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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0324.01 Sarah Lozano x3858 HOUSE BILL 26-1226
House Committees Senate Committees
Energy & Environment
A BILL FOR AN ACT
CONCERNING MEASURES TO REDUCE EMISSIONS FROM CERTAIN101
ELECTRIC GENERATING UNITS 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.)
Section 2 of the bill requires the air quality control commission,
no later than December 31, 2029, to adopt a final rule (rule) establishing
certain limits on the emission of nitrogen oxides and sulfur dioxide from
an electric generating unit (unit) that is owned or operated by an electric
utility, is located in the state, and emitted 200 tons or more of nitrogen
oxides, sulfur dioxide, or both in calendar year 2024 (covered electric
HOUSE SPONSORSHIP
Willford and Froelich, Bacon, Brown, Camacho, Clifford, Garcia, Goldstein, Hamrick,
Mabrey, McCormick, Nguyen, Sirota, Smith, St ewart R., Story, Titone, Valdez, Velasco,
Woodrow, Zokaie
SENATE SPONSORSHIP
Weissman and Cutter, Kipp, Wallace
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.
generating unit). The rule must require compliance with the emission
limits as soon as practicable after December 31, 2030, and must not cover
units that have ceased operations, burn natural gas or fuel oil only, or
have certain systems installed before December 31, 2029. The owner or
operator of a covered electric generating unit is required to provide
quarterly emission reports showing compliance with the rule to the
division of administration in the department of public health and
environment (division).
Section 3 requires an investor-owned utility or wholesale electric
cooperative that is the owner or operator of a unit, beginning 150 days
after the issuance of a federal order requiring the unit to remain operating
after the unit was scheduled to retire (order) and continuing every 90 days
until the order is no longer in effect, to file a report with the public
utilities commission (commission) that contains certain information about
the costs to operate the unit and the amount of electricity generated by the
unit. The commission must make these reports publicly available.
Section 3 also allows an investor-owned utility to submit an
application for a financing order to recover the costs of complying with
an order.
Section 3 also requires that, if the commission issues a written
decision approving a portfolio that consists of supply-side resources for
an investor-owned utility serving more than 500,000 customers, the
commission must approve a total amount of accredited capacity for the
investor-owned utility to reliably implement certain retirement dates or
operational restrictions applicable to the investor-owned utility's covered
electric generating unit and comply with any applicable carbon dioxide
emission reduction requirements. This accredited capacity requirement
applies to an investor-owned utility serving more than 500,000 customers
until the division determines that the investor-owned utility has achieved
certain carbon dioxide emission reductions or until the investor-owned
utility has retired all covered electric generating units, whichever is later.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. (1) The general assembly2
finds that:3
(a) The federal government has taken a series of actions to4
override the choices that Colorado electric utilities and state agencies5
have made;6
(b) For example, the federal government has ordered a power7
