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Greenhouse Gas Emission Reduction Measures

Concerning measures to promote reductions in greenhouse gas emissions in Colorado, and, in connection therewith, making an appropriation.


    Section 1 of the act requires, beginning in 2024, each insurance company issued a certificate of authority to transact insurance business that reports more than $100 million on its annual schedule T filing with the National Association of Insurance Commissioners (NAIC) to participate in and complete the NAIC's "Insurer Climate Risk Disclosure Survey" or successor survey or reporting mechanism.
    Section 2 updates the powers and duties of the Colorado energy office, including requiring the office to make progress toward eliminating greenhouse gas (GHG) pollution from electricity generation, gas utilities, and transportation and to support the implementation of clean heat plans, beneficial electrification, and sustainable land-use measures to reduce energy consumption and GHG pollution.
    Section 3 requires the public employees' retirement association (PERA) to include as part of its annual investment stewardship report, which report is posted on the PERA board's website, a description of climate-related investment risks, impacts, and strategies.
    Section 4 adds wastewater thermal energy equipment to the definition of "pollution control equipment", which is equipment that the division of administration (division) in the department of public health and environment (CDPHE) may certify. Similarly, section 7 adds wastewater thermal energy to the definition of "clean heat resource", which is a resource that a gas distribution utility includes in its clean heat plan filed with the public utilities commission (PUC).
    The air quality control commission (AQCC) is required to establish by rule a fee per ton of GHG based on GHG emissions reported through air pollution emission notices. Section 5 authorizes the fee to be based on other reporting that the commission requires of GHG-emitting entities regarding emissions.
    A task force convened by the director of the Colorado energy office is required to develop recommendations, and the AQCC is required to adopt rules based on the recommendations, for the establishment of performance standards with which owners of certain buildings must comply. Under current law, the AQCC is tasked with adopting the rules on or before June 1, 2023. Section 6 extends the deadline for the AQCC's performance standards rules to September 1, 2023.
    Section 8 updates the statewide GHG emission reduction goals to add a 65% reduction goal for 2035, a 75% reduction goal for 2040, and a 90% reduction goal for 2045 when compared to 2005 GHG pollution levels. Section 8 also increases the 2050 GHG emission reduction goal from 90% of 2005 GHG pollution levels to 100%.
    Section 9 gives the oil and gas conservation commission (COGCC) authority over class VI injection wells (wells) used for sequestration of GHG if the governor and COGCC determine, in accordance with a study that the COGCC conducted in 2021, that the state has sufficient resources to ensure the safe and effective regulation of the sequestration of GHG. If the governor and the COGCC determine there are sufficient resources, the COGCC may seek regulatory primacy under the federal "Safe Drinking Water Act" (primacy) and, when granted, may issue and enforce permits for wells. The COGCC shall require, as part of its regulation of wells, that operators of the wells maintain adequate financial assurance until the COGCC approves the closure of a well site.    
    Section 9 further provides that:
    ●    A proposal to site a well in a disproportionately impacted community must be denied if the COGCC determines that the proposal will negatively impact the community; 
    ●    In issuing and enforcing a well permit, the COGCC must hold a public hearing and determine that the well complies with the siting requirements of the local government with jurisdiction over the proposed location of the well, the division of administration in the CDPHE has issued an applicable air permit for the well, the operator of the well has received the consent of any surface owner of land where the well would cause a surface disturbance, and the COGCC has added terms and conditions for the well permit to ensure that any public health and environmental impacts from the well are avoided, minimized, or mitigated;
    ●    The COGCC, in consultation with the CDPHE, may adopt rules to establish a process to certify the quantity and demonstrated security of carbon dioxide stored in a well;
    ●    On or before February 1, 2024, the COGCC, in consultation with the CDPHE, shall conduct a study to analyze the safety of wells, including the potential for carbon dioxide releases from wells and methods to limit such potential releases, and, on or before March 1, 2024, shall present its findings and conclusions from the study, including any legislative recommendations, to certain legislative committees. The COGCC shall not provide a permit for a well until the study has been completed and presented to the legislative committees.
    ●    A well must not be sited within 2,000 feet of a residence, school, or commercial building, but the COGCC may adjust the 2,000 foot setback by rule after evaluating the impacts arising from at least 4 wells that have been in place in the state for at least 4 years; and
    ●    The COGCC may conduct a study to determine if the state should seek primacy for all subsurface injection classes of wells that are included in the federal environmental protection agency's underground injection well program.
    Sections 10 and 11 prohibit a homeowners' association from disallowing the use of a heat pump system on a residential property located within the common interest community governed by the homeowners' association.
