Minnesota PUC establishes cost range for CO2 regulatory cost evaluations
Through a new order this week, the Minnesota Public Utilities Commission established a cost range for evaluating how CO2 regulatory costs will impact utility electrical generation investments.
In this instance, regulatory costs mean what utilities are expected to pay by complying with future CO2 emissions regulations. The Commission has established this range between $5 and $25 per ton of CO2, effective as of 2025. That same year, the environmental cost value for CO2 will range between $10.07 and $46.96 per net short ton.
This new order will help utilities decipher the regulatory and environmental costs associated with emissions while deciding whether to invest in new electrical generation assets.
“This decision clarifies how utilities should analyze the costs of CO2 emissions when determining whether a specific generation asset is a prudent investment,” Commissioner Joe Sullivan said. “This analysis will give the Commission a more complete picture to look at when determining if building a new generation facility is going to be cost-effective for ratepayers.”
The order goes further, establishing how utilities should analyze regulatory costs alongside greenhouse gases’ environmental costs. It lays out a minimum set of scenarios that utilities need to analyze in determining those costs.
As part of the analysis going forward, the Commission will factor in an estimate of the range of costs that future CO2 limitations will probably impose on electrical power generation. It will update and revise its estimate periodically.
