2023 Colorado Revised Statutes › Title 40 - UTILITIES (§§ 40-1-101 — 40-43-104) › PUBLIC UTILITIES (§§ 40-1-101 — 40-17.5-105) › GENERAL AND ADMINISTRATIVE (§§ 40-1-101 — 40-9.8-104) › Article 3.2 - AIR QUALITY IMPROVEMENT COSTS (§§ 40-3.2-101 — 40-3.2-210) › Part 1 - GENERAL PROVISIONS (§§ 40-3.2-101 — 40-3.2-110) › Section 40-3.2-106 - Costs of pollution in utility planning - rules

(1)
The commission shall require an electric or gas public utility subject to commission jurisdiction to consider the social cost of carbon dioxide emissions and the social cost of methane emissions, as set forth in subsections (4) and (5) of this section, when determining the cost, benefit, or net present value of any plan or proposal submitted in one of the following proceedings:
(a)
Electric resource plans or any utility plan or application that considers or proposes the acquisition of new electric generating resources or the retirement of existing utility generation;
(b)
Applications related to section
40-2-124
;
(c)
Applications related to, or the commission's evaluation of, programs adopted under section
40-3.2-103
;
(c.5)
Applications related to, or the commission's evaluation of, programs adopted under section
40-3.2-104
; or
(d)
A plan or application for transportation electrification under section
40-5-107
or any other form of beneficial electrification, including beneficial electrification in buildings.
(2)
In a proceeding listed in subsection (1)(a) of this section, a utility shall:
(a)
At a minimum, model an optimization of a base case portfolio of resources using the cost of carbon dioxide emissions, as set forth pursuant to subsection (4) of this section. The cost of carbon dioxide emissions must apply to the evaluation of all existing electric generation resources and to any new resources evaluated or proposed as part of the resource modeling. The commission may require a utility to file or propose additional base cases. The utility may propose, and the commission shall consider, alternative optimized portfolios of resources in addition to the base case, utilizing different levels of costs for carbon dioxide.
(b)
(I)
Present a calculation of the net present value of revenue requirement for the resources in each optimized portfolio. To show the net present value of revenue requirement that would be incurred by the utility for implementing the portfolio, in addition to presenting the full net present value of revenue requirement through a calculation using the cost of carbon dioxide emissions set forth pursuant to subsection (4) of this section, the utility shall also present the full net present value of revenue requirement through a calculation without using the cost of carbon dioxide emissions set forth pursuant to subsection (4) of this section.
(II)
In addition to the net present value of revenue requirement calculations required in subsection (2)(b)(I) of this section, for each optimized model run, the utility must provide a present value calculation showing the net present value of the total cost of carbon dioxide emissions of each portfolio, calculated by multiplying the total emissions of that portfolio by the cost of carbon dioxide set forth pursuant to subsection (4) of this section.
(3)
In approving a resource plan, either with generic resources or in the analysis of bids in a competitive solicitation, the commission shall require a comparison of the portfolios' net present value of revenue requirements inclusive of the social cost of carbon dioxide. The commission shall also consider:
(a)
The net present value of revenue requirements of the cost of carbon dioxide or carbon dioxide equivalent emissions;
(b)
The net present value of revenue requirements that would be incurred by the utility for implementing the portfolio; and
(c)
Other relevant factors, as determined by the commission.
(4)
The commission shall base the cost of carbon dioxide emissions on the most recent assessment of the social cost of carbon dioxide developed by the federal government using a discount rate of two and one-half percent or less. Starting in 2020, the commission shall use a social cost of carbon dioxide of not less than sixty-eight dollars per short ton. The commission shall modify the cost of carbon dioxide emissions based on escalation rates of the 2020 base cost by an amount that is equal to or greater than the escalation rates established in the technical support document. When calculating the cost of carbon dioxide emissions for any proceeding listed in subsection (1) of this section, the commission shall use a discount rate for the social cost of carbon dioxide that does not exceed the lesser of two and one-half percent or any lower value established by the most recent available successor to the technical support document. Notwithstanding the discount rate used to develop the social cost of carbon dioxide value over the planning period, the commission shall continue to discount any net present value analysis of any optimized resource portfolio in the electric resource planning process using discount rates that the commission deems appropriate.
(5)
In the base case analysis of cost effectiveness as described in section
40-1-102(5)(b)
, the commission shall apply the social cost of carbon dioxide and the social cost of methane emissions to the benefit-cost calculation for programs that are defined to be energy efficiency or beneficial electrification programs or that incorporate behind-the-meter thermal renewable sources.
(6)
Repealed.
Amended by 2021 Ch. 330,§6, eff. 9/7/2021.
Amended by 2021 Ch. 283,§4, eff. 9/7/2021.
Amended by 2021 Ch. 220,§8, eff. 6/10/2021.
Added by 2019 Ch. 359,§13, eff. 5/30/2019.
L. 2019: Entire section added, (SB 19-236), ch. 3309, p. 3309, § 13, effective May 30. L. 2021: IP(3) and (3)(a) amended, (SB 21-272), ch. 1161, p. 1161, § 8, effective June 10; IP(1), (1)(c), (4), and (5) amended and (1)(c.5) added, (HB 21-1238), ch. 2137, p. 2137, § 6, effective September 7; IP(1), (1)(d), and (5) amended and (6) repealed, (SB 21-246), ch. 1676, p. 1676, § 4, effective September 7.
(1) Amendments to subsections IP(1) and (5) by HB 21-1238 and SB 21-246 were harmonized.
(2) Section 14 of chapter 220 (SB 21-272), Session Laws of Colorado 2021, provides that the act changing this section applies to conduct occurring on or after June 10, 2021.
(3) Section 8 of chapter 330 (HB 21-1238), Session Laws of Colorado 2021, provides that the act changing this section applies to plans, applications, or other documents reviewed by the public utilities commission on or after September 7, 2021.
2021 Ch. 330, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2021 Ch. 283, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
For the legislative declaration in HB 21-1238, see section 1 of chapter 330, Session Laws of Colorado 2021. For the legislative declaration in SB 21-246, see section 1 of chapter 283, Session Laws of Colorado 2021.