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plant to remain available past the closure date that 3 Colorado utilities had1
decided was in the best interest of their customers;2
(c) Federal actions threaten to raise electricity costs for consumers3
by requiring utilities to undertake costly repairs for old plants that were4
scheduled to close, by potentially crowding out cheaper replacement5
resources, and by forcing customers to pay for the replacement resources6
and then pay again to keep the plant online that was intended to close;7
(d) The general assembly has previously authorized the use of a8
low-cost financing tool, securitization, for certain costs, and it is desirable9
to allow the use of this tool for costs to comply with a federal order;10
(e) Federal actions also risk increasing air pollution;11
(f) In addition, certain power plants in Colorado were constructed12
several decades ago and have not installed the most modern, effective13
pollution controls that more recently built power plants have installed;14
(g) Electric power plants are the largest stationary sources of air15
pollution from nitrogen oxides and sulfur dioxide in the state;16
(h) Certain power plants in the state are currently scheduled to17
close by the end of 2029;18
(i) In addition, the general assembly has required that a qualifying19
retail utility reduce its carbon dioxide emissions 80% by 2030 relative to20
2005 levels;21
(j) The qualifying retail utility has also planned to replace certain22
older power plants in order to reduce customer costs; and23
(k) Resource adequacy and reliability are of paramount24
importance.25
(2) The general assembly therefore declares that:26
(a) If certain power plants operate past their currently scheduled27
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retirement dates and into the 2030s, it is appropriate to require that these1
older plants be modernized to install the most effective pollution controls2
that are currently available;3
(b) In order to understand the cost and environmental impacts of4
certain federal orders, investor-owned utilities and wholesale electric5
cooperatives should be required to report on how compliance with certain6
federal orders will affect Colorado's ratepayers and environment; and7
(c) The public utilities commission should approve enough8
resources for a qualifying retail utility to reliably implement its approved9
plans to replace older power plants and to meet the 2030 clean energy10
target the general assembly has adopted.11
SECTION 2. In Colorado Revised Statutes, add 25-7-148 as12
follows:13
25-7-148. Nitrogen oxides and sulfur dioxide emission limits14
for covered electric generating units after 2030 - rules - quarterly15
reports - definitions.16
(1) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE17
REQUIRES:18
(a) (I) "COVERED ELECTRIC GENERATING UNIT" OR "UNIT" MEANS19
AN ELECTRIC GENERATING UNIT THAT IS OWNED OR OPERATED BY AN20
ELECTRIC UTILITY ; THAT IS LOCATED IN THE STATE ; AND THAT , IN21
CALENDAR YEAR 2024, EMITTED TWO HUNDRED TONS OR MORE OF22
NITROGEN OXIDES, TWO HUNDRED TONS OR MORE OF SULFUR DIOXIDE, OR23
BOTH.24
(II) "COVERED ELECTRIC GENERATING UNIT" OR "UNIT" DOES NOT25
INCLUDE AN ELECTRIC GENERATING UNIT THAT:26
(A) BURNS NATURAL GAS OR FUEL OIL ONLY; OR27
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(B) H AS BOTH A FLUE GAS DESULFURIZATION SYSTEM AND A1
SELECTIVE CATALYTIC REDUCTION SYSTEM INSTALLED.2
(b) "F INAL RULE " MEANS THE FINAL RULE ADOPTED BY THE3
