The act directs the Colorado Public Utilities Commission to update the methods used to determine the cost-effectiveness of demand-side management (DSM) programs to incorporate the social cost of methane emissions . The commission shall base the social cost of methane on the most recent assessment of the global social cost of methane developed by the U.S. federal government, using a discount rate of 2.5% or less as updated to reflect latest scientific consensus. The cost must be higher than $1,756 per short ton.
Methane emissions are defined as natural gas leakage during the extraction, processing, transportation, and delivery of natural gas by the utility and leakage from piping and other equipment. The commission shall incorporate the social costs into calculating the cost, benefit, and net present value of any applied DSM program, with the best available methane emissions value.