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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0431.02 Clare Haffner x6137 HOUSE BILL 26-1225
House Committees Senate Committees
Energy & Environment
A BILL FOR AN ACT
CONCERNING REQUIREMENTS TO FOSTER DISTRIBUTED ENERGY101
RESOURCES IN THE STATE.102
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.)
Under current law, each subscriber to a community solar garden
receives a net metering credit to their electric bill. The community solar
subscriber organization can choose between a fixed bill credit or a bill
credit that is adjusted annually. The bill states that, on and after July 1,
2026, an annual adjustment mechanism must be applied to fixed bill
credit rates to index the value of the fixed bill credit to changing rate
HOUSE SPONSORSHIP
Smith and Willford,
SENATE SPONSORSHIP
Ball,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
trends.
A public utility is permitted under current law to recover its
prudently incurred costs to facilitate a timely interconnection of a
distributed energy resource. The bill prohibits a public utility from
requiring an interconnection customer to pay the costs associated with
interconnection facilities and upgrades until 30 days before the public
utility incurs the costs. The bill allows a public utility to require an
interconnection customer to provide security for the estimated full costs
of interconnection at the time of mutual execution of an interconnection
agreement.
The bill requires a public utility to:
!On or before July 1, 2026, develop a process to allow an
interconnection customer to contract with a third party to
perform an interconnection study;
! On or before September 1, 2026, develop a process to
allow for the concurrent performance of all needed
interconnection studies; and
! On or before October 1, 2026, develop a process to allow
an interconnection customer to contract with a third party
to perform any upgrades needed for interconnection,
including engineering, procurement, and construction
upgrades.
An interconnection study and upgrades that are performed by a
contracted third party must meet applicable safety, reliability, labor, and
technical standards.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Short title. The short title of this act is the2
"Advancing Grid Resilience Using Distributed Energy Resources Act".3
SECTION 2. Legislative declaration. (1) The general assembly4
finds and declares that:5
(a) Demand for electricity is quickly increasing, and the ability of6
electric utilities to affordably satisfy demand while preserving reliability7
is increasingly important;8
(b) Electricity generation sources in the state are increasingly9
renewable due to consumer demand, state policy, and the lower10
generation costs of renewable electricity, and distributed energy resources11
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like community solar, dispatchable distributed generation, and distributed1
energy storage play an important role in satisfying such increasing2
electricity demand in an affordable way;3
(c) Since 2011, the state has consistently encouraged the4
deployment of community solar gardens to ensure that Coloradans5
without access to rooftop solar can still choose to use solar power, and6
ratepayers with low incomes, in particular, can benefit from community7
solar bill credits that reduce monthly utility bills;8
(d) Dispatchable distributed generation facilities, like solar paired9
with battery storage, are increasingly recognized as important10
cost-effective grid reliability resources;11
(e) While state policy remains strongly in favor of lower-cost and12
cleaner renewable energy generation, federal policy has drastically13
changed to discourage these resources;14
(f) The enactment of H.R. 1, Pub.L. 119-21, in 2025 eliminated15
tax incentives from certain electricity generation sources, including solar,16
