Carbon Pricing in New York ISO Markets: Federal and State Issues

New York’s Clean Energy Standard (“CES”), adopted in August 2016, aims to steer the state’s electricity sector away from carbon-intensive generation sources. It supports low-carbon alternatives by requiring retail electricity suppliers to purchase credits, the proceeds from which are paid to renewable and nuclear generators. Recognizing that this will affect the operation of wholesale electricity markets, New York’s electric transmission grid operator (the “New York Independent System Operator” or “NYISO”) has commenced a review to assess possible means of incorporating the cost of carbon emissions into market prices. This Article explores two approaches to carbon pricing in NYISO markets: the first would involve NYISO adopting a carbon price of its own initiative with a view to improving the operation of wholesale electricity markets (“Approach 1”), while the second would involve adoption of a carbon price designed to reflect and harmonize state-level policies aimed at reducing electricity sector emissions (“Approach 2”). Under either approach, NYISO would adopt a per megawatt hour carbon price and use it to establish a fee for each generating unit, consistent with its emissions profile. This fee would be added to the prices generators bid into the wholesale electricity market and those adjusted prices used by NYISO to determine the dispatch order. The result would likely be a re-ordering of dispatch, with high-emitting generators dispatched (and paid) less frequently, and cleaner alternatives more frequently. Our proposal, while conceptually simple, is likely to be difficult to implement

Microgrids and Resilience to Climate-Driven Impacts on Public Health

“Resilience” has burst into the lexicons of several policy areas in recent years, owing in no small part to climate change’s amplification of extreme events that severely disrupt the operation of natural, social, and engineered systems. Fostering resilience means anticipating severe disruptions and planning, investing, and designing so that such disruptions, which are certain to occur, are made shallower in depth and shorter in duration. Thus a resilient system or community can continue functioning despite disruptive events, return more swiftly to routine function following disruption, and incorporate new information so as to improve operations in extremis and speed future restorations. As different policy communities apply the concept of resilience to their respective missions, they emphasize different objectives. This article examines how the definitions adopted by the public health and electricity communities can, but do not necessarily, converge in responses to electricity outages so severe that they affect the operation of critical infrastructure, such as wastewater treatment and drinking water facilities, hospitals, and cooling centers. Currently, such outages cause a form of handoff from utilities to their customers: grid power fails and a small constellation of backup generators maintained by atomized campuses, facilities, or individual structures switch on, or fail to switch on, or were never purchased and so leave the location dark and its equipment inoperative. This handoff is operational, but it reflects legal obligations – and their limits. Enter the microgrid, a specially designed segment of the electricity distribution grid’s mesh that can either operate seamlessly as part of the wider grid, or as an independent “island” that serves some or all of the electricity users within its boundary even when the wider grid fails. Microgrids can, but do not necessarily, mitigate the adverse public health implications of the handoff that accompanies widespread and severe grid failure. To encourage the convergence of public health and electricity policy priorities in decisions about microgrid siting, design, and operation, this article makes several recommendations. Some of these should ideally be taken up at the federal level, but the bulk of the work they recommend should take place at the state-level, and would necessarily be implemented at the state and local levels

Microgrids and Resilience to Climate-Driven Impacts on Public Health

“Resilience” has burst into the lexicons of several policy areas in recent years, owing in no small part to climate change’s amplification of extreme events that severely disrupt the operation of natural, social, and engineered systems. Fostering resilience means anticipating severe disruptions and planning, investing, and designing so that such disruptions, which are certain to occur, are made shallower in depth and shorter in duration. Thus a resilient system or community can continue functioning despite disruptive events, return more swiftly to routine function following disruption, and incorporate new information so as to improve operations in extremis and speed future restorations. As different policy communities apply the concept of resilience to their respective missions, they emphasize different objectives. This article examines how the definitions adopted by the public health and electricity communities can, but do not necessarily, converge in responses to electricity outages so severe that they affect the operation of critical infrastructure, such as wastewater treatment and drinking water facilities, hospitals, and cooling centers. Currently, such outages cause a form of handoff from utilities to their customers: grid power fails and a small constellation of backup generators maintained by atomized campuses, facilities, or individual structures switch on, or fail to switch on, or were never purchased and so leave the location dark and its equipment inoperative. This handoff is operational, but it reflects legal obligations—and their limits. Enter the microgrid, a specially designed segment of the electricity distribution grid’s mesh that can either operate seamlessly as part of the wider grid, or as an independent “island” that serves some or all of the electricity users within its boundary even when the wider grid fails. Microgrids can, but do not necessarily, mitigate the adverse public health implications of the handoff that accompanies widespread and severe grid failure. To encourage the convergence of public health and electricity policy priorities in decisions about microgrid siting, design, and operation, this article makes several recommendations. Some of these should ideally be taken up at the federal level, but the bulk of the work they recommend should take place at the state-level, and would necessarily be implemented at the state and local levels

