Power Scorecard Methodology Report

Table of Contents

EXECUTIVE SUMMARY

I. INTRODUCTION........................................................................................................................ 1

A. Two Measures of Environmental Quality............................................................................ 2

B. Outreach........................................................................................................................... 3

C. Ingredients........................................................................................................................ 3

D. Measures of Performance................................................................................................. 4

E. Scoring Environmental Impacts.......................................................................................... 5

F. Significantly Greater Adverse Environmental Impacts.......................................................... 5

G. Demonstrable Environmental Mitigation............................................................................. 6

II. AIR QUALITY IMPACTS.......................................................................................................... 6

A. CO₂Emission Rate and Score.......................................................................................... 6

B. SO_x Emission Rate and Score........................................................................................... 8

C. NO_x Emission Rate and Score........................................................................................ 10

D. MercuryEmission Rate and Score................................................................................... 11

E. Emission Offsets.............................................................................................................. 12

III. WATER QUALITY IMPACTS................................................................................................ 13

A. Thermal, Wind and Solar Generation Rating Methodology............................................... 13

1. Usage Impacts..................................................................................................... 13

2. Chemical or Water Quality Impacts...................................................................... 15

B. Geothermal Scoring Adjustments..................................................................................... 16

IV. LAND QUALITY IMPACTS.................................................................................................. 16

A. On-Site Land Impacts: Thermal, and Solar Generation..................................................... 17

1. Land Use/megawatt-hour..................................................................................... 17

2. Permanency of Use.............................................................................................. 17

B. Off-Site Land Impacts: Waste Impacts............................................................................ 19

1. Solid Waste Impacts............................................................................................ 19

2. Fuel Acquisition Adjustment................................................................................. 21

C. Land Impacts: Hydro and Wind Generation..................................................................... 22

1. Land Impacts of Wind Generation........................................................................ 22

2. Land and Water Impacts of Hydro Generation..................................................... 23

V. PURCHASES OF NEW RENEWABLE/ENVIRONMENTALLY PREFERRED ENERGY.. 24

VI. DATA COLLECTION............................................................................................................ 25

VII. PRODUCT SCORING........................................................................................................... 25

ATTACHMENT A

Default Scores by Fuel and Technology

ATTACHMENT B

Criteria for Designation as Low Impact Hydro

ATTACHMENT C

Criteria for Site Scoring Wind Projects

Power Scorecard^ä Methodology

Executive Summary

Flip that switch. We do it every day to power our lights, TV, stereo and in ever-increasing numbers, computers. Unlike the air we breathe or the water we drink, electricity that serves our basic human needs must be generated from a variety of fuels. And because most of this enormous system is not visible to us from the vantage point of our homes, it is easy to overlook the fact that generating electricity is the largest industrial source of pollution in the world, and that our own lifestyle choices and consumption patterns have an impact on the environment. Radioactive waste, global climate change, acid rain, declines in native fish populations, the scarring of once pristine landscapes to access fuel supplies – all of these environmental issues are linked to generating electricity.

Up until now, we had little choice about how much, or what kinds, of pollution our own electricity consumption generated. Decisions about which power plants to run or build were made for us by our local utility. We simply paid the bill. Today, growing numbers of consumers have a choice.

The electricity business is following in the footsteps of telecommunications, where consumers have had product and service choices for quite some time. Ultimately, all of us will have choice when it comes to power supplies. Even in electricity markets that remain regulated, incumbent utilities are often now offering premium electricity eco-products to their customers.

Many consumers and investors, if given the chance, will support the development of cleaner and greener power supplies. At least that is what public opinion polls have reported consistently over the years. However, the electric power industry is unique in its complexity, in its invisible omnipresence. We never actually see electricity, only the services it provides, and the gadgets this power source supports in our lives. The processes involved to generate electricity are engineering marvels whose details would baffle most consumers. Since monopolies have sold electricity throughout most of our lifetimes, we are not used to shopping for power. Consumers don’t know who to trust in an era of competition among electricity offers.

In order to allow a real market to develop, consumers and investors need tools to cut through the noise, to understand the environmental implications of their power choices, in order for them to act on their preferences.

