Clean Energy Plans

Current law requires that certain entities submit a plan (clean energy plan) to the division of administration (division) in the department of public health and environment (department) and the public utilities commission (PUC) to reduce the entity's greenhouse gas emissions associated with the entity's electricity sales and to achieve at least an 80% reduction in greenhouse gas emissions caused by the entity's Colorado retail electricity sales by 2030 relative to 2005 levels (2030 clean energy target).

In addition to meeting the 2030 clean energy target, the act requires that any clean energy plan submitted to the division on or after January 1, 2024, achieve at least a 46% reduction in greenhouse gas emissions caused by the entity's Colorado electricity sales by 2027 relative to 2005 levels if the achievement of the 46% reduction in greenhouse gas emissions will maintain reliability and result in an incremental average annual cost of no more than 2.5% of the entity's system costs (new clean energy plan requirements). As part of any electric resource plan developed, finalized, or submitted on or after July 1, 2023, any entity that submits a clean energy plan to the division before January 1, 2024, is required to model:

• At least one portfolio that achieves the 2030 clean energy target; and
• At least one portfolio that achieves greater greenhouse gas emissions reductions than the reductions that the clean energy plan submitted before January 1, 2024, is projected to achieve by 2027 and the 2030 clean energy target.

The act also requires any entity that submits a clean energy plan to the division on or after July 1, 2023, to base the entity's 2005 baseline greenhouse gas emissions, estimated 2027 greenhouse gas emissions, and estimated 2030 greenhouse gas emissions on:

• The greenhouse gas emissions from each resource that is used to supply electricity to the entity's retail electricity customers; and
• The greenhouse gas emissions from each resource that generates electricity and that is owned by the entity if the applicable greenhouse gas emissions are not otherwise required to be included in another entity's clean energy plan.

The act also requires the division to independently confirm or calculate the data it uses in verifying a clean energy plan submitted to the division on or after July 1, 2023, and allow the public to access and provide comments about the data prior to the verification of a clean energy plan.

No later than June 1, 2028, the division, for each entity that is required to submit a clean energy plan and does not have its electric resource planning process regulated by the PUC, must:

• Calculate the percentage of reduction in greenhouse gas emissions achieved by December 31, 2027, relative to 2005 levels; and
• Determine whether each entity has obtained all of the resources necessary to achieve the 2030 clean energy target.

If the division determines that an entity has not obtained all of the resources necessary to achieve the 2030 clean energy target, no later than December 31, 2028, the entity must submit a report to the division identifying the resources that it has procured to achieve the 2030 clean energy target (report).

If the entity does not submit the report on or before December 31, 2028, or if the division determines from the report that an entity has not obtained all of the resources necessary to achieve the 2030 clean energy target, the air quality control commission (AQCC) shall adopt rules that limit the greenhouse gas emissions by the entity to ensure that the entity achieves the 2030 clean energy target and the division shall amend any of the entity's operating permits for sources of greenhouse gas emissions to ensure that the entity achieves the 2030 clean energy target.

The act also requires:

• If a utility's Colorado electricity sales between January 1, 2022, and December 31, 2022, are equal to or greater than 300,000 megawatt-hours, the utility to submit a clean energy plan to the division; and
• The owner of an electric generating unit that has a nameplate capacity equal to or larger than 50 megawatts and emits greenhouse gases directly into the atmosphere to submit a clean energy plan to the division that covers all greenhouse gas emissions from the unit that are not otherwise required to be included in the clean energy plan of another entity.

Any entity required to submit a clean energy plan to the division may designate another entity to submit a clean energy plan on its behalf or submit a joint clean energy plan with another entity.

No later than October 1, 2024, the division shall submit a report to the general assembly that includes certain data regarding which electric utilities have submitted clean energy plans to the division and the electricity generation resources that are responsible for greenhouse gas emissions in the state.

No later than December 31, 2024, the division shall issue guidance specifying the manner in which the division will track and account for greenhouse gas emissions associated with electric utility transactions in organized markets.

No later than March 31, 2026, any entity that is required to submit a clean energy plan may inform the division in writing of any challenges that the entity is encountering in achieving the 2030 clean energy target (challenges). If an entity informs the division of any challenges, the division and the Colorado energy office must hold at least one stakeholder meeting in 2026 to discuss the challenges. If the entity informs the division that the entity is still encountering challenges after the stakeholder meeting, no later than December 31, 2026, the division shall report the challenges to the general assembly.

The act defines "cooperative retail electric utility" as a retail electric utility that has:

• Indicated an intent to submit or, on or after December 1, 2020, has submitted a clean energy plan; and
• Provided a non-conditional notice that it is withdrawing from a wholesale generation and transmission cooperative after January 1, 2021, or enters into a partial requirements contract with a wholesale generation and transmission cooperative to obtain more than 5% of its firm capacity supply from a greenhouse-gas-emitting generation source other than the cooperative retail electric utility's wholesale generation and transmission cooperative (cooperative retail electric utility) provider.

A cooperative retail electric utility must submit a clean energy plan to the division no later than 24 months after ceasing to be a member of a wholesale generation and transmission cooperative or after the date that a partial requirements contract begins. The division shall verify, in consultation with the PUC, that the cooperative retail electric utility meets the new clean energy plan requirements and the 2030 clean energy target. Upon the request of the cooperative retail electric utility, certain entities must provide any emissions data in their possession that is necessary for the cooperative retail electric utility to develop and submit a clean energy plan to the division.

The act also defines "wholesale power marketer" as an entity operating in the state that supplies wholesale capacity or energy to a retail electric utility located in the state and that supplies 300,000 megawatt-hours or more of electricity to entities in the state annually (wholesale power marketer).

A wholesale power marketer must submit a clean energy plan with the division if, on or after July 1, 2023:

• The wholesale power marketer sells, provides, arranges for, or contracts for the delivery of capacity or energy to a retail electric utility in the state; and
• The greenhouse gas emissions associated with the retail electric utility's operations are not otherwise required to be included in another entity's clean energy plan.

The division must verify, in consultation with the PUC, that any clean energy plan submitted by a wholesale power marketer meets the new clean energy plan requirements and the 2030 clean energy target.

A wholesale power marketer that supplies electricity to any entity must, upon request of the entity, provide any emissions data in its possession that is necessary for the entity to develop and submit a clean energy plan to the division.

The act also defines "new electric utility" as any new electric utility that is incorporated, created, or otherwise formed on or after July 1, 2023, that:

• Serves retail customers in the state; and
• Sells 300,000 megawatt-hours or more of electricity in its first year of operation (new electric utility).

A new electric utility must submit a clean energy plan to the division no later than 2 years after being incorporated, created, or otherwise formed. If a new electric utility does not submit a clean energy plan to the division within this time, the AQCC shall adopt rules to reduce the greenhouse gas emissions by the new electric utility to ensure that the new electric utility meets the new clean energy plan requirements and the 2030 clean energy target.

For the 2023-24 state fiscal year, the act appropriates $276,384 from the general fund to the department for the following uses:

• $189,420 for use by the air pollution control division for personal services related to stationary sources;
• $23,520 for use by the air pollution control division for operating expenses related to stationary sources; and
• $63,444 for legal services.

APPROVED by Governor June 5, 2023

EFFECTIVE June 5, 2023
(Note: This summary applies to this bill as enacted.)