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Global Climate Change Digest
A Guide to Information on Greenhouse Gases and Ozone Depletion
Published July 1988 through June 1999

FROM VOLUME 5, NUMBER 10, OCTOBER 1992

NEWS...
EXTERNALITIES: GROWING CONCERN

Item #d92oct108

Public utilities in the U.S. are increasingly being forced to deal with the social impacts of producing electricity by state regulatory commissions. "Externalities" are social costs or benefits external to the direct costs of generating and distributing electricity. Emissions of CO₂ and other pollutants are major externalities (also called "adders" for added costs), and how and whether to account for the impacts of pollutants is being debated in several states. Recently proposed external values of CO₂ emissions range up to over $100 per ton, but there is no wide agreement on any value, or even how to determine one. Externality developments are changing so fast that the Electric Power Research Institute has recently established an Environmental Externalities Information Clearinghouse for its utility members. (Contact Marjorie McRae, Barakat & Chamberlin Inc., 180 Grand Ave., S. 1090, Oakland CA 94612; 510-893-7800).

In a series of articles in a section titled "Externalities Watch," 1992 issues of the news/analysis monthly Energy, Economics & Climate Change have discussed hearings and policy development on CO₂ externalities in the states of Washington, Massachusetts, Oregon and California. Recent administrative decisions in Virginia and Michigan, reported in the National Coal Association magazine Coal News (p. 9, July/Aug., 1992), hold that states may not consider environmental externalities in their bidding decisions or in approving new construction by utilities.