To Negotiate a Carbon Tax: A Rough Map of Policy Interactions, Tradeoffs, and Risks

Sooner or later, the federal government will assign a price to carbon dioxide emissions via legislation. The contents of that legislation will reflect negotiated agreement—built on various political tradeoffs—over a host of policy issues, ranging from taxes to energy efficiency standards. These tradeoffs would implicate not only the scope and price assigned by the carbon pricing policy, but also the policies with which it would interact. This paper anticipates that price will take the form of a carbon tax and describes interactions between that tax and various existing and proposed policies relating to climate change, energy, and environmental protection. Specifically, it proposes a typology for those interactions and applies it to characterize particular policies. It also notes how trading off particular policies for a more robust carbon tax could undermine the climate change mitigation goal of such a tax

How Much Does the Existing Regulatory Patchwork Reduce U.S. Greenhouse Gas Emissions?

This paper offers an answer to the question, “What levels of greenhouse gas (“GHG”) emissions reduction do the constituent programs in the U.S.’s existing regulatory patchwork achieve?” Its answer represents an attempt to measure the same effect from eight regulatory interventions: EPA’s Prevention of Significant Deterioration program, as it is expected to operate following the Supreme Court’s UARG v. EPA decision in 2014; EPA’s Clean Power Plan; EPA’s renewable fuel standard; the federal Corporate Average Fuel Economy standards for light, medium, and heavy duty vehicles; the renewable electricity generation Production Tax Credit and Investment Tax Credit; the Regional Greenhouse Gas Initiative, which encompasses 9 states in the mid-Atlantic and Northeast; California’s Global Warming Solutions Act of 2006, Assembly Bill 32; and state renewable portfolio standards. Notably, though it seeks to measure the same effect of diverse policies, this paper does not purport to measure the aggregated net effects of those policies on GHG emissions. Most important among its conclusions are the following. First, federal CAFE standards, the Clean Power Plan, and state renewable portfolio standards will be crucial for achieving emissions reduction goals. Second, the reductions available from the renewable fuel standard are uncertain and highly contentious. And third—an important subtext—the effectiveness (and costeffectiveness) of this patchwork of programs is unwieldy even to measure, much less to ensure

Legal Tools For Climate Adaptation Advocacy: The Electric Grid and Its Regulators – FERC and State Public Utility Commissions

The electric grid connects electricity generators to consumers. State and federal regulators are tasked with ensuring that consumers have access to safe and reliable electricity at just and reasonable rates. The requirements of this task have and will continue to transform as technologies change and as the impacts of climate change alter the context in which the electric grid operates. Thus, regulators who make adapting to climate change a priority will better fulfill their mandate to ensure that utilities provide consumers with safe and reliable electricity at just and reasonable rates. Yet some regulators do not recognize how closely adaptation aligns with their basic mandate. This chapter is written for advocates seeking a more thorough integration of adaptation considerations into regulation of the electric grid. Part 1 describes the grid, its regulators, and their functions. Part 2 highlights impacts of climate change that are expected to impair grid operations: increased temperatures and heat waves, changes in precipitation, storms, and sea-level rise. Part 3 discusses substantive proposals to adapt to climate change impacts. Part 4 summarizes the basic regulatory proceedings and identifies opportunities for an advocate to present evidence and arguments during such proceedings

Research Governance

Forthcoming in Climate Engineering and the Law: Regulation and Liability for Solar Radiation Management and Carbon Dioxide Removal (Michael B. Gerrard & Tracy Hester, eds.), this chapter approaches the complex topic of climate engineering research governance in four Parts. Part I describes the forms research has taken so far and those that are expected in the future. It also offers short summaries of five instances of climate engineering field research conducted since 2009. Part II considers the key issues and concerns that have prompted calls for governance and that have inspired sometimes heated debate of what it should involve. Part III discusses governance directly, including its goals and functions, as well as issues arising from implementation. This Part also surveys the institutional landscape and classifies bodies with potential jurisdiction into three groups: those that are currently serviceable for the governance of research into particular climate engineering technologies, those that seem capable of adapting to the task, and those that will need to be created anew in order to fill critical gaps. Part IV concludes

