The Public Utilities Commission written order approving Xcel Energy’s Electric Resource Plan, issued April 28, contains important precedents that acknowledge the real costs of climate change in Colorado. The long-range planning document will guide Xcel in making future resource decisions. COSEIA believes it is very significant that the PUC majority agreed with us, and others, that Xcel must model the “social costs’’ of carbon when planning on what future energy resources to acquire.
While advocates have been arguing for years that broader impacts from carbon pollution need to be considered in resource planning, this is the clearest direction yet provided that the PUC can use its discretion to consider such costs. Thus, conditions such as health impacts, fires, drought, flooding, extreme heat, tourism impacts and more need to be considered in making resource decisions.
Additionally, the PUC agreed with COSEIA on another key point: that Xcel must model different levels of discounting the future costs of fossil fuels. In addition to the long-standing 6.78% discount figure used by Xcel, the utility now must model both a 3% and 0% scenario. We believe this will more accurately allow decision makers to evaluate the costs of fossil fuels compared to renewables because the higher rate unfairly discounted the future cost of fossils.
We believe these two important parts of the decision mark important progress in Colorado toward more accurately accounting for the costs and benefits of renewable energy as compared to fossil energy.