Counting the Costs: Scientific Uncertainty and Valuation Perspective in EXMOD

The computer model, EXMOD, quantifies externalities associated with electric generating facilities using the damage function approach. EXMOD uses data for facilities sited in New York State and for impacts in the northeastern U.S. and Canada. EXMOD is able to address some of the limitations and uncertainties inherent in the damage function approach by providing the user with access to the model’s fundamental assumptions used to calculate physical impacts and the monetary estimates of those impacts. In this paper, a set of alternative default facility, impact, and valuation assumptions has been developed. The effect of these alternative assumptions on the external costs computed by EXMOD has been tested in a case study of a coal plant situated near New York City. Results show that central estimates of the external costs are about 7 mills per kWh for a new facility with EXMOD’s default assumptions, and about 70 mills per kWh for an existing facility using alternative impact and valuation assumptions. Because of its strengths and flexibility, if carefully applied and interpreted, EXMOD can be a valuable tool in electricity resource assessment and policy, complementing other tools and approaches, in a wide range of contexts and locations.