COMMISSION PURSUANT TO SUBSECTION (2)(a) OF THIS SECTION.4
(2) (a) N O LATER THAN DECEMBER 31, 2029, THE COMMISSION5
SHALL ADOPT A FINAL RULE ESTABLISHING LIMITS ON THE EMISSION OF6
NITROGEN OXIDES AND SULFUR DIOXIDE FROM EACH COVERED ELECTRIC7
GENERATING UNIT; EXCEPT THAT THE COMMISSION SHALL NOT ESTABLISH8
EMISSION LIMITS FOR A COVERED ELECTRIC GENERATING UNIT THAT ,9
BEFORE DECEMBER 31, 2029, HAS CEASED OPERATIONS , CONVERTS TO10
BURN NATURAL GAS OR FUEL OIL ONLY , OR HAS BOTH A FLUE GAS11
DESULFURIZATION SYSTEM AND A SELECTIVE CATALYTIC REDUCTION12
SYSTEM INSTALLED.13
(b) F OR EACH UNIT , THE LIMIT ON THE EMISSION OF NITROGEN14
OXIDES IN THE FINAL RULE MUST BE BASED UPON , AND REFLECTIVE OF ,15
OPERATION OF A SELECTIVE CATALYTIC REDUCTION SYSTEM AT THE UNIT.16
(c) F OR EACH UNIT , THE LIMIT ON THE EMISSION OF SULFUR17
DIOXIDE IN THE FINAL RULE MUST BE BASED UPON , AND REFLECTIVE OF,18
OPERATION OF EITHER A FLUE GAS DESULFURIZATION SYSTEM OR A DRY19
SPRAY ABSORBER AT THE UNIT.20
(d) FOR EACH UNIT, THE COMMISSION SHALL REQUIRE COMPLIANCE21
WITH THE EMISSION LIMITS REQUIRED BY THE FINAL RULE ON AND AFTER22
A DATE THAT THE COMMISSION DETERMINES IS PRACTICABLE, WHICH DATE23
MUST BE AFTER DECEMBER 31, 2030.24
(e) A COVERED ELECTRIC GENERATING UNIT THAT CONVERTS TO25
BURN NATURAL GAS OR FUEL OIL ONLY IS NOT SUBJECT TO THE EMISSION26
LIMITS IN THE FINAL RULE.27
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(3) T HE OWNER OR OPERATOR OF A COVERED ELECTRIC1
GENERATING UNIT SHALL PROVIDE QUARTERLY EMISSION REPORTS TO THE2
DIVISION DEMONSTRATING COMPLIANCE WITH THE FINAL RULE.3
(4) (a) IN AN ELECTRIC RESOURCE PLAN FILED WITH THE PUBLIC4
UTILITIES COMMISSION IN WHICH A UTILITY EVALUATES THE OPERATION OF5
A COVERED ELECTRIC GENERATING UNIT AFTER DECEMBER 31, 2030, THE6
UTILITY SHALL INCLUDE AN ESTIMATE OF THE COSTS TO COMPLY WITH THIS7
SECTION.8
(b) A UTILITY THAT DOES NOT FILE AN ELECTRIC RESOURCE PLAN9
WITH THE PUBLIC UTILITIES COMMISSION IS ENCOURAGED TO INCLUDE AN10
ESTIMATE OF THE COSTS TO COMPLY WITH THIS SECTION IN AN11
EVALUATION OF THE OPERATION OF A COVERED ELECTRIC GENERATING12
UNIT AFTER DECEMBER 31, 2030, AND TO MAKE THE ESTIMATE PUBLICLY13
AVAILABLE.14
SECTION 3. In Colorado Revised Statutes, add 40-2-140 and15
40-2-141 as follows:16
40-2-140. Requirements for electric generating units subject17
to a federal order - reporting - cost recovery - applicability -18
definitions.19
(1) AS USED IN THIS SECTION , UNLESS THE CONTEXT OTHERWISE20
REQUIRES:21
(a) "ORDER" MEANS AN ORDER THAT:22
(I) I S ISSUED BY THE PRESIDENT OF THE UNITED STATES, A23
REPRESENTATIVE OF THE FEDERAL GOVERNMENT, OR A FEDERAL AGENCY;24
AND25
(II) REQUIRES A UNIT TO REMAIN AVAILABLE OR CONNECTED TO26
THE ELECTRIC GRID TO TRANSMIT OR GENERATE ELECTRICITY AFTER THE27
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DATE THAT THE UNIT WAS SCHEDULED TO RETIRE IN ACCORDANCE WITH1
AN ELECTRIC RESOURCE PLAN APPROVED BY THE COMMISSION OR THE2
UTILITY'S GOVERNING ENTITY PRIOR TO THE ISSUANCE OF THE ORDER.3
(b) "UNIT" MEANS AN ELECTRIC GENERATING UNIT IN THE STATE.4
(c) "WHOLESALE ELECTRIC COOPERATIVE" HAS THE MEANING SET5
FORTH IN SECTION 40-2-134 (2).6
(2) (a) (I) B EGINNING ONE HUNDRED FIFTY DAYS AFTER THE7
ISSUANCE OF AN ORDER OR ONE HUNDRED FIFTY DAYS AFTER THE8
EFFECTIVE DATE OF THIS SECTION, WHICHEVER IS LATER, AND CONTINUING9
EVERY NINETY DAYS UNTIL THE ORDER IS NO LONGER IN EFFECT , AN10
INVESTOR-OWNED UTILITY OR A WHOLESALE ELECTRIC COOPERATIVE THAT11
IS THE OWNER OR OPERATOR OF A UNIT SUBJECT TO THE ORDER SHALL FILE12
