Colorado Law Requires Use of SC-GHG in Utility Planning
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Application
To monetize greenhouse gas emissions in utility planning, including electric resource plans, renewable energy standards, beneficial electrification, and demand-side management programs.
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Date
June 2021 -
Details
The Colorado legislature passed a statute requiring the state’s Public Utilities Commission to account for the costs of carbon dioxide and methane emissions in a range of utility planning rules including electric resource plans, renewable energy standards, beneficial electrification, and demand-side management programs. Under the relevant provision, the state agency must calculate the net present value for the resources in each optimized portfolio that incorporates the SC-GHG. The law requires use of SC-GHG developments “developed by the federal government” and “using a discount rate of [2.5%] or less.”
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SCC Value(s)
The statute requires use of federal values at discount rates no higher than 2.5%. Therefore, the SC-GHG values used under this statute must be at least as high as the values at 2.5% discount rate produced by the Interagency Working Group on the Social Cost of Greenhouse Gases (for 2030 emissions, at least $89 for carbon dioxide and $2500 per ton of methane). Colorado could use higher values using lower discount rates or updated federal estimates.
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