DPS Staff increases social cost of carbon VDER Environmental Value calculation from $27.41 per MWh to $31.03 per MWh
On April 21, 2021, Department of Public Service (DPS) Staff filed a Value of Distributed Energy Resources (VDER) Environmental Value Update with the Public Service Commission (PSC) in Case 15-E-0751. The Environmental Value, which is one of the revenue streams of the VDER Value Stack, is the higher of either the REC price of the most recent New York State Energy Research and Development Authority Tier 1 solicitation or the social cost of carbon (SCC), and is fixed for the duration of a project’s 25-year Value Stack tariff. DPS Staff reran its 2018 SCC calculation with a higher carbon emission price, increasing the value of the SCC, net of Regional Greenhouse Gas Initiative allowance values, from $27.41 per MWh to $31.03 per MWh. The SCC is currently higher than the most recent Tier 1 procurement REC price. VDER projects that make their initial 25% interconnection down payment on or after April 21 will receive the newly-increased environmental value. DPS Staff’s calculations are available here.
DPS Staff used the same Environmental Value calculation methodology that it used in its 2018 calculation, which does not require separate PSC approval. The update was not in response to the Guidelines for Use by State Agencies that the Department of Environmental Conservation (DEC) created (discussed in Flash Update 21-1), which provided a range of potential carbon emission valuations for other State agencies to use in their decision-making processes. DEC recommended valuing carbon emission reductions at $125/ton CO2.