Student Voices Series: It’s time for Minnesotan utilities to see the bigger picture

The Minnesota Environmental Partnership is proud to feature the following post as part of a series of columns as part of a Student Voices Series issues. This is part of a continuing collaboration with Macalester College’s Geography Department and its students.

Actions have consequences. Take the example of an adolescent who sets off fireworks in his parent’s backyard. He is only concerned with his own pleasure, but consequentially the neighborhood must deal with the smoke that now floods the street and the risk of spreading fire. But he’s an adolescent, immature and incapable of seeing the greater consequences of his actions. It is his parent’s responsibility to hold him accountable and make him see the bigger picture.  Similarly, today it is the state’s responsibility to make Minnesotan utilities and their shareholders accountable for the social costs of carbon dioxide emissions. In the coming year there will be an opportunity to do just that by adopting the Environmental Protection Agency’s Social Cost of Carbon.

Every power plant generates an unseen cost by burning carbon intensive energy sources, like coal. But the cost is paid, not by the emitters, but in the health bills of children with asthma and in the farms whose crop yields suffer from additional droughts. In fact, according to a study done by two economists at the University of Minnesota, the impact of the green house gas emissions emitted by Minnesota’s runaway adolescents is approximately $1.287 billion damages. The Environmental Protection Agency put a dollar value to these damages at approximately $37 of future damages for each additional ton of emitted carbon dioxide. According to the EPA this measure “includes, but is not limited to, changes in net agricultural productivity, human health, and property damages from increased flood risk.” To put that in perspective, a ton is how much carbon dioxide is emitted from driving 2,381 miles in a passenger vehicle. Which may appear trivial, except the EPA’s data shows that in 2005 the average U.S coal powered plant emitted 4.6 billion tons of carbon dioxide. The Social Cost of carbon is used to quantify both the unseen impact of those emissions, and the net gain to society from reducing those emissions.

Now there is an opportunity, here in the state of Minnesota, to adopt the Social Cost of Carbon and use it to craft a socially responsible energy plan. As of September 4^th 2014 the Minnesota Public Utilities Commission (PUC) decided to bring the decision of whether or not to adopt the SCC before a judge in the Office of Administrative hearings. If the judge decides in the affirmative, and the commission confirms his decision, then energy utilities will be required to use the SCC in running “integrated resource plans.” These plans are use financial models geared towards minimize costs to consumers, costs that would now include the external damages from carbon dioxide. With a firmer externality value in place many utilities would be under pressure to close coal burning power plants and avoid opening future ones. Suddenly Minnesota’s adolescents are aware of the consequences, and act accordingly.

As the Social Cost of Carbon is argued before the administrative judge, the utilities and their shareholders will push, as they already have, for the value to be recalculated from scratch. A process, which both Minnesota’s Commerce and Pollution control agency said in a joint report “is not an efficient use of ratepayer funds […] when values developed by the federal government already exist.” For instance, Excel Energy argued that the SCC should be recalculated to ignore damages that occur outside of Minnesota. Which is akin to saying that our adolescent setting off fireworks should only worry about the damage to his parent’s house, and not the fire and smoke the neighbors will suffer. Even though this logic advises that neighboring states should not consider the damages that their emissions occur in Minnesota, when picking their emissions targets.

The utilities get to say their part in court, and so must the Minnesotan residents who will suffer the costs of climate change. As the scope of the trial is decided, Minnesotan ratepayers should remain poised for the time when we can send our public comments to the Judge, or the Public Utilities Commission. In doing so we can open our adolescents’ eyes and pave the way for a more accountable, Minnesota.