The Status of Climate Change Litigation: A Global Review

Over the last decade, laws codifying national and international responses to climate change have grown in number, specificity, and importance. As these laws have recognized new rights and created new duties, litigation seeking to challenge either their facial validity or their particular application has followed. So too has litigation aimed at pressing legislators and policymakers to be more ambitious and thorough in their approaches to climate change. In addition, litigation seeking to fill the gaps left by legislative and regulatory inaction has also continued. As a result, courts are adjudicating a growing number of disputes over actions—or inaction—related to climate change mitigation and adaptation efforts

Carbon Pricing in New York ISO Markets: Federal and State Issues

Does the law permit the New York Independent Service Operator (NYISO) to incorporate, directly or indirectly, a carbon price into New York State’s wholesale electricity market? And, if so, what is the appropriate design of a carbon pricing scheme for the NYISO market? For example, at what level should a carbon price be set and when/how should it be adjusted? How should the revenues generated by such a price be used? What impact (if any) will it have on the Regional Greenhouse Gas Initiative (RGGI) and New York’s Clean Energy Standard? This working paper explores answers to those questions with due consideration for two contextual frames. The first is federal law, specifically the Federal Power Act, as interpreted by the Federal Energy Regulatory Commission (FERC) and the courts The second is New York’s energy marketplace, meaning both the physical and economic arrangement of generation and transmission resources vis-à-vis load centers, and the state’s ongoing efforts to reconfigure and decarbonize its portion of the electric grid by encouraging greater uses of information technology, energy efficiency, and distributed energy resources. Importantly, features of this second frame are both flexible and responsive to steps NYISO might take — as the New York Public Service Commission said in its Order adopting the Clean Energy Standard in August 2016, “the Zero Emissions Credit mechanism [established as part of the Clean Energy Standard] shall be such that it can be modified or eliminated by the Commission if there is a national, NYISO, or other program instituted that pays for or internalizes the value of the zero-emissions attributes.” This paper is especially timely because NYISO’s Integrating Public Policy Project (IPPP) has begun to “investigate potential market impacts from the implementation of the New York Clean Energy Standard, and determine whether other wholesale products or alternatives for incorporating the cost of carbon into the wholesale market could improve market efficiency and address potential market impacts.” By exploring legal constraints and options, the authors intend to help inform that investigation’s progress

Carbon Pricing in New York ISO Markets: Federal and State Issues

Does the law permit the New York Independent Service Operator (NYISO) to incorporate, directly or indirectly, a carbon price into New York State’s wholesale electricity market? And, if so, what is the appropriate design of a carbon pricing scheme for the NYISO market? For example, at what level should a carbon price be set and when/how should it be adjusted? How should the revenues generated by such a price be used? What impact (if any) will it have on the Regional Greenhouse Gas Initiative (RGGI) and New York’s Clean Energy Standard? This working paper explores answers to those questions with due consideration for two contextual frames. The first is federal law, specifically the Federal Power Act, as interpreted by the Federal Energy Regulatory Commission (FERC) and the courts The second is New York’s energy marketplace, meaning both the physical and economic arrangement of generation and transmission resources vis-à-vis load centers, and the state’s ongoing efforts to reconfigure and decarbonize its portion of the electric grid by encouraging greater uses of information technology, energy efficiency, and distributed energy resources. Importantly, features of this second frame are both flexible and responsive to steps NYISO might take — as the New York Public Service Commission said in its Order adopting the Clean Energy Standard in August 2016, “the Zero Emissions Credit mechanism [established as part of the Clean Energy Standard] shall be such that it can be modified or eliminated by the Commission if there is a national, NYISO, or other program instituted that pays for or internalizes the value of the zero-emissions attributes.” This paper is especially timely because NYISO’s Integrating Public Policy Project (IPPP) has begun to “investigate potential market impacts from the implementation of the New York Clean Energy Standard, and determine whether other wholesale products or alternatives for incorporating the cost of carbon into the wholesale market could improve market efficiency and address potential market impacts.” By exploring legal constraints and options, the authors intend to help inform that investigation’s progress