while retaining favorable tax incentives for some nonrenewable forms of17
electricity generation;18
(g) H.R. 1, Pub.L. 119-21, also expires federal tax credits for new19
solar generation facilities at the end of 2029 unless a new solar generation20
facility is fully operational by that time;21
(h) Federal tax credits are instrumental in incentivizing the use of22
solar resources for affordable power generation;23
(i) Community solar and dispatchable distributed generation24
facilities take multiple years to design, finance, permit, build, and25
interconnect to the electric grid;26
(j) In addition, the interconnection process often takes multiple27
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years, thus delaying the building of a necessary energy resource and1
endangering the ability of the energy resource to cost-effectively deploy2
before the 2029 expiration of federal tax credits;3
(k) One of the most significant periods of time required in the4
building of new community solar and dispatchable distributed generation5
facilities is the time it takes for the utility to study interconnection impacts6
of the proposed facility and to make necessary developer-funded upgrades7
to the electric grid to enable safe interconnection;8
(l) Innovative ideas that facilitate a quicker and more economic9
interconnection process can greatly assist the deployment of necessary10
community solar and dispatchable distributed generation resources, thus11
assisting electric utilities in providing clean and affordable power to12
ratepayers;13
(m) Maintaining the value of bill credits for community solar14
subscribers, particularly for ratepayers with low incomes, is important15
amid the rising cost of living; and16
(n) As a result of new federal policy, some adjustments need to be17
made to the state's community solar and dispatchable distributed18
generation programs in order to maintain the programs' benefits to the19
electric grid and ratepayers.20
(2) Therefore, it is the intent of the general assembly to:21
(a) Continue to encourage the development of distributed energy22
resources like community solar and dispatchable distributed generation;23
and24
(b) Make adjustments to state law to facilitate the timely and25
cost-effective deployment of distributed energy resources, while26
maintaining the value of such resources for community solar subscribers27
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and particularly for ratepayers with low incomes.1
SECTION 3. In Colorado Revised Statutes, 40-2-127, amend2
(5)(b)(II)(C) as follows:3
40-2-127. Community energy funds - community solar4
gardens - definitions - rules - legislative declaration - applicability -5
repeal.6
(5) Purchases of the output from community solar gardens.7
(b) (II) (C) For a subscriber organization that directs the8
qualifying retail utility to provide the subscriber organization's9
subscribers with a fixed bill credit, the net metering credit is calculated10
by multiplying the subscriber's share of the electricity production from the11
community solar garden by the qualifying retail utility's total aggregate12
retail rate as charged to the subscriber at the time the subscriber13
organization applies for or bids capacity into a utility community solar14
garden program, minus a reasonable charge, as determined by the15
commission at the time the subscriber organization applies for or bids16
capacity into a utility community solar garden program. The charge will17
be used to cover the utility's costs related to: Delivering to the subscriber's18
premises the electricity generated by the community solar garden,19
integrating the solar generation with the utility's system, and20
administering contracts and net metering credits for the community solar21
garden. ON AND AFTER JULY 1, 2026, FOR A SUBSCRIBER ORGANIZATION22
THAT DIRECTS THE QUALIFYING RETAIL UTILITY TO PROVIDE A FIXED BILL23
CREDIT, THE QUALIFYING RETAIL UTILITY SHALL INDEX THE VALUE OF THE24
