Charging for Carbon not Kilowatts

In an Energy Central article, Guidehouse explains why metering carbon can help utilities reduce their carbon footprint

For decades, utilities have focused on providing safe, reliable energy to consumers. However, as climate change affects industries worldwide, utilities must also take into consideration how they can reduce their company’s carbon footprint.

In an Energy Central article, Guidehouse’s Margot Everett, director, explained many economists believe the best way to reduce a utility’s carbon footprint is by including carbon costs in the price of electricity. 

“In this new paradigm, utilities charge customers for access to the electricity, which includes both the capacity to generate and deliver electricity,” Everett said. “Utilities then meter the carbon the customer consumes depending on the customer’s choice of generation source.”

Local and carbon-free generation resources would be charged the lowest costs while reliance on bulk power from carbon-emitting generation located hundreds of miles away would be charged at the highest rate. Everett said such a model balances customer choice with a market price for carbon that doesn’t need to be set by an act of law.

“Metering carbon not kilowatts promotes electrification,” Everett said. “As customers become aware of their carbon footprints, the benefits of electrification become more obvious and less reliant on traditional economics.”

Read the Energy Central Article

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