The bill requires the public utilities commission to adopt by rule, no later than July 31, 2021, renewable natural gas programs for large natural gas utilities (those that have at least 200,000 customer accounts in Colorado) and small natural gas utilities (those that have fewer than 200,000 customer accounts in Colorado). The rules must include reporting requirements and a process for natural gas utilities to fully recover prudently incurred costs associated with the large and small renewable natural gas programs.
"Renewable natural gas" is defined to mean any of the following products processed to meet pipeline quality standards or transportation fuel-grade requirements:
- Biogas that is blended with, or substituted for, geologic natural gas;
- Hydrogen gas derived from renewable energy sources; or
- Methane gas derived from any combination of biogas; hydrogen gas or carbon oxides derived from renewable energy sources; waste carbon dioxide; coalbed methane resulting from human activity; naturally occurring coalbed deposits; a municipal solid waste landfill; waste tire or municipal solid waste pyrolysis; or biogas recovery from manure management systems and anaerobic digesters.
If a large natural gas utility's total incremental annual cost to meet the targets of the large renewable natural gas program exceeds 5% of the large natural gas utility's total revenue requirement for a particular year, the large natural gas utility shall not make additional qualified investments under the large renewable natural gas program for that year without approval from the commission. The bill establishes the following portfolio targets for the percentage of gas purchased by large natural gas utilities that is renewable natural gas:
- By January 1, 2025, at least 5% must be renewable natural gas;
- By January 1, 2030, at least 10% must be renewable natural gas; and
- On and after January 1, 2035, at least 15% must be renewable natural gas.
Small natural gas utilities may opt in to the small renewable natural gas program as established by the commission by rule. The rule must include a rate cap limiting the small natural gas utility's costs of procuring renewable natural gas from third parties and qualified investments in renewable natural gas infrastructure.
(Note: This summary applies to this bill as introduced.)