Benefit Cost Analysis (BCA) - February 18, 2021 John Ciovacco President Aztech Geothermal, LLC (518) 309-2000 - New ...
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Benefit Cost Analysis (BCA)
February 18, 2021 John Ciovacco
President
Board Member Aztech Geothermal, LLC
New York Geothermal Energy Organization (NY-GEO) (518) 309-2000
ny-geo.org jciovacco@aztechgeo.com
That’s me!
4 Tracks
32 Workshops
Marriott Albany
March 23 & 24, 2022 Presented by:
NY-GEO 2022 – Electrify with Heat Pumps! www.aztechgeo.com
www.ny-geo.org
Starts with an Order from the PSC Benefit Cost Analysis (BCA) John P. Ciovacco
BCA Handbooks Each utility puts out their version: Benefit Cost Analysis (BCA) John P. Ciovacco
Purpose of a BCA Handbook
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. Ciovacco
Acronyms & Abbreviations - BCA Handbook
Source: National Grid BCA
Benefit Cost Analysis (BCA) Handbook, Version 3.0 June 2020 John P. Ciovacco
BCA Handbook Structure
Section 1. Introduction
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. Ciovacco
ASSUMPTIONS - BCA Tests
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. Ciovacco
General Methodological Conditions
2.1 Avoiding Double Counting
2.2 Incorporating Losses into Benefits
2.3 Establishing Credible Baselines:
• Forecasting Market Conditions
• Forecasting Operational Conditions
• Predicting Asset Management Activities
• Normalizing Baseline Results
2.4 Establishing Appropriate Analysis Time Horizons
2.5 Granularity of Data for Analysis
2.6 Performing Sensitivity Analysis
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. Ciovacco
Benefit Cost Analysis – (BCA) Tests
It is important to note, however, that
if a measure passes the SCT but its
results do not satisfy the UCT and
RIM tests, the measure would not be
rejected unless a complete bill
impact analysis determines that
the such impact is of a “magnitude
that is unacceptable”.28
28 DPS BCA Order, pg. 13
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. CiovaccoSource: National Grid BCA BENEFITS - BCA Tests Handbook, Version 3.0 June 2020 Benefit Cost Analysis (BCA) John P. Ciovacco
COSTS - BCA Tests
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. CiovaccoCOSTS - BCA Tests
Source: National Grid BCA
Handbook, Version 3.0 June 2020
Benefit Cost Analysis (BCA) John P. Ciovacco(Add your name, title here)
Empowering Communities
Ex: Brooke Havlik, to Power Change
Director of Communications
Sonal Jessel, MPH, Director of PolicyWhat is
Environmental Justice?
• The ability of all people to live, work, play,
worship, and learn in a safe and healthy
environment.
• The US EPA defines EJ as the “fair treatment and
meaningful involvement of all people regardless of race,
color, national origin, or income with respect to the
development, implementation, and enforcement of
environmental laws, regulations, and policies… It will be
achieved when everyone enjoys the same degree of
protection from environmental and health hazards and
equal access to the decision-making process to have a
healthy environment in which to live, learn, and work.”Health and the BCA
• Direct health care costs
• Common estimates only include
hospital admission and
emergency room visits
• A recent study found including
other healthcare uses can
Air pollution increase cost by as much as 40%
• Contribution to pre-existing chronic
illness
• Costs across the lifespan
• Educational impact
• Employment impact• Poor quality housing or
Indoor Air inadequate housing
maintenance
Quality • Mold & pests
• Energy insecurity- health
impacts of coping mechanisms
• Social and behavioral impacts
• Hardship tradeoffs• Hazardous site placement Cumulative Impacts
Con Edison Substation/Subestación Con Kingbridge Bus Depot/ 207th Street Train Yards/ Depósitos
Edison Depósitos de autobuses de trenes
George Washington Port Authority Bus Terminal/ 215th Street Department of Sanitation Truck Parking Lot/
Terminal de autobuses de la autoridad de puertos Estacionamiento de camiones del Departamento de Sanidad Pública• Hazardous site placement
Cumulative • Cumulative hardships
Impacts • Extreme Weather Events
• Who is hit first and worst?What if a benefit or a cost it isn’t quantifiable?
Sonal Jessel, MPH Director of Policy sonal@weact.org
BC-Cray How Obscure Guidelines Could be the Key to New York’s Climate Future New Yorkers for Clean Power February 18, 2021
Sealed focused on
increasing home deep I am usually skeptical of such
things as a win-win but this is
decarbonization clearly one of them! …Your home
increases in value… you are just
Sealed is a home wellness company on a mission to
more comfortable …and it helps
modernize every home to be healthier, more comfortable,
the utility company by reducing
and cleaner for the planet
the demand of outdated homes.
Sealed transforms home heating and cooling to deliver
clean air and comfort with less energy. Sealed covers the Rick C.
Pelham, NY.
upfront costs of professional upgrades like HVAC and
insulation, and only gets paid if your house saves energy.
2Good News: NY is at the forefront of
intelligent gas planning processes
• Recent proposal from the NY Department of Public Service (“DPS”) proposes a new way of
thinking about utility gas planning
• Proposal ensures that “no infrastructure” solutions (efficiency, electrification, etc.) are always
evaluated before utilities make any major new gas infrastructure investments
• Gas infrastructure evaluations will (start to) take into account the CLCPA by assuming that
fossil fuel will be phased out by 2050
Source: NY DPS, Staff Gas System Planning Process Proposal, February 12, 2021 3Bad News: The current NY BCA stacks the
deck against deep decarbonization solutions
“Traditional” Infrastructure Non-Pipeline Alternatives (“NPAs”)
• Centralized • Distributed
• More fossil fuel usage • (Much) less fossil fuel usage
• Ratepayers cover 100% of the costs • Ratepayers and private capital share costs
Cost Breakdown
100%
BCA treats ratepayer
costs and private capital 75%
costs as the same in
defining official “Costs” 50%
25%
Private Capital
Ratepayer Costs 0% 4
Traditional NPADetails Matter!
5It turns out deep decarbonization is expensive
and we need lots of private capital!
Current Benefit-Cost Analysis Framework (Illustrative)
$100
$75
We can’t decarbonize at
scale if we are literally
penalizing the use of
private capital! $50
$25
Private Capital
Program Costs
Avoided Carbon Emissions
Avoided Utility & Enegy Costs 6
$0
Benefits CostsThe answer is simple: remove participant
costs and add health and other benefits
Future Benefit-Cost Analysis Framework (Illustrative)
$140
$105
The only downside is we
make a few economists
frustrated!
$70
$35
Health Benefits
Private Capital
Program Costs
Avoided Carbon Emissions
Avoided Utility Costs
7
$0
Benefits CostsWe need to do the simple things first in order
to do the hard things (soon)
8Thank you!
Place portrait here
Andy Frank 347 - 609 3508
Founder and President andy.frank@sealed.com
9COST BENEFIT ANALYSIS
Alliance for a Green Economy (AGREE) works for safe, affordable energy and the development of a green economy in New York State. AGREE promotes a carbon- free and nuclear-free future and educates the public about alternatives that can revitalize the economy and safeguard human health and the environment. www.agreenewyork.org
BENEFIT COST
ANALYSIS IS A
DECISION-MAKING
TOOL
roadloans.comTHE BCA INHERENTLY POLITICAL
What do we value?
Who do we value?
CELIWE CANNOT AFFORD TO IGNORE THIS
Who should determine what
is valued?
Decisions are being made:
Utility Non-Pipe Alternatives
Gas Planning Proceeding
Energy Efficiency Programs
webnodetinyurl.com/bcacomment
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