The Power Scorecard is that tool. Power Scorecard provides consumers with the means to directly compare the environmental characteristics of various power products through a one-of-a-kind rating methodology. It allows consumers to evaluate the environmental quality of specific products in direct head-to-head comparisons. Now we can get answers to basic questions that previously never seemed to get a straight answer: Just how “clean” is the electricity I am buying? How good is that claim by one of those new power marketers that their electricity service is greener than what I am getting now? How bad can my current supply be?

Here is how it works. The Power Scorecard grades, the relative environmental impacts of the fuel resources and technology employed to produce an electricity product. A lower score means that the product produces less pollution and therefore impact on the environment and human health is minimal. A high score means the opposite: the product creates more – not less – environmental impacts such as increasing smog or acid rain or degrades land and water supplies. The Power Scorecard offers an easy to understand “score” customers can then use to compare the environmental quality of electricity products before they choose to either switch to a new supplier or stay with their existing electric utility company.

The Power Scorecard evaluates the environmental impacts of the specific generating facilities used to produce a specific retail power supply product. It measures the performance of the product on eight environmental criteria: global climate change, smog, acid rain, air toxics, water consumption, water pollution, land impacts and fuel cycle/solid waste.

An overall environmental impact score for each electricity product is calculated as the weighted average of eight measured indices, where the index of global climate change impacts is counted twice, reflecting the greater importance Power Scorecard assigns to this global environmental impact issue relative to the other seven. In light of the environmental risks associated with the long-term storage of radioactive wastes, nuclear power plants will typically have a score exceeding ten in the category of land use impacts.

The Power Scorecard provides detailed information on each of the eight environmental criteria that underlie the final score so users can see clearly how the impacts of power supplies on air, water and land contribute to a final score. This allows a consumer to align products with their own values. For example, if your top concern is global climate change, Power Scorecard allows you to find the product that best responds to this particular environmental threat. Any electricity product, whether marketed as an environmentally superior product or not, can be ranked. Products will be labeled, Excellent, Very Good, Good, Fair, Poor, and Unacceptable.

Along with judging products according to the fuel and specific electricity generation technology employed, Power Scorecard also reveals what portion of the power product comes from new renewable supplies, the most important building blocks for a more sustainable energy future. Not only do new, clean sources of electricity provide significant environmental improvement over most current generating resources, but purchases from new low impact sources create the consumer demand necessary for even more new renewable resources to be constructed. Buying electricity from new renewable generation yields immediate and long-term environmental gains. The Power Scorecard can finally end confusion over exactly how much of your own electricity bill supports the new state-of-the-art clean power technologies of tomorrow. The Power Scorecard also identifies those electricity products that offer other environmental enhancements such as commitments to energy efficiency or purchases of pollution credits to offset the negative air emission impacts from specific power plants whose output is included in a power product.

Some power marketers are selling products that are actually dirtier than the generic mix your current incumbent provides. Power Scorecard can also be used to compare dirty power products, too. Whether focused on the clean or the dirty, the Power Scorecard simplifies the switching process by underscoring the difference in environmental impacts between renewable and non-renewable electric supply.

California and Pennsylvania are among the first states to open up electricity markets to competition. New York and many New England states are phasing in full‑scale retail choice. User-friendly tools like the Power Scorecard empower consumers to consider the environmental impacts when exercising their opportunity of choice in electricity supply in these and other electricity markets in the near future. The Power Scorecard allows conscientious consumers to align their electricity supply with their own personal environmental values.

I. Introduction

The move to competition in the provision of electricity service will change the way consumers buy power. Early pilot programs, in which consumers were offered their choice of suppliers, revealed that they are very interested in the environmental quality of the electricity products offered and are often willing to pay a premium for green electricity. Electricity generation leaves a significant environmental footprint, emitting 66% of the nation’s sulfur dioxide (SO₂), 29% of its nitrogen oxides (NO_x), 36% of its carbon dioxide (CO₂) and 21% of its mercury. [1] Appropriate and accurate marketing and good evaluation tools are necessary to make the offer of environmentally superior electricity products a credible venture. The Power Scorecard provides consumers the means to distinguish objectively the relative environmental quality of the electricity services they must choose among in these new competitive markets.

