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November 13, 2019
Framework Proposed by Brattle and EPRI Provides a Regulatory Standard for Evaluating the Cost-Effectiveness of Electrification Programs

Electric utilities and energy regulators can take a proactive role in facilitating the transition to an electrified and decarbonized economy. Brattle Principals Ryan Hledik, Ahmad Faruqui, Jürgen Weiss; Senior Associate Michael Hagerty; and Associate Long Lam have discussed how a new approach can help, in a recent American Bar Association (ABA) Environment, Energy & Resources Section article.

Over the past several years, utilities and regulators have set ambitious carbon-reduction goals for the coming decades. To accomplish this, a key next step will be the electrification of demand across sectors such as transportation and heating. However, one challenge for engagement in electrification programs is the lack of regulatory standards and frameworks for analyzing their cost-effectiveness.

To address this, Brattle and the Electric Power Research Institute (EPRI) have proposed a new approach: the Total Value Test (TVT). The TVT takes the broadest possible perspective on the costs and benefits of electrification programs, weighing environmental impacts and non-energy benefits against similarly important changes in energy resource costs and other benefits. The article shares case studies where the TVT has been applied to measure the cost-effectiveness of city bus electrification, indoor agriculture, and electric water heaters.

Read the full ABA article: “A New Paradigm for Utilities: Electrification of the Transportation and Heating Sectors.” 

Read the full Brattle and EPRI report on the TVT: The Total Value Test: A Framework for Evaluating the Cost-Effectiveness of Efficient Electrification.