Externality Adders and Cost-effective Emissions Reductions: Using Tradeoff Analysis to Promote Environmental Improvement and Risk Mitigation

STEPHEN R. CONNORS an understanding of the cost and emissions impacts of those decisions. Director, The Electric Utility Program The Energy Laboratory MASSACHUSETTS INSTITUTE OF TECHNOLOGY Cambridge, MA 02139-4307 This paper will briefly review the regulatory motivations for incorporating environmental considerations into utility resource planning, explore the mismatch between the monetized adder approach and traditional integrated resource planning objectives, and finally show how rigorous application of existing IRP tools is more successful at achieving cost-effective emissions reductions given the vast uncertainty regarding the economic benefits of further reducing emissions. ABSTRACT