More than 40 state legislatures and utility regulatory agencies have begun to review the risks and benefits of deregulating electricity suppliers in their state -- allowing certified or licensed suppliers (not just regulated monopoly utilities) to sell electricity to customers at market prices (rather than regulated rates).[2] In several states, notably California, Massachusetts, Pennsylvania, Rhode Island, New Hampshire, New Jersey and New York, customers have already been offered the opportunity to choose a new electricity supplier.

Some power products are distinguished by the environmental quality of the power derived from renewable and other “clean” power resources. The sale of these supplies in states that have deregulated their power markets is commonly referred to as green marketing. Monopoly utilities offering “green” alternatives to traditional generation resources in states which have not yet adopted deregulation, are engaged in what is commonly known as green pricing.[3] The Power Scorecard,[4] asks a set of questions about the resources used to generate the electricity being sold, and scores those answers generally on a scale from one to ten.[5] The scoring scale was established by a group of environmental and energy experts and represents their best judgment about how to rank the answers provided by the energy suppliers. Default scores are provided for those situations where only fuel-type or technology is known. Overall Power Scorecard ratings are developed for products based on the proportion of the product’s energy mix provided by each generating resource and the individual scores for each of those resources. Supplies or products with lower scores cause fewer adverse environmental consequences than those which rank higher on the scale. In an effort to make Power Scorecard understandable and manageable, the scoring process has been simplified as much as possible.

Objective measures of environmental impacts are key elements of the scoring, but Power Scorecard necessarily incorporates some judgment. Objective criteria are not available for measuring all impacts. Power Scorecard reveals the judgments it uses and discusses the basis on which those judgments were reached.

Power Scorecard augments the Center for Resource Solutions’ Green-e and other certification efforts developed around the country by allowing consumers to distinguish among each of the supply options carrying a Green-e label as well as supply options that have not yet been certified. Any electricity product, whether marketed as an environmentally superior product or not, can be ranked.

Power Scorecard provides consumers with the means to compare the environmental characteristics of various power products. The promise of retail choice is the power of consumers to choose services they want. This tool allows consumers to evaluate the environmental quality of a supply, and balance that with other attributes of the offer -- such as price. Only if customers have the tools necessary to distinguish easily between the relative environmental quality of different products will consumer choice have the potential to reduce the environmental impact caused by the generation of electricity.

A. Two Measures of Environmental Quality

Power Scorecard provides two measures of the environmental quality for each electricity product: one to assess the environmental impacts of the electricity generating sources that serve consumers, and one to assess the contribution to displacing existing high impact electricity supplies with new low impact renewable and environmentally preferred supplies. For each of the two measures, products are assigned one of six ratings: unacceptable, poor, fair, good, very good, or excellent.

The Environmental Impact Rating

The Power Scorecard evaluation tool ranks the relative environmental quality of an electricity product. Supplies with lower scores have better environmental quality than those that rank higher. Power Scorecard allows consumers to compare products based on their environmental quality. Power Scorecard also allows suppliers to assess the relative environmental quality of alternative product designs and to assess the quality of offers made by their competitors. Its flexible structure enables Power Scorecard’s use across the wide range of product designs providers may wish to offer.

The Environmentally Preferred New Renewable Content Rating

The Power Scorecard evaluation tool also rates products on the amount of new renewable or environmentally preferred energy included in their mix. Not only do new, clean sources of electricity provide significant environmental improvement over most current generating resources, but purchases from new low impact sources create the financial market necessary for even more new renewable resources to be constructed. Buying electricity from new renewable generation yields immediate and long-term environmental gains.

B. Outreach

The Pace Energy Project expects to make the Power Scorecard assessment of products available on the web in each of the states where consumer choice is provided. In addition, the environmental organizations that have guided the creation of this tool will be using it to advise their members of the environmental quality of available electricity products. Power Scorecard and related informational materials will be offered to other organizations to increase consumer awareness of the links between environmental quality and retail choice. A major education campaign on the value of buying environmentally superior electricity products is also planned.

