A Bill for an Act
Page 1, Line 101Concerning energy affordability, and, in connection
Page 1, Line 102therewith, establishing a first allotment of
Page 1, Line 103residential electricity service program that provides
Page 1, Line 104income-qualified utility customers a minimum level of
Page 1, Line 105electricity service at a marginal cost rate.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill requires an investor-owned electric utility (utility) to submit a proposal to the public utilities commission (PUC) that establishes a first allotment of residential electricity service (FARE service) program.
The FARE service program provides a minimum level of electricity at a marginal cost rate for income-qualified utility customers. A FARE service proposal that a utility submits to the PUC must include:
- The amount of electricity that qualifies as a minimum level of electricity for an average income-qualified utility customer based on monthly usage to support a customer's basic needs;
- A marginal cost rate on a per-kilowatt-hour basis for delivering electricity to a customer, which marginal cost rate must be lower than the residential customer rate that the income-qualified utility customer would normally be charged; and
- A description of the process by which an income-qualified utility customer may enroll in the FARE service program.
The PUC shall approve a utility's FARE service proposal if the PUC determines that the proposed FARE service would be in the public interest.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. Legislative declaration. (1) The general assembly
Page 2, Line 3finds and declares that:
Page 2, Line 4(a) Public utilities have operated in Colorado to provide electricity
Page 2, Line 5service for over 100 years;
Page 2, Line 6(b) As public utilities, investor-owned electric utilities are granted
Page 2, Line 7certain privileges for providing electricity service to the public, such as
Page 2, Line 8operating as a monopoly within their service territories, the ability to
Page 2, Line 9recover costs from ratepayers, and an almost guaranteed rate of return;
Page 2, Line 10(c) Demands for and the use of electricity have changed
Page 2, Line 11dramatically over the past 100 years, and now electricity service is not a
Page 2, Line 12luxury but an integral and necessary part of daily life;
Page 2, Line 13(d) However, expectations upon investor-owned electric utilities
Page 2, Line 14have not changed to reflect the integral nature that electricity serves in
Page 3, Line 1modern life so that everyone can afford and have access to reliable
Page 3, Line 2electricity;
Page 3, Line 3(e) Thus, it is necessary for the general assembly to regulate
Page 3, Line 4public utilities so that all citizens of Colorado, regardless of income, can
Page 3, Line 5afford electricity service; and
Page 3, Line 6(f) It is in the public interest for investor-owned electric utilities
Page 3, Line 7to provide the first allotment of residential electricity service to
Page 3, Line 8income-qualified utility customers, which service represents a minimum
Page 3, Line 9level of electricity at a marginal cost rate to customers.
Page 3, Line 10SECTION 2. In Colorado Revised Statutes, add 40-3-122 as
Page 3, Line 11follows:
Page 3, Line 1240-3-122. First allotment of residential electricity (FARE)
Page 3, Line 13service - marginal cost rate - income-qualified utility customers -
Page 3, Line 14minimum level of electricity - commission approval - rules -
Page 3, Line 15definitions.
Page 3, Line 16(1) Definitions.As used in this section, unless the context
Page 3, Line 17otherwise requires:
Page 3, Line 18(a) "First allotment of residential electricity service" or
Page 3, Line 19"FARE service" means a minimum level of electricity provided at
Page 3, Line 20a marginal cost rate to income-qualified utility customers.
Page 3, Line 21(b) "Income-qualified utility customer" has the meaning
Page 3, Line 22set forth in section 40-3-106 (1)(d)(II).
Page 3, Line 23(c) "Investor-owned electric utility" means a retail
Page 3, Line 24electric utility in the state that is regulated by the commission
Page 3, Line 25and is not a cooperative electric association or a municipally
Page 3, Line 26owned utility.
Page 3, Line 27(d) "Marginal cost rate" means the rate charged to an
Page 4, Line 1income-qualified utility customer that is approved by the
Page 4, Line 2commission as part of a utility's FARE service proposal and
Page 4, Line 3accounts for the marginal costs, on a per-unit-of-service basis,
Page 4, Line 4that an investor-owned electric utility incurs to provide that
Page 4, Line 5unit of service to an income-qualified utility customer over a
Page 4, Line 6contract period as if the income-qualified utility customer were
Page 4, Line 7a new customer, which costs include:
Page 4, Line 8(I) Fuel;
Page 4, Line 9(II) Purchased power;
Page 4, Line 10(III) Operation and maintenance costs;
Page 4, Line 11(IV) Capital additions;
Page 4, Line 12(V) Overhead;
Page 4, Line 13(VI) Taxes; and
Page 4, Line 14(VII) Fees.
Page 4, Line 15(e) "Minimum level of electricity" means the minimum
Page 4, Line 16amount of electricity, measured in kilowatt-hours, that an
Page 4, Line 17average income-qualified utility customer in an investor-owned
Page 4, Line 18electric utility's service territory would likely use in an
Page 4, Line 19average month to support the customer's basic living needs, as
Page 4, Line 20proposed by an investor-owned electric utility and approved by
Page 4, Line 21the commission.
