Senate Bill 26-022 Introduced

A Bill for an Act

• Page 1, Line 101Concerning an entity that encounters challenges in

• Page 1, Line 102achieving the greenhouse gas emissions reduction goal

• Page 1, Line 103included in the entity's clean energy plan.

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.)

Current law requires certain entities to file a clean energy plan (plan) to achieve an 80% decrease of greenhouse gas emissions caused by the entity's electricity sales in Colorado by 2030 relative to 2005 levels. Other entities may voluntarily choose to file a plan.

Under current law, no later than March 31, 2026, an entity required to submit a plan may inform the division of administration (division) in the department of public health and environment in writing of challenges the entity is encountering or expects to encounter in achieving the 80% reduction of greenhouse gas emissions by 2030. The bill clarifies that an entity that has voluntarily submitted a plan may also inform the division of challenges the entity is encountering or expects to encounter in achieving the 80% reduction of greenhouse gas emissions by 2030. The bill also extends the deadline by which an entity must inform the division of challenges from March 31, 2026, to May 31, 2026.

A cooperative electric association (association) exempted from regulation by the public utilities commission or a municipal utility (utility) that informs the division of challenges the association or utility is encountering or expects to encounter has until December 31, 2026, to submit to the division an updated plan with the earliest year, not later than 2040, that the association or utility expects to be able to achieve the 80% decrease of greenhouse gas emissions, relative to 2005 levels, without impairing the association's or utility's ability to maintain applicable electric reliability standards and without increasing the association's or utility's average annual electric rates greater than 1.5%.

The bill prohibits the air quality control commission and the division from undertaking any action that impairs the association's or utility's ability to maintain applicable electric reliability standards or that increases the association's or utility's average annual electric rates greater than 1.5%.

• 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 that:

• Page 2, Line 4(a)  Colorado energy prices are rising at an untenable pace for the

• Page 2, Line 5state's most vulnerable populations, disproportionately impacting

• Page 2, Line 6income-qualified residents and creating an energy affordability crisis that

• Page 2, Line 7forces struggling families and small businesses to make difficult decisions

• Page 2, Line 8regarding trade-offs for necessary expenses;

• Page 2, Line 9(b)  As a result, utility payment delinquencies are at an all-time

• Page 2, Line 10high and utility bill payment assistance programs are struggling to support

• Page 2, Line 11the expanding needs of community members;

• Page 3, Line 1(c)  Energy Outreach Colorado's 2024 annual report shows that

• Page 3, Line 2nearly one in 5 Colorado families spend 7% or more of their income on

• Page 3, Line 3energy bills, with 10.1% of families facing a severe energy burden of

• Page 3, Line 4spending over 10% of their income on energy bills;

• Page 3, Line 5(d)  Further, utility data reported to the U.S. energy information

• Page 3, Line 6administration shows a 22% increase in the cost of residential electricity

• Page 3, Line 7in Colorado over the last 6 years, worsened by double-digit rate increases

• Page 3, Line 8forecasted in upcoming years;

• Page 3, Line 9(e)  The Colorado department of human services, referred to in this

• Page 3, Line 10section as "DHS", received over 136,000 applications for low-income

• Page 3, Line 11home energy assistance in state fiscal year 2024-25;

• Page 3, Line 12(f)  DHS approved over 60% of these applications and provided

• Page 3, Line 13over $49,800,000 at an average benefit of over $565 per applicant. The

• Page 3, Line 14total number of applications with DHS for low-income home energy

• Page 3, Line 15assistance has increased 44% since 2019 and total payouts have increased

• Page 3, Line 16over 58%, demonstrating the severity of the affordability crisis.

• Page 3, Line 17(g)  In state fiscal year 2024-25, DHS received the greatest number

• Page 3, Line 18of applications for assistance from El Paso county residents, with over

• Page 3, Line 1918,000 applications. DHS approved over 11,000 of these applications and

• Page 3, Line 20provided more than $5.69 million in assistance to El Paso county

• Page 3, Line 21residents.

• Page 3, Line 22(h)  Requests with DHS for low-income energy assistance from El

• Page 3, Line 23Paso county have increased 48% since 2019, and El Paso county has led

• Page 3, Line 24the state each year in the total number of applications since 2019;

• Page 3, Line 25(i)  Because of the cost pressure already faced by many

• Page 3, Line 26income-qualified Coloradans, certain safeguards must exist to protect

• Page 3, Line 27already struggling ratepayers as Colorado undergoes a monumental clean

• Page 4, Line 1energy transition to achieve a carbon-free state economy;

• Page 4, Line 2(j)  Electricity must be made available on demand to maintain the

• Page 4, Line 3reliability of the grid, and electric utilities must maintain a certain level

