appropriate modeling tools and techniques will be helpful to the Commission in carrying out its responsibilities for reliability.

     This white paper identifies four guiding principles that may assist transmission planning entities, which may include regional transmission organizations (RTOs), independent system operators (ISOs), electric utilities, or other interested stakeholders, in conducting effective analysis of the CPP and associated state plans, federal plans or multi-state plans (compliance plans). The North American Electric Reliability Corporation (NERC) and the regional electric reliability organizations may also benefit from following these guiding principles as they perform CPP-related analyses. These guiding principles address four areas: (1) transparency and stakeholder engagement; (2) study methodology and interactions between studies; (3) study inputs, sensitivities and probabilistic analysis; and (4) tools and techniques.

    Incorporating these guiding principles in the modeling of the CPP compliance plans is one way to promote a robust analysis of the reliability impacts of the CPP. The guiding principles discussed herein may form the basis for additional action by staff, such as industry outreach or technical conferences, or future action by the Commission.

    Kelly, John. “Dynamic Pricing.” In, 2016.Abstract
    p2._kelly.pdf
    Kelly, John. Dynamic Pricing." Presentation to the Harvard Electricity Policy Group's 83rd Plenary Session. Cambridge, MA, June 2, 2016."

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