Colorado PUC Requires Utility to Use SCC in Electric Resource Plan
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Application
Integrated resource planning
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Date
May 2017 -
Details
In 2017, the Colorado Public Utilities Commission ordered that the Public Service Company of Colorado (a.k.a. Xcel Energy) take into account the social costs of carbon in its Electric Resource Plan (ERP). In early 2019, the Colorado State Legislature passed a bill requiring the utilites commission to evaluate "the cost of carbon dixoide emissions" in resource planning, using the IWG Social Cost of Carbon values initially and increasing to $46 per ton in 2020.
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SCC Value(s)
$43 per ton in 2022; increasing to $69 per ton in 2050, based on IWG SCC at 3%.
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Reference
Proceeding No. 16A-0396E
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Legal Authority
Colorado PUC had considered externalities, like public health effects, in other ERP proceedings, and has authority under §40-2-123(1)(b), C.R.S. to include such considerations in resource planning.
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Status
CPUC initiated Proceeding No. 17M-0694E in October 2017 to implement its rules regarding Electric Resource Planning and incorporate its findings of Decision No. C17-0316, including changes to Rules CCR 723-3, 3604(k) and 3611(g).
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Commentary
In its decision, the commission noted that by modeling these social costs of carbon, “we can test the robustness of the portfolios and assess the impact to customers of a broader range of costs from carbon emissions.” The Commission also found that the IWG estimate “is a reasonable quantification of the potential cost of externalities for the purpose of [resource plan] model portfolios.”
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