• Page 4, Line 4of firm electric generation resources that can be controlled or dispatched

• Page 4, Line 5when needed;

• Page 4, Line 6(k)  The early retirement of these firm dispatchable electric

• Page 4, Line 7generation resources before sufficient replacement generating capacity is

• Page 4, Line 8made available causes resource adequacy challenges and significantly

• Page 4, Line 9increases uncertainty as to when and how much energy is needed and

• Page 4, Line 10available;

• Page 4, Line 11(l)  Insufficient electric resource adequacy can lead to power

• Page 4, Line 12disruptions that directly impact the health and safety of Coloradans and

• Page 4, Line 13the vital services offered by hospitals, schools, and first responders;

• Page 4, Line 14(m)  Because of the implications to national security, federal law

• Page 4, Line 15requires that military installations have electric power available at least

• Page 4, Line 1699.9% of the time;

• Page 4, Line 17(n)  Colorado is home to 6 major military installations that are

• Page 4, Line 18critical components of our national defense infrastructure, with 5 of the

• Page 4, Line 19installations in El Paso county and one installation in Aurora;

• Page 4, Line 20(o)  Ensuring continued reliable and affordable electric service to

• Page 4, Line 21the military is crucial to ensuring installations in Colorado can achieve

• Page 4, Line 22their critical missions and lessen the pressure to relocate these facilities

• Page 4, Line 23to other parts of the country;

• Page 4, Line 24(p)  Electric utilities throughout Colorado vastly differ from one

• Page 4, Line 25another based on the communities they serve, their business model, the

• Page 4, Line 26size of their service territories, the technical capabilities of their systems,

• Page 4, Line 27and many other factors; however, the state's clean energy planning

• Page 5, Line 1framework requires all electric utilities to achieve the exact same

• Page 5, Line 2greenhouse gas emission reductions by the exact same dates;

• Page 5, Line 3(q)  Access to electric transmission and interconnection facilities

• Page 5, Line 4is the key factor in determining a utility's ability to access new renewable

• Page 5, Line 5energy resources and quickly retire and replace its generation fleet in a

• Page 5, Line 6reliable and affordable fashion;

• Page 5, Line 7(r)  However, not all utilities have the same access to the same

• Page 5, Line 8transmission and interconnection assets, and more transmission must be

• Page 5, Line 9built to give Colorado utilities a more equal footing in their ability to

• Page 5, Line 10access a broader array of resources;

• Page 5, Line 11(s)  Several of Colorado's not-for-profit electric utilities are

• Page 5, Line 12expected to join the Southwest Power Pool regional transmission

• Page 5, Line 13organization in 2026, which will afford these utilities with new pathways

• Page 5, Line 14to access the resources necessary to achieve their clean energy targets,

• Page 5, Line 15especially the identification, funding, and construction of new

• Page 5, Line 16transmission projects;

• Page 5, Line 17(t)  However, the process to identify new transmission projects in

• Page 5, Line 18the regional transmission organization will not begin until 2027, and the

• Page 5, Line 19construction of such projects will take several years to permit and

• Page 5, Line 20construct;

• Page 5, Line 21(u)  In addition to barriers to transmission access, Colorado

• Page 5, Line 22utilities have been challenged by market conditions that were

• Page 5, Line 23unanticipated when the clean energy planning framework was established

• Page 5, Line 24in 2019 and amended in 2023, including an ever-changing federal policy

• Page 5, Line 25environment, unpredictable tariffs, supply chain disruptions, and the

• Page 5, Line 26repeal of clean energy subsidies for electricity investment and production

• Page 5, Line 27tax credits for wind and solar projects;

• Page 6, Line 1(v)  These federal changes have increased the cost, time, and

• Page 6, Line 2regulatory risk and ratepayer burden of advancing clean energy goals;

• Page 6, Line 3(w)  The inflexibility in Colorado's clean energy planning

• Page 6, Line 4framework does not recognize the material challenges utilities are facing

• Page 6, Line 5and offers no relief for utilities that are willing but unable to meet the

• Page 6, Line 6state's emission reduction targets within the next 4 years without

• Page 6, Line 7significant cost increases and threats to reliability; and

• Page 6, Line 8(x)  Environmental sustainability remains a priority of the general

• Page 6, Line 9assembly. However, state policy must not impose an undue financial

• Page 6, Line 10burden on ratepayers, with particular attention to income-qualified

• Page 6, Line 11households and the protection of community members and critical

• Page 6, Line 12services requiring uninterrupted power.

• Page 6, Line 13(2)  Therefore, the general assembly determines and declares that

• Page 6, Line 14Colorado's clean energy planning framework should include flexibility for

• Page 6, Line 15utilities that are unable to achieve their clean energy targets and consider

• Page 6, Line 16retail rate impacts and reliability standards to protect consumers and

• Page 6, Line 17prevent statewide resource adequacy constraints.