    Section 12 establishes a state income tax credit in an amount equal to 33% of the purchase price for new, electric-powered lawn equipment for purchases made in income tax years 2024 through 2026. A seller of new, electric-powered lawn equipment that registers with the department of revenue as a qualified retailer (qualified retailer) and demonstrates that it provided a purchaser a 30% discount from the purchase price of new, electric-powered lawn equipment may claim the tax credit and may retain from the credit allowed an administrative fee not to exceed 3% of the purchase price of the equipment sold.
    Sections 13 and 14 extend a $5,000,000 appropriation made to the division of local government in the department of local affairs in state fiscal year 2020-21 for use for the renewable and clean energy initiative program to allow the division to use the appropriation until it is fully expended.
    Section 16 requires the PUC, when reviewing an electric utility's plan for the construction or expansion of transmission facilities, to consider the need for expanded transmission capacity in the state, including the ability to expand capacity through construction of new transmission lines, improvements to existing lines, or connections to an organized wholesale market.
    Section 17 increases the reserve margin for the Colorado electric transmission authority from 15% to 50%.
    Section 18 requires retail electric utilities to provide timely service to customers seeking interconnection of the customer's retail distributed generation resource to the utility's grid and requires the PUC to establish, as part of its interconnection rules, timelines for timely interconnection. The PUC, after a hearing on a complaint regarding an alleged violation of the requirements for timely interconnection of a customer's retail distributed generation resource, may fine a retail electric utility up to $2,000 per day for each day the PUC determines that the violation continued. A retail electric utility may recover its prudently incurred costs to facilitate timely interconnection, including the costs of equipment needed for future upgrades for interconnection. Section 15 defines terms related to interconnection.
    Section 19 authorizes an electric public utility to recover its prudently incurred costs for facilitating an electric vehicle charging service connection for a customer, including costs for equipment to allow for future upgrades for such service connections.
    Section 20 raises the maximum penalty that the PUC may assess against a utility for a violation of the "Public Utilities Law" from $2,000 for each offense to $20,000 per offense for each day that the offense continues. Section 20 also establishes factors that the PUC is required to consider in assessing a penalty against a utility, including the size of the utility, the utility's previous history of any similar violations, remediation measures, and any factors that may mitigate the harm to the utility's customers.
    A gas distribution utility in the state is required to comply with clean heat targets by demonstrating the use of clean heat resources. Recovered methane, including biomethane, that meets a documented set of procedures and requirements that the AQCC establishes is such a clean heat resource. Section 21 amends the definition of "biomethane" to include operations for dairy cows, beef cattle, poultry, swine, or sheep and the definition of "recovered methane protocol" to include a protocol that the AQCC adopts to include the use of manure from beef cattle operations.
    Sections 22 and 24 incorporate projects to renovate or recondition existing utility transmission lines into the "Colorado Electric Transmission Authority Act", allowing the Colorado electric transmission authority (authority) to finance and renovate, rebuild, or recondition existing transmission lines in order to update and optimize the transmission lines. Section 23 requires that, on and after July 1, 2024, the authority operate on a fiscal year that aligns with the state fiscal year.
    Section 25 requires the authority to study the need for expanded transmission capacity, including the ability to expand capacity through construction of new transmission lines, improvements to existing lines, or connections to an organized wholesale market. The authority is required to present an initial report of its study to the PUC on or before September 1, 2024, and a final report to the joint committee of the legislative committees with jurisdiction over energy matters on or before January 31, 2025. Section 27 requires a local government to expedite, as practicable, its review of a land-use application that proposes a project to renovate, rebuild, or recondition existing transmission lines.
    Section 26 authorizes local governments, as part of their land-use authority, to regulate the surface impacts of wells, including the regulation of the location and siting of wells and the imposition of fees to cover emergency response capabilities arising from potential carbon dioxide releases from wells.
    For the 2023-24 state fiscal year, the act appropriates:
    ●    $338,270 from the oil and gas conservation and environmental response fund to the department of natural resources for use by the COGCC to implement this act, including $317,122 for program costs and $21,148 for legal services; 
    ●    $14,706 from the general fund to the CDPHE for use by the air pollution control division for personal services related to stationary sources; and
    ●    $21,148 to the department of law, from reappropriated funds received from the department of natural resources, to provide legal services for the department of natural resources.

(Note: This summary applies to this bill as enacted.)

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The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details