A REPORT WITH THE COMMISSION IN THE DOCKET OF THE13
INVESTOR-OWNED UTILITY 'S OR WHOLESALE ELECTRIC COOPERATIVE 'S14
PENDING OR MOST RECENT ELECTRIC RESOURCE PLAN , WHICH REPORT15
MUST CONTAIN THE FOLLOWING INFORMATION , TO THE EXTENT THE16
INFORMATION IS AVAILABLE:17
(A) T HE TOTAL OPERATIONS AND MAINTE NANCE EXPENSES18
REQUIRED TO KEEP THE UNIT AVAILABLE OR TO OPERATE THE UNIT DURING19
THE PRECEDING NINETY DAYS;20
(B) THE TOTAL CAPITAL EXPENDITURES INCURRED TO KEEP THE21
UNIT AVAILABLE OR OPERATE THE UNIT DURING THE PRECEDING NINETY22
DAYS;23
(C) THE TOTAL NUMBER OF HOURS THAT THE UNIT GENERATED24
ELECTRICITY DURING THE PRECEDING NINETY DAYS;25
(D) THE ELECTRICAL OUTPUT OF THE UNIT DURING THE PRECEDING26
NINETY DAYS; AND27
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(E) ANY CURTAILMENT OF RESOURCES CAUSED BY THE ORDER AND1
THE INCREMENTAL COST OF THE CURTAILMENT.2
(II) A N INVESTOR -OWNED UTILITY OR A WHOLESALE ELECTRIC3
COOPERATIVE MAY COMPLY WITH SUBSECTION (2)(a)(I) OF THIS SECTION4
BY SUBMITTING INFORMATION TO THE COMMISSION THAT THE OPERATOR5
FILES WITH A FEDERAL AGENCY IF THE INFORMATION ADDRESSES THE6
TOPICS REQUIRED BY SUBSECTION (2)(a)(I) OF THIS SECTION.7
(III) IF AN INVESTOR-OWNED UTILITY IS AN OWNER, BUT NOT THE8
OPERATOR, OF A UNIT SUBJECT TO AN ORDER , THE INVESTOR -OWNED9
UTILITY SHALL FILE REPORTS WITH THE COMMISSION, ACCORDING TO THE10
SCHEDULE SPECIFIED BY SUBSECTION (2)(a)(I) OF THIS SECTION ,11
DISCLOSING THE INVESTOR-OWNED UTILITY'S SHARE OF THE TOTAL COSTS12
SPECIFIED IN SUBSECTIONS (2)(a)(I)(A) AND (2)(a)(I)(B) OF THIS SECTION.13
(b) (I) E XCEPT AS SET FORTH IN SUBSECTION (2)(b)(II) OF THIS14
SECTION, THE COMMISSION SHALL MAKE INFORMATION PROVIDED15
PURSUANT TO SUBSECTION (2)(a) OF THIS SECTION PUBLICLY AVAILABLE.16
(II) I F AN INVESTOR -OWNED UTILITY OR WHOLESALE ELECTRIC17
COOPERATIVE DESIGNATES INFORMATION PROVIDED PURSUANT TO18
SUBSECTION (2)(a) OF THIS SECTION AS CONFIDENTIAL, THE COMMISSION19
SHALL MAKE THAT INFORMATION AVAILABLE ONLY TO A PERSON THAT HAS20
SIGNED AND FILED WITH THE COMMISSION THE APPROPRIATE21
NONDISCLOSURE AGREEMENT REQUIRED BY COMMISSION RULES.22
(3) AN INVESTOR-OWNED UTILITY MAY SUBMIT AN APPLICATION23
FOR A FINANCING ORDER PURSUANT TO SECTION 40-41-103 TO RECOVER24
THE COSTS OF COMPLYING WITH AN ORDER , EITHER AS A STANDALONE25
APPLICATION OR AS PART OF A BROADER FINANCING ORDER APPLICATION26
THAT THE INVESTOR-OWNED UTILITY CHOOSES TO SUBMIT PURSUANT TO27
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SECTION 40-41-103.1
(4) NOTWITHSTANDING ANY PROVISION OF THIS SECTION TO THE2
CONTRARY, THIS SECTION APPLIES ONLY:3
(a) TO THE OWNER OR OPERATOR OF A UNIT THAT IS SUBJECT TO AN4
ORDER AND THAT IS REQUIRED TO FILE AN ELECTRIC RESOURCE PLAN WITH5
THE COMMISSION;6
(b) DURING THE TIME PERIOD THAT AN ORDER IS IN EFFECT; AND7
(c) TO THE EXTENT NOT INCONSISTENT WITH AN ORDER.8
40-2-141. Requirements for commission review of portfolio9
consisting of supply-side resources - applicability - definition.10
(1) AS USED IN THIS SECTION , UNLESS THE CONTEXT OTHERWISE11
REQUIRES, "COVERED ELECTRIC GENERATING UNIT" HAS THE MEANING SET12
FORTH IN SECTION 25-7-148 (1)(a).13
(2) IF THE COMMISSION ISSUES A WRITTEN DECISION APPROVING A14
PORTFOLIO THAT CONSISTS IN WHOLE OR IN PART OF SUPPLY -SIDE15
RESOURCES FOR AN INVESTOR-OWNED UTILITY SERVING MORE THAN FIVE16
HUNDRED THOUSAND CUSTOMERS , THE COMMISSION SHALL APPROVE A17
TOTAL AMOUNT OF ACCREDITED CAPACITY, WHICH CAN COME FROM ANY18
MIX OF SUPPLY-SIDE OR DEMAND -SIDE RESOURