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January 20, 2016
Associate Michael Hagerty Examines CPP Implications for the Western Interconnect at EUCI Conference on Carbon Market Mechanisms

Brattle Associate Michael Hagerty presented on the Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) and its implications for the western interconnect at a recent EUCI conference, “Optimizing Carbon Market Mechanisms in the Western Interconnect,” taking place on January 20-21, 2016 in Los Angeles, CA.

Mr. Hagerty’s panel session discussed potential outcomes of the CPP in the western interconnect, focusing on states outside of California, and modeled how these states might choose from a range of compliance options to achieve the required carbon reductions economically, efficiently, and in alignment with their neighbors. His presentation illustrated the CPP implementation decisions that lie ahead for states, interactions between the CPP and California’s cap and trade program, and the potential outcomes for achieving these targets in the western interconnection. He concluded that there are several key implications facing the region, including that the potential development of several carbon markets in the western interconnect could lead to distortions in dispatch costs between similar technologies. In addition, de-carbonization – including coal plant retirements and renewables integration – will likely alter generation capacity; and a wide range of future scenarios and benefits will need to be considered for long-term transmission planning to accommodate these changes.

The EUCI conference also examined several existing and future carbon reduction requirements in the U.S., which will lead to increased collaboration and cross-border power swapping among utilities and merchant power and transmission operators within the western North America energy market as they understand and plan for these new mandates.

Mr. Hagerty’s presentation can be downloaded using the link below. For more information on the conference, please visit EUCI’s website.