Commissioner Marks discussion on Carbon Pricing Order

Last month, the PRC unanimously adopted an Order setting standardized prices for carbon dioxide emissions in electric utility resource planning, culminating a proceeding I initiated last fall. The prices that must be used for planning purposes are $8, $20, and $40, per ton of carbon dioxide emitted, beginning in 2010 and increasing by 2.5% per year. These three prices are to represent the impacts of low, medium, and high levels of carbon regulation. At 2.5% per year, even the medium price results in CO2 costs of over $40/ton during the life cycle of a typical generation resource, and using these prices indicate the cost risk of different utility generation portfolios in a “carbon constrained world.” I believe that this Order will provide the Commission with a powerful tool to direct development away from conventional coal-fired generation, which produces more greenhouse gases per megawatt-hour of electricity than other fuels and technologies. I would especially like to thank Chief Hearing Examiner Bill Herrmann, who brought in national experts for workshops and then managed to pull together utilities, environmentalists, and other affected parties to produce a carbon pricing recommendation that achieved consensus support. I would also like to thank Utility Division staff for their participation and support of the Commission’s energy policy agenda.

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