Page 4, Line 22(2) (a) Notwithstanding any other provision of articles 1
Page 4, Line 23to 7 of this title 40 to the contrary, an investor-owned electric
Page 4, Line 24utility shall provide FARE service to income-qualified utility
Page 4, Line 25customers in the investor-owned electric utility's service
Page 4, Line 26territory.
Page 4, Line 27(b) An investor-owned electric utility may charge an
Page 5, Line 1income-qualified utility customer enrolled in the utility's FARE
Page 5, Line 2service program the utility's approved residential electricity
Page 5, Line 3rate for any amount of electricity used by the customer that is
Page 5, Line 4above the minimum level of electricity.
Page 5, Line 5(3) (a) As part of an investor-owned electric utility's first
Page 5, Line 6rate case filed with the commission on or after January 1, 2027,
Page 5, Line 7the investor-owned electric utility shall submit a proposal to
Page 5, Line 8provide FARE service to income-qualified utility customers in
Page 5, Line 9the investor-owned electric utility's service territory.
Page 5, Line 10(b) The FARE service proposal submitted by an
Page 5, Line 11investor-owned electric utility pursuant to subsection (3)(a) of
Page 5, Line 12this section must include:
Page 5, Line 13(I) The amount of electricity that qualifies as a minimum
Page 5, Line 14level of electricity for an average income-qualified utility
Page 5, Line 15customer in the utility's service territory based on the average
Page 5, Line 16monthly usage by an income-qualified utility customer to
Page 5, Line 17support the customer's basic living needs;
Page 5, Line 18(II) A marginal cost rate on a per-kilowatt-hour basis for
Page 5, Line 19delivering electricity to an income-qualified utility customer
Page 5, Line 20in the utility's service territory; and
Page 5, Line 21(III) A description of the process by which an
Page 5, Line 22income-qualified utility customer may enroll in and receive
Page 5, Line 23service through the FARE service program offered by the
Page 5, Line 24investor-owned electric utility.
Page 5, Line 25(4) (a) The marginal cost rate included in a FARE service
Page 5, Line 26proposal must be lower than the rate or rates that the
Page 5, Line 27income-qualified utility customer would be or currently is
Page 6, Line 1subject to under the residential rate set forth in the
Page 6, Line 2investor-owned electric utility's tariffs in effect at the time the
Page 6, Line 3income-qualified utility customer applies to receive the FARE
Page 6, Line 4service from the investor-owned electric utility.
Page 6, Line 5(b) The marginal cost rate included in the FARE service
Page 6, Line 6must be comparable to the investor-owned electric utility's
Page 6, Line 7marginal cost of providing service to a new income-qualified
Page 6, Line 8utility customer.
Page 6, Line 9(c) The implementation of the FARE service must not
Page 6, Line 10directly increase the cost of utility service for customers of
Page 6, Line 11the investor-owned electric utility.
Page 6, Line 12(d) If an investor-owned electric utility includes
Page 6, Line 13calculations and analyses in the utility's FARE service proposal
Page 6, Line 14that indicate that the cost of utility service for other
Page 6, Line 15customers will increase as a direct result of the utility
Page 6, Line 16implementing the FARE service, the commission, in its
Page 6, Line 17determination of the utility's anticipated profit for the rate
Page 6, Line 18case period, shall calculate that anticipated profit based on an
Page 6, Line 19anticipated profit amount reduced by the documented
Page 6, Line 20cost-of-service impact on other customers resulting from the
Page 6, Line 21implementation of the utility's FARE service.
Page 6, Line 22(5) The commission shall approve a FARE service proposal
Page 6, Line 23submitted in compliance with subsections (3) and (4) of this
Page 6, Line 24section if the commission determines that the proposal is in the
Page 6, Line 25public interest.
Page 6, Line 26(6) (a) The commission may approve an investor-owned
Page 6, Line 27electric utility's FARE service proposal and set a minimum and
Page 7, Line 1maximum amount for the marginal cost rate that is consistent
Page 7, Line 2with the requirements of subsections (2), (3), and (4) of this
Page 7, Line 3section.
Page 7, Line 4(b) The commission may adopt any rules necessary to
Page 7, Line 5implement this section.
Page 7, Line 6(7) Rates charged to income-qualified utility customers
Page 7, Line 7under an investor-owned electric utility's approved FARE
Page 7, Line 8service shall not be deemed unfair, unjust, or discriminatory in
Page 7, Line 9violation of section 40-3-101 (1).
Page 7, Line 10SECTION 3. Act subject to petition - effective date. This act
Page 7, Line 11takes effect at 12:01 a.m. on the day following the expiration of the
Page 7, Line 12ninety-day period after final adjournment of the general assembly (August
Page 7, Line 1312, 2026, if adjournment sine die is on May 13, 2026); except that, if a
Page 7, Line 14referendum petition is filed pursuant to section 1 (3) of article V of the
Page 7, Line 15state constitution against this act or an item, section, or part of this act
Page 7, Line 16within such period, then the act, item, section, or part will not take effect
Page 7, Line 17unless approved by the people at the general election to be held in
Page 7, Line 18November 2026 and, in such case, will take effect on the date of the
Page 7, Line 19official declaration of the vote thereon by the governor.