FIXED BILL CREDIT TO A COMMUNITY SOLAR GARDEN SUBSCRIBER TO25
CHANGING RATE TRENDS BY APPLYING AN ANNUAL ADJUSTMENT26
MECHANISM TO THE BILL CREDIT E QUAL TO THE MOST RECENT ANNUAL27
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CHANGE IN THE QUALIFYING RETAIL UTILITY'S TOTAL AGGREGATE RETAIL1
RATE, INCLUDING ALL BILLED RATE COMPONENTS BASED ON THE2
SUBSCRIBER'S RATE CLASS.3
SECTION 4. In Colorado Revised Statutes, 40-2-135, amend (6);4
and add (7) as follows:5
40-2-135. Retail distributed generation - customers' rights -6
rules - penalties.7
(6) (a) A public utility may recover its prudently incurred costs to8
facilitate a timely interconnection, which costs may include the cost of9
equipment that the public utility procures for future upgrades needed to10
interconnect retail distributed generation resources. A public utility may11
recover the costs of any such equipment inventory as capital work in12
progress if the inventory is projected to be used within five years of13
AFTER its procurement and with a return at the most recently authorized14
weighted average cost of capital.15
(b) A PUBLIC UTILITY SHALL NOT REQUIRE AN INTERCONNECTION16
CUSTOMER TO PAY THE COSTS ASSOCIATED WITH REASONABLE AND17
NECESSARY INTERCONNECTION FACILITIES AND UPGRADES UNTIL THIRTY18
DAYS BEFORE THE PUBLIC UTILITY INCURS THE COSTS. A PUBLIC UTILITY19
MAY REQUIRE AN INTERCONNECTION CUSTOMER TO PROVIDE SECURITY20
FOR THE ESTIMATED FULL COSTS OF INTERCONNECTION AT THE TIME BOTH21
PARTIES EXECUTE AN INTERCONNECTION AGREEMENT. A PUBLIC UTILITY22
SHALL PROVIDE SECURITY OPTIONS TO THE INTERCONNECTION CUSTOMER,23
INCLUDING ACCEPTANCE OF A SURETY BOND OR A LETTER OF CREDIT FROM24
A QUALIFIED PROVIDER.25
(7) (a) O N OR BEFORE JULY 1, 2026, A PUBLIC UTILITY SHALL26
DEVELOP A PROCESS TO ALLOW AN INTERCONNECTION CUSTOMER TO27
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CONTRACT WITH A THIRD PARTY TO PERFORM ANY NEEDED1
INTERCONNECTION STUDY . A PUBLIC UTILITY SHALL RESPOND TO A2
THIRD-PARTY INTERCONNECTION STUDY REQUEST SUBMITTED BY AN3
INTERCONNECTION CUSTOMER WITHIN FIFTEEN DAYS AFTER THE4
SUBMISSION OF THE INTERCONNECTION STUDY REQUEST . AN5
INTERCONNECTION STUDY PERFORMED BY A THIRD PARTY MUST MEET6
APPLICABLE SAFETY, RELIABILITY, LABOR, AND TECHNICAL STANDARDS.7
(b) ON OR BEFORE SEPTEMBER 1, 2026, A PUBLIC UTILITY SHALL8
DEVELOP A PROCESS TO ALLOW FOR THE CONCURRENT PERFORMANCE OF9
ALL NEEDED INTERCONNECTION STUDIES, INCLUDING INTERCONNECTION10
STUDIES PERFORMED BY A CONTRACTED THIRD PARTY . EACH11
INTERCONNECTION STUDY PERFORMED MUST MEET APPLICABLE SAFETY,12
RELIABILITY, LABOR, AND TECHNICAL STANDARDS.13
(c) O N OR BEFORE OCTOBER 1, 2026, A PUBLIC UTILITY SHALL14
DEVELOP A PROCESS TO ALLOW AN INTERCONNECTION CUSTOMER TO15
CONTRACT WITH A THIRD PARTY TO PERFORM ANY UPGRADES NEEDED FOR16
INTERCONNECTION, INCLUDING ENGINEERING , PROCUREMENT , AND17
CONSTRUCTION UPGRADES . A PUBLIC UTILITY SHALL NOT IMPOSE18
UNREASONABLE RESTRICTIONS ON UPGRADES PERFORMED BY A19
CONTRACTED THIRD PARTY AND SHALL RESPOND TO UPGRADE PLANS20
SUBMITTED BY AN INTERCONNECTION CUSTOMER WITHIN THIRTY DAYS21
AFTER THE SUBMISSION OF THE UPGRADE PLANS . UPGRADES THAT ARE22
PERFORMED BY A CONTRACTED THIRD PARTY MUST MEET APPLICABLE23
SAFETY, RELIABILITY, LABOR, AND TECHNICAL STANDARDS.24
(d) A N INTERCONNECTION CUSTOMER MAY APPEAL TO THE25
COMMISSION A PUBLIC UTILITY 'S DENIAL OF THE INTERCONNECTION26
CUSTOMER'S REQUEST TO CONTRACT WITH A THIRD PARTY TO PERFORM AN27
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INTERCONNECTION STUDY OR UPGRADE.1
SECTION 5. Safety clause. The general assembly finds,2
determines, and declares that this act is necessary for the immediate3
preservation of the public peace, health, or safety or for appropriations for4
the support and maintenance of the departments of the state and state5
institutions.6
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