Transcript Sorting Out the Effects of INFRASTRUCTURE Projects

Economic Impacts of RGGI under the
Proposed SWG Package Scenarios
Presented by
Lisa Petraglia & Dwayne Breger (MA DOER)
2 Oliver Street, 9th Floor, Boston, MA 02109
September 21, 2005
1
Status and Preliminary Findings
• The REMI analysis now reflects the new Reference Case
and Energy Efficiency measures in the proposed Package.
• The results are complete for the SWG proposed Package
Scenario.
• Projected changes to retail prices are small in the Package
Scenario and modest under the High Emissions case.
• RGGI has small positive impacts on the economy of the
region – those impacts are small, generally within twohundredths of 1% change in economic indicators.
2
Overview of Presentation
• Results for SWG Proposed Package Scenario
Stabilization through 2015, 10% reduction by 2020
Offsets and EE Measures
• Retail Price Impacts (conversion of IPM wholesale price changes)
• Integration of EE Investments, Costs, and Savings into REMI
• Economic Impact Results
Stated as difference between how the economy performs in a
given year in a reference scenario and a policy (RGGI) scenario.
Performance is gauged by changes in:
• Gross State (or Regional) Product (GSP or GRP)
• Employment
• Personal Income
3
Retail Price Impact Analysis
IPM Wholesale (Firm Power) Prices were converted to Retail prices for
Residential, Commercial, and Industrial customer classes
Conversion considers historical relationship between wholesale and retail
costs to determine retail price adder.
Sources: EIA and NEPOOL, NYISO, PJM Annual Market Reports
Retail price change is used to determine impact on annual bill of typical
household.
For the REMI analysis, wholesale to retail conversion maintains use of
EIA/NEMS forecasts.
REMI needs consistent method and inclusion of national price trends.
Relative prices are key to REMI impacts.
4
Impact on Retail Electricity Rates
Increase (%) in Retail Rates due to SWG Proposed Package Scenario
(after conversion of IPM wholesale rate impact)
Residential
Commercial
Industrial
2015
2021
2015
2021
2015
2021
MA
0.0%
0.4%
0.0%
0.5%
0.0%
0.6%
CT
0.0%
0.4%
0.0%
0.4%
0.0%
0.6%
ME
0.1%
0.3%
0.1%
0.4%
0.1%
0.5%
NH
0.0%
0.3%
0.0%
0.3%
0.0%
0.4%
RI
0.0%
0.3%
0.0%
0.3%
0.0%
0.4%
VT
-0.1%
0.3%
-0.1%
0.3%
-0.1%
0.5%
NY
0.2%
0.4%
0.2%
0.4%
0.4%
0.9%
DE
0.3%
0.5%
0.4%
0.7%
0.5%
0.9%
NJ
0.3%
0.3%
0.3%
0.4%
0.4%
0.4%
5
Impact on Retail Electricity Rates
Increase (%) in Retail Rates due to SWG Proposed Package Scenario
under High Emissions Case
(after conversion of IPM wholesale rate impact)
Residential
Commercial
Industrial
2015
2021
2015
2021
2015
2021
MA
1.2%
1.5%
1.3%
1.7%
1.5%
1.9%
CT
3.3%
3.9%
3.8%
4.5%
4.7%
5.6%
ME
2.2%
4.5%
2.5%
5.2%
3.3%
6.9%
NH
1.3%
1.6%
1.5%
1.9%
1.7%
2.2%
RI
1.4%
1.9%
1.7%
2.2%
1.8%
2.4%
VT
1.1%
1.6%
1.3%
1.8%
1.8%
2.6%
NY
2.2%
1.7%
2.4%
1.8%
5.3%
4.1%
DE
0.9%
0.7%
1.2%
0.8%
1.7%
1.2%
NJ
0.5%
4.1%
0.6%
4.7%
0.7%
5.4%
6
Impact on Typical Household Bills
Results for SWG Proposed Package Scenario
Cost per Household of Retail
Electricity Price Impact, $/year
2015
2021
Massachusetts
$0.21
$4.16
Connecticut
$0.29
$4.16
Maine
$0.65
$2.74
New Hampshire
$0.08
$2.77
Rhode Island
$0.00
$2.49
Vermont
-$0.58
$3.09
New York
$1.59
$3.54
Delaware
$3.15
$5.51
New Jersey
$2.66
$3.28
Based on annual average HH electricity bills for 2004-2005 from EIA Electric Power Monthly.
7
Impact on Typical Household Bills
Results for SWG Proposed Package Scenario
under High Emissions Case
Cost per Household of Retail
Electricity Price Impact, $/year
2015
2021
Massachusetts
$10.99
$14.20
Connecticut
$36.22
$42.86
Maine
$18.07
$36.89
New Hampshire
$12.10
$15.43
Rhode Island
$12.47
$16.19
Vermont
$11.46
$16.54
New York
$21.79
$16.63
Delaware
$9.87
$7.03
New Jersey
$5.00
$39.65
Based on annual average HH electricity bills for 2004-2005 from EIA Electric Power Monthly.
8
Integration of Energy Efficiency in REMI
EE investment spending stimulates industry sectors
Costs of making EE investments
End-users’ costs
Public (SBC) costs
EE impacts end-users’ energy spending (bill impact)
9
EE Investment Spending – Industry Stimulus
IPM provides EE expenditures by end-users and public programs.
End-User expenditures – 100% allocated to EE measures and NAICS
Public Program expenditures – 60% allocated to EE measures and NAICS,
36% to administrative activities, 4% private profits.
EE Investments allocated by IPM to Res/Comm/Ind customer classes.
Investments by each class are allocated to EE measures (e.g. lighting,
appliance, motors, etc.)
Each measure is mapped to NAICS industry sector
10
EE Investment – Allocation of Costs
IPM provides EE expenditures by end-users and public programs.
Out-of-pocket investment expenditures by end-users and public SBC are
allocated as costs to businesses and households.
RGGI program may provide public EE program funds through public
allocation set-aside.
Redirecting cost from SBC to RGGI public benefit program will reduce
costs to businesses and households, improving impacts of current
analysis.
Analysis considers full public cost borne through SBC charge.
11
EE Investment – End-User Bill Impacts
IPM provides output for EE GWh savings for Res/Comm/Ind classes.
Each customer class’ expenditures are reduced by MWh savings times
retail price.
EE measures are considered to have a lifetime of 14 years.
12
Macro Economic Impacts of SWG Package Proposal
Summary of Results
The combined effect of the Package Scenario energy price increases and
capacity investment leads to small negative economic impacts - generally
below two-hundredths of 1% for GRP, Personal Income, and
Employment.
The inclusion of the energy efficiency component to the Package Scenario
creates overall positive economic impacts across the Total RGGI region on the order of two- to three-hundredths of 1% for GRP, Personal Income,
and Employment.
Modeling did not include the economic benefits associated with the
investments in offsets.
13
Summary of Regional Economic Impacts (%)
REMI Results for
SWG Proposed Package Scenario
2009
2015
2021
Full Package
0.01%
0.02%
0.02%
without EE Stimuli
0.00%
-0.01%
-0.03%
Full Package
0.00%
0.02%
0.03%
without EE Stimuli
0.00%
-0.01%
-0.03%
Full Package
0.01%
0.02%
0.02%
without EE Stimuli
0.00%
-0.01%
-0.02%
Total GRP
Real Per Income
Priv Sec Jobs
Regional impacts are relative to Reference Run
14