Section 1 of the bill authorizes payments from an existing fund for administrative expenses of the public utilities commission (PUC) to defray the costs incurred by the department of public health and environment and any other state agencies in reviewing clean energy plans submitted under section 3 of the bill.
Section 2 repeals laws that allow an electric utility to own, as rate-based property, new eligible energy resources without competitive bidding if certain conditions are satisfied.
Section 3 supplements the existing renewable energy standards statute by establishing targets for the reduction of carbon dioxide emissions from electricity generation by utilities serving more than 500,000 customers, with the opportunity for other utilities to opt in. The targets are:
- By 2030, an 80% reduction in carbon dioxide emission levels compared to 2005 levels; and
- For 2050 and thereafter, a goal of a 100% reduction in carbon dioxide emission levels.
Section 3 also directs qualifying retail utilities to submit plans to the PUC as part of their ongoing resource acquisition planning process to address the clean energy targets. A clean energy plan must detail the actions and investments the utility intends to undertake, including specifying the new resources and infrastructure proposed to be used; the anticipated effects of the plan on the safety, reliability, and resilience of the overall electric system; the methods proposed for measuring carbon dioxide reductions; and the costs of implementation, which must be reasonable.
The approval process also includes participation by the division of administration within the department of public health and environment regarding the measurement of carbon dioxide emission reductions and predictions as to whether the clean energy plan will achieve the desired reductions.
A utility implementing a clean energy plan may recover its costs of implementation through rates, as approved by the PUC, and own any generating resources and infrastructure necessary to effectuate the plan. The utility is required to use a competitive bidding process to fill the cumulative resource need identified in its next electric resource plan that includes a clean energy plan filed after January 1, 2020.
Each utility that receives approval of a clean energy plan is required to report to the governor, the general assembly, the PUC, and the air quality control commission on a list of matters, including its progress in implementing the plan and in reducing carbon dioxide emissions. To address Colorado's relative lack of seamless integration into the national energy grid, the PUC is directed to open an investigatory proceeding to evaluate the costs and benefits associated with regional transmission organizations, energy imbalance markets, joint tariffs, and power pools.
Section 4 strengthens an existing provision requiring electric resource acquisition decisions to be made with consideration of "best value" employment metrics and the use of Colorado labor by requiring a utility to obtain and provide to the PUC relevant documentation on these topics, including the availability of apprenticeship programs registered with the United States department of labor.
Section 5 establishes a qualified right for a retail electric utility customer to generate, consume, store, and export to the grid any electricity produced from customer-sited renewable sources, also known as distributed generation.
Section 6 adopts the "Colorado Energy Impact Bond Act" under which electric utilities may finance the retirement of fossil-fuel-powered generation facilities and the transition to renewable energy sources by issuing low-cost corporate securities. These securities, known as Colorado energy impact bonds or "CO-EI bonds," are subject to PUC approval and required to have a rating of at least AA or AA2, must have a scheduled maturity date of 32 years or less, and are repayable through rates as part of the costs of implementing a clean energy plan.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)