EAST LANSING – Michigan has serious work to do in order to comply with the EPA’s proposed Clean Power Plan, according to a recently released report from the Niskanen Center, a think tank based in Washington, D.C. In order to achieve compliance, Michigan electricity producers would need to reduce their carbon dioxide emissions by 22.5 percent and potentially incur annual costs exceeding $2 billion by 2030.
The report was commissioned by the Niskanen Center and authored by Patrick Anderson and Traci Taylor of East Lansing’s Anderson Economic Group (AEG). The authors performed a rigorous, multi-year analysis of various baseline and CPP-compliance scenarios.
A new product from Supported Intelligence, the Sectoral Business Decision Model (SBDM), was central to this analysis. The SBDM focuses on the fundamental relationship between economic activity and electricity demand in a state to project long-term trends in key variables. This represents a significant improvement over previously available models for modeling similar scenarios.
“The power of the SI product to model actual business decisions over an extended time-frame helped make this the most accurate analysis of the compliance options published to date,” said Patrick Anderson, report co-author and Principal & CEO at Anderson Economic Group.
Supported Intelligence uses its patent-pending Rapid Recursive® method to model business responses to changes in the electricity price resulting from increased regulatory costs under the Clean Power Plan. These models better capture true behavior by more closely matching how managers think of these decisions. On top of that, they recognize that companies in the industrial sector are likely to respond very differently compared to companies in the commercial sector. This is especially true when it comes to changes in the electricity price. This segmentation yields the “Sectoral” in Sectoral Business Decision Model.
“We are thrilled to introduce this cutting-edge tool,” said Jeff Johnson, VP and COO of Supported Intelligence. “It is our hope that it will help users across the country make more informed decisions when it comes to complying with the Clean Power Plan or similar regulations.”
The SBDM has already been licensed for more advanced modeling by one of Michigan’s leading utility cooperatives. Supported Intelligence is working to package the tool for distribution, with the intent of selling the product across the United States in the near future. Interested parties are encouraged to contact Supported Intelligence or Anderson Economic Group to discuss licensing and consulting arrangements.
The full report is available at: Anderson Economic Group In addition, this report was featured on WJR and in a Detroit News editorial in the first few days after its publication.
For more information, visit their website at www.NiskanenCenter.org
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Jeff Johnson is Vice President and Chief Operating Officer at Supported Intelligence, LLC, a data analytics and software company founded in 2012 and headquartered in East Lansing, MI. Supported Intelligence provides analytical software and services that operate at the intersection of decision analytics and artificial intelligence. For more information, visit their website at www.SupportedIntelligence.com.
Anderson Economic Group is a boutique research and consulting firm, with offices in Chicago, Illinois; East Lansing, Michigan; and Istanbul, Turkey. The experts at AEG specialize in economics, public policy, business valuation, and industry analysis. For more information, visit their website at www.AndersonEconomicGroup.com.
The Niskanen Center is a libertarian 501(c)(3) think tank that works to change public policy through direct engagement in the policymaking process: developing and promoting proposals to legislative and executive branch policymakers, building coalitions to facilitate joint action, and marshaling the most convincing arguments in support of their agenda.
