How marginal cost pricing impacts rates

In several recent filings before the Minnesota Public Utilities Commission, Minnesota’s rate-regulated electric and gas utilities have requested changes to the rates they charge customers to recover costs of providing service. Through these and other proceedings, rate design has become a primary focus of utility policy due to its impact on how customers use and pay for the energy they receive. Fresh Energy has provided analysis, testimony, and recommendations in these proceedings to ensure rates encourage energy efficiency and allow fair compensation for onsite generation like solar.

Nation-leading news: Judge recommends Minnesota use federal “social cost of carbon”

A huge win for Minnesota on April 15 – a judge, after over a year of expert testimony, legal briefs, and public hearings, recommended to the Minnesota Public Utilities Commission (PUC) that it adopt the federal “social cost of carbon” as the binding external cost of carbon dioxide emissions for all electric utility decision making. That means that the PUC (and the utilities that need the PUC to approve their spending plans) will have to include those very negative external costs in their calculations. As a result, fossil forms of electricity generation will be much more difficult to justify on economic terms.