C. Ingredients

An effective green rating program will have three major components:

1. transparent and objective environmental quality criteria and associated measures of performance;

2. a transparent and objective methodology for rating (i.e., scoring) service options against the

environmental quality criteria;

3. an education program that communicates rating scores in easy-to-understand terms that will help consumers make smart retail choices.

Power Scorecard addresses the first two components and builds the foundation for the third -- consumer education programs that must be delivered in each electricity market to encourage consumers to analyze the choices available and to make responsible decisions.

The environmental qualities assessed by Power Scorecard are in those areas most seriously impacted by electric generation technology. They include:

Air quality global climate change

acid rain, smog, and fine particulate pollutants

toxic mercury emissions

Water quality consumption of water resources

pollution of water bodies

impacts on fish populations and other aquatic ecosystems

Land quality impacts on land

fuel cycle/solid waste disposal

D. Measures of Performance

Power Scorecard identifies eight criteria on which to measure a generating resource’s air, water and land impacts and scores using a scale where zero represents no (deminimus) impact and a score of ten represents the high end of the range of impacts from current fossil fueled generation. Scores extend beyond the two ends of this scale when the magnitude of the impacts justify such scores.

As a general matter, scoring is calibrated using common references. A score of zero represents no (deminimus) impact. A score of four is assigned for those impacts that remain after pollution control or mitigation practices are incorporated to produce practically a very low emission rate from any fossil fuel technology. A score of ten is assigned to the high range of impacts associated with typical U.S. production of electricity.[6] On the scale for NO_x, for instance, a score of four is assigned to that level of emissions produced by a new, high efficiency combined cycle gas-fired facility and a ten for emissions expected from a coal plant lacking any NO_x controls. Measurement criteria that have two reference scores are linear from zero to four and from five to ten; all others are linear from zero to ten. This common scoring system allows environmental impacts to be compared across issue areas and technologies.

Power Scorecard provides scores for each of eight environmental impact criteria and, by combining these scores, offers an overall environmental impact score for each resource. The method for deriving total generation resource scores is discussed under “Scoring Environmental Impacts” below and the method for deriving total product scores is discussed in the "Product Scoring" section.

Currently our power comes from a number of different types of sources. Power Scorecard specifically assesses the following types of supply: thermal resources including geothermal, fossil-fuel and nuclear, and other resources including solar, wind, and hydro (see list of technologies addressed specifically in Attachment A). If other specific sources enter the market, Power Scorecard can be adapted to assess them as well.

Thermal, solar, wind and hydro facilities are scored on the same air quality criteria. All dual fuel and multi-fuel thermal supplies receive a composite score based on production, historic or projected, from each fuel type.

Thermal, solar and wind facilities are ranked on the same water criteria.

Thermal and solar resources are ranked on the same land criteria.

Hydro is ranked on site-specific water and land criteria, while recognizing that hydro plants produce no air emissions.

Wind is ranked on site-specific land criteria, while recognizing that wind plants also produce no air emissions.

E. Scoring Environmental Impacts

The manner in which the air, water and land scores for a facility are combined to derive a single generating resource score reflects a choice of environmental priorities on which to evaluate electric generating facilities. While objective measures of environmental impacts are key elements of most of the scoring, Power Scorecard necessarily incorporates judgment. Objective criteria are not available for measuring all impacts precisely. Nevertheless, these impacts exist. Power Scorecard reveals the judgments it uses in these cases and discusses the basis on which those judgments were reached.

F. Significantly Greater Adverse Environmental Impacts

Facilities evidencing impacts greater than those typically receiving a score of ten can be given higher scores by using the increments evident in the zero to ten scale. For example, certain coal facilities emit SO₂ at rates that are approaching 40% more than emissions of facilities that scored a ten for the SO₂ index.[8] Nuclear power plants have significantly greater land impacts, and pose significantly greater long-term environmental risks than do plants receiving a ten score and are scored appropriately in land categories.