• Page 6, Line 18SECTION 2.  In Colorado Revised Statutes, 25-7-105, amend (1)

• Page 6, Line 19introductory portion and (1)(e)(VIII.5)(H); and add (1)(e)(VIII.5)(I) as

• Page 6, Line 20follows:

• Page 6, Line 2125-7-105.  Duties of commission - technical secretary - rules -

• Page 6, Line 22report - legislative declaration - definitions - repeal.

• Page 6, Line 23(1)  Except as provided in sections 25-7-130 and 25-7-131, the

• Page 6, Line 24commission shall promulgate adopt rules that are consistent with the

• Page 6, Line 25legislative declaration set forth in section 25-7-102 and necessary for the

• Page 6, Line 26proper implementation and administration of this article 7, including:

• Page 6, Line 27(e) (VIII.5) (H)  No later than March 31, 2026, any May 31, 2026,

• Page 7, Line 1an entity required to submit that submits a clean energy plan or a plan

• Page 7, Line 2pursuant to subsection (1)(e)(VIII)(I) subsection (1)(e)(VIII) of this

• Page 7, Line 3section to the division may inform the division in writing of any

• Page 7, Line 4challenges the entity is encountering or expects to encounter in achieving

• Page 7, Line 5at least an eighty percent reduction of greenhouse gas emissions caused

• Page 7, Line 6by the entity's Colorado electricity sales by 2030 relative to 2005 levels.

• Page 7, Line 7If an entity informs the division of any challenges in achieving the

• Page 7, Line 8greenhouse gas emissions reduction percentage, the division, in

• Page 7, Line 9coordination with the Colorado energy office created in section

• Page 7, Line 1024-38.5-101 (1), shall hold at least one public stakeholder meeting in

• Page 7, Line 112026 to discuss the challenges raised by the entity and strategies for the

• Page 7, Line 12entity to achieve the greenhouse gas emissions reduction percentage. If,

• Page 7, Line 13after the public stakeholder meeting, an the entity informs the division

• Page 7, Line 14in writing that the entity is still encountering or expects to encounter

• Page 7, Line 15challenges in achieving the greenhouse gas emissions reduction

• Page 7, Line 16percentage, no later than December 31, 2026, the division shall submit a

• Page 7, Line 17concise report to the general assembly summarizing the challenges the

• Page 7, Line 18entity is encountering or expects to encounter and describing any potential

• Page 7, Line 19solutions to the challenges. This subsection (1)(e)(VIII.5)(H) is repealed,

• Page 7, Line 20effective July 1, 2027.

• Page 7, Line 21(I)  Notwithstanding any other requirement of this

• Page 7, Line 22subsection (1)(e), an entity described in subsection (1)(e)(VIII)(F)

• Page 7, Line 23of this section that, on or before May 31, 2026, informs the

• Page 7, Line 24division of challenges in achieving the greenhouse gas emissions

• Page 7, Line 25reduction percentage may submit an updated clean energy plan

• Page 7, Line 26to the division, no later than December 31, 2026, with the

• Page 7, Line 27earliest year, not later than 2040, that the entity expects to be

• Page 8, Line 1able to achieve at least an eighty percent reduction of

• Page 8, Line 2greenhouse gas emissions caused by the entity's Colorado

• Page 8, Line 3electricity sales relative to 2005 levels without impairing the

• Page 8, Line 4entity's ability to maintain the electric reliability standards

• Page 8, Line 5adopted by the North American Electric Reliability

• Page 8, Line 6Corporation or a regional transmission organization of which

• Page 8, Line 7the entity is a member and without resulting in an increase in the

• Page 8, Line 8entity's average annual electricity rates greater than one and

• Page 8, Line 9one-half percent. Notwithstanding any other provision of this

• Page 8, Line 10section, neither the commission nor the division shall undertake

• Page 8, Line 11any action that impairs the entity's ability to maintain the

• Page 8, Line 12electric reliability standards adopted by the North American

• Page 8, Line 13Electric Reliability Corporation or a regional transmission

• Page 8, Line 14organization of which the entity is a member or that results in

• Page 8, Line 15an increase in the entity's average annual electricity rates

• Page 8, Line 16greater than one and one-half percent.

• Page 8, Line 17SECTION 3.  Safety clause. The general assembly finds,

• Page 8, Line 18determines, and declares that this act is necessary for the immediate

• Page 8, Line 19preservation of the public peace, health, or safety or for appropriations for

• Page 8, Line 20the support and maintenance of the departments of the state and state

• Page 8, Line 21institutions.