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Rule Title: ENVIRONMENTAL EXTERNALITIES
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Department: PUBLIC SERVICE REGULATION, DEPARTMENT OF
Chapter: UTILITY DIVISION
Subchapter: Least Cost Planning - Electric Utilities
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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38.5.2003    ENVIRONMENTAL EXTERNALITIES

(1) Negative externalities result in over consumption of goods and services and misallocation of society's resources. It is in society's interest to internalize external costs when the marginal benefits of continued efforts to do so are greater than the marginal costs. Utilities should address external environmental costs in their existing resource portfolios and in resource planning and acquisitions as follows.

(a) A range of environmental impact mitigation and control costs should be quantified. The value of unmitigated environmental impacts should be estimated using the best available methods for assessing environmental costs. External environmental costs which are nonquantifiable should not be ignored; they should be incorporated using documented judgment in the multiple attribute evaluation;

(b) The uncertainty and risk associated with the cost of future environmental regulations which may be imposed on a utility should be assessed and incorporated into resource planning decisions;

(c) Uncertainty associated with the size and importance of external environmental costs should be incorporated into the risk assessment analysis;

(d) Existing and potential resources should be weighed and ranked, in part, on the basis of their environmental impacts. The utility should assign weights and ranks by drawing on the best available scientific and engineering methods, its own judgment and input from the public;

(e) The external environmental costs associated with all resource alternatives, including continued operation of existing resources, PURPA resources and resources identified through competitive solicitations, should be analyzed consistently. The type of analysis specified in the decision standards in the administrative rules of the Major Facility Siting Act may be used as a reference. See ARM 36.7.101 - 36.7.5502;

(f) In evaluating resource options utilities should recognize protected areas such as wildernesses, parks, the Northwest Power Planning Council's (NWPPC) designated "protected areas" (see protected areas and amendments and responses to comments; NWPPC issue paper 88-22) and any areas inhabited by protected wildlife;

(g) Utilities should recognize the external benefits associated with resources that correct or reduce existing environmental damage to, for example, critical airsheds and superfund sites;

(h) Sensitivity analyses should be conducted to determine if more environmentally benign resource alternatives exist which can provide equivalent benefits at lower societal cost.

(2) The external costs associated with transmission facilities should be accounted for in the utilities' least cost plans.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.


 

 
MAR Notices Effective From Effective To History Notes
12/25/1992 Current History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.
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