G. Demonstrable Environmental Mitigation

Marketers wishing to improve the score of their power products may take steps to mitigate the environmental impact of the power they are selling. The scoring credits a number of such enhancements, including commitments to: 1) invest in new, low-impact renewable energy technologies 2) retire emission offsets or 3) mitigate the effects of water withdrawal on aquatic ecosystems, as for example, flow reduction, (re)location and (re)design of intake structures, fish deterrent devices (e.g., ultrasonics), fish return systems, or native fish restocking programs. Other enhancements may be reported by suppliers but are not now addressed by the scoring: a commitment to provide energy efficiency services is an important example. These enhancements may contribute significantly to the environmental value of services to consumers, in effect mitigating the environmental impacts captured in the scoring. Such unscored environmental enhancements may be addressed in qualitative observations provided when the scores are reported.

Suppliers of products with enhancements such as these are invited to list them in the product scoring process.

Power Scorecard will be revised to address important enhancements. Recognizing products that make a significant commitment to helping consumers take full advantage of energy efficiency opportunities will be among the first such changes in Power Scorecard.

II. Air Quality Impacts

Air quality is assessed by measuring four types of emissions:

Carbon Dioxide -- CO₂-- to assess Global Climate Change impacts;

Sulfur Oxides -- SO_x -- to assess acid rain, smog and fine particulates impacts;

Nitrogen Oxides -- NO_x -- to assess acid rain and smog impacts;

Mercury to assess the impact of air toxics.

Power Scorecard allows users to consider the effects of emission offsets on The Score (explained below).

A. CO₂ Emission Rate and Score

The scoring for CO₂ emissions is calibrated to award a score of four for emissions typical of a high-efficiency combined-cycle natural gas fueled power plant, currently the most effective application of fossil fuel technologies. Plants that burn other fuels may have implemented pollution controls required by regulations but still not meet this level of emissions, which is estimated to be 770 lbs. CO₂/MWH. A score of ten is given for a coal plant with high emissions since this signifies relatively low combustion efficiency.[9]

The diverse group of fuel types and fuel processing technologies that make up the category of “biomass” complicates scoring CO2 for biomass-fueled plants. It is also complicated by the interaction between a facility’s emissions, the avoided releases of greenhouse gases if the fuel is instead left to decompose, and CO₂ sequestering inherent in repeated regeneration of biomass fuels.

The global climate change impact score of biomass is based upon the net impact of the fuel source on global climate change agents (CO₂ and methane emissions). The measurement criteria used here represent our first, best efforts at correctly accounting for the multiple greenhouse gas implications of biomass as a fuel. As we learn more, this scoring will be refined. Initially we will employ the following scoring guidelines:

1. Projects using a biomass fuel supply that is certified as coming from “sustainable sources” will qualify for zero net emissions and receive a score of zero. This anticipates the creation of a “sustainable fuel source certification” akin to the recently developed Low Impact Hydropower certification managed by the Low Impact Hydropower Institute.

2. Projects using a biomass fuel supply that is not certified as sustainable, but for which there is a reasonable basis for believing they are being replaced (e.g., energy crops), or projects that use clean waste that would otherwise be landfilled or burned in the open and which come from working forest or agricultural operations where biomass is being replanted (although not necessarily being replanted for use as a fuel), would receive a global climate change score of 2.

3. Projects in which there is no evidence that the biomass is being replaced, but which are avoiding methane release, would obtain a global climate change score of 4 (examples: wood from clearing land for commercial or urban development). Although the climate change effect of avoiding methane emissions may be zero or positive, such projects are only given partial credit because the fuel source is removing previously sequestered carbon.

4. Projects with no evident carbon equivalent benefits would score 10 (for example, biomass being removed for commercial development without being replanted).

Construction and demolition waste (clean C&D wastes) will be placed in category #3 above (avoided landfill) or in category #4 depending on the circumstances.

In the case of landfill gas to electricity projects, a further adjustment is made to account for the valuable displacement of unflared methane for facilities that utilize previously (within the previous twelve months) unflared landfill gas (methane). These resources score a negative four on this criterion.

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Environmental Defense

The Environmentally Preferred New Renewable Content Rating