Colorado PUC Requires Utility to Use SCC in Electric Resource Plan

  • Application

    Integrated resource planning

  • Date

    March 2017
  • Details

    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 1 in its Electric Resource Plan (ERP). 2

  • SCC Value(s)

    $43 per ton in 2022; increasing to $69 per ton in 2050, 3 based on IWG SCC at 3%.

  • Reference

    Proceeding No. 16A-0396E

  • 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. 4

  • 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).

  • 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.” 5 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.” 6

  1.  We use the term “social costs of carbon” to refer generally to the concept of a monetization of the harm from each ton of carbon dioxide emissions, with the 2016 IWG report comprising the best available estimate of this value. ↩︎
  2.  Colorado PUC, Decision No. C17-0316, In the Matter of the Application of Public Service Company of Colorado for Approval of its 2016 Electric Resource Plan, Proceeding No. 16A-0396E, available here. ↩︎
  3.  Colorado PUC, Decision No. C17-0316, at 30, In the Matter of the Application of Public Service Company of Colorado for Approval of its 2016 Electric Resource Plan, Proceeding No. 16A-0396E. ↩︎
  4.  See §40-2-123(1)(b), C.R.S (“The commission may give consideration to the likelihood of new environmental regulation and the risk of higher future costs associated with the emission of greenhouse gases such as carbon dioxide when it considers utility proposals to acquire resources.”). ↩︎
  5. Id. ↩︎
  6.  Id.  ↩︎

← New York Incorporates SCC into Proceeding on Reforming the Energy Vision

California Air Resources Board Uses the SCC in Updated Climate Change Plan →

Feedback? Please email iliana.paul@nyu.edu.