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WHEREAS, The National Association of Regulatory Utility Commissioners
(NARUC) Resolution on
Implications of Climate Policy for Ratepayers and Public Utilities (approved
July 18, 2007)
acknowledged the ongoing national debate over the desirability of limiting
the emission of carbon
dioxide and other greenhouse gases (GHG) and adopted certain policy
principles that NARUC believes
should be included in any federal legislation that attempts to regulate and
reduce the level of such
emissions; and
WHEREAS, Electric power generation is responsible for approximately 40
percent of U.S. emissions
of carbon dioxide, the most common GHG; and
WHEREAS, The United Nations Intergovernmental Panel on Climate Change has
concluded in its
Fourth Assessment Report that “most of the observed increase in globally
averaged temperatures since
the mid-20th century is very likely due to the observed increase in
anthropogenic greenhouse gas
concentrations;” and
WHEREAS, There is growing support for State, regional, and federal actions
to limit emissions of
carbon dioxide and other GHGs;
WHEREAS, The advocates of reducing the emission of carbon dioxide and other
GHGs believe that
the enactment of such legislation would provide substantial long-term
environmental benefits and that
a failure to address the impact of GHG emissions could, among other things,
adversely affect the
availability of water resources for hydroelectric generating facilities and
cooling water for use in
thermal generating facilities; and
WHEREAS, The advocates of reducing the emission of carbon dioxide and other
GHGs believe that
postponing action to reduce such emissions will increase the urgency of
reducing emissions at a later
time and increase the ultimate economic cost of actions taken to reduce such
emissions; and
WHEREAS, Many U.S. financial and corporate interests, including many
regulated utilities, have
acknowledged that the enactment of federal legislation limiting the emission
of carbon dioxide and
other GHGs appears inevitable; and
WHEREAS, A broad coalition of multinational corporate and environmental
leaders has formed the
U.S. Climate Action Partnership in order to work collaboratively to address
climate change issues; and
WHEREAS, Consistent with the States’ traditional role as "laboratories of
democracy," in which new
and innovative approaches for meeting societal needs are developed at the
State level, at least 18 States
have taken action intended to limit carbon dioxide and other GHG emissions;
and
WHEREAS, There is a substantial likelihood that federal legislation intended
to reduce emissions of
carbon dioxide and other GHGs (carbon regulation) will be enacted in the
near future; and
WHEREAS, Assuming that such federal legislation will be enacted, State
commissions should
consider taking action to reduce the economic impact of compliance with such
legislation; and
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WHEREAS, The cost of compliance with carbon regulation may affect consumers
differently
depending upon a State’s regulatory structure and the nature of the
decisions made by State regulators;
and
WHEREAS, The ultimate cost per ton of reducing carbon dioxide and other GHG
emissions may vary
dramatically depending on the State regulatory policy path chosen; and
WHEREAS, State utility regulators are well-positioned to evaluate
carbon-related risks related to
alternative resource options and to deliver economic benefits to their
States through adoption of
policies that appropriately account for and mitigate the risks arising from
the likelihood that federal
carbon regulation legislation will be enacted in the near future; now,
therefore, be it
RESOLVED, The National Association of Regulatory Utility Commissioners,
convened in its
November 2007 Annual Convention in Anaheim, California, advocates that
during the nation’s likely
transition to greater reliance upon lower-carbon resources for the
generation of electric power, State
regulators should consider adopting policy approaches and regulatory tools
that ensure continued
electric system reliability and minimize economic dislocation and costs to
consumers; and be it further
RESOLVED, That State regulators should consider seeking to appropriately
mitigate any risk of
stranded utility investment, future cost increases, and reliability
challenges resulting from the nation’s
likely transition to carbon regulation by requiring utilities to assess and
incorporate carbon-related
risks in their planning and decision making processes; and be it further
RESOLVED, That State regulators should consider addressing the nation’s
likely transition to carbon
regulation through consideration of policy and regulatory options, such as:
RESOLVED, That NARUC urges State regulators to work collaboratively with
State and local
govern ment entities, researchers and industries in considering the adoption
of policies that
appropriately promote cost-effective energy efficiency efforts and that give
proper consideration to the
benefits resulting from the use of cost-effective, low-or no-carbon
technologies.
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Sponsored by the Committee on Energy Resources and the Environment
Recommended by the NARUC Board of Directors, November 13, 2007
Adopted by the Committee of the Whole, November 14, 2007