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Does ICF take into account full societal costs, including health and climate change impacts?
In standard industry practice, commodity forecasts developed for integrated resource plans do not explicitly incorporate the full societal costs of electricity generation, including health impacts or the broader economic impacts associated with climate change. Rather, these forecasts are intended to reflect market-based outcomes for transactable energy commodities. They are grounded in observable and quantifiable inputs such as fuel prices, supply-demand fundamentals, capital and operating costs, and prevailing market design constructs. They rely on costs that are directly internalized by market participants and reflected in clearing prices, instead of attempting to embed broader externalities that are not uniformly priced or regulated across jurisdictions.
To the extent societal costs are considered, they are generally accounted for indirectly through policy and regulatory mechanisms that translate such externalities into enforceable economic signals. These may include, for example, carbon pricing programs (such as RGGI), emissions compliance requirements, renewable or clean energy mandates, and other environmental regulations, all of which can affect dispatch costs, resource mix, and ultimately market prices. In some instances, additional sensitivities or alternative scenarios may be evaluated that apply an explicit social cost of carbon or impose emissions constraints; however, such analyses are typically used for comparative or planning purposes and are not incorporated into the base commodity price forecast itself.