Analysis of Alternative Allocation Mechanisms for a U.S. Electricity Generating Company

The Situation

Congress has been considering a number of proposals to reduce emissions of NOX, SO2 and mercury, as well as CO2 from electric power facilities.

NERA's Role

NERA developed plant-level estimates of allocations to the facilities of all U.S.-generating facilities for a major U.S. electric power company to determine the effects of alternative allocation mechanisms on the allocation received by the generator. In conjunction with this analysis, NERA prepared materials for presentations at Congressional hearings on the effects of alternative allocations. The project included a quantitative assessment of the financial incentives created by emissions trading to invest in new renewable plant.

The Result

The generating company used the materials developed to support a presentation to Congress of its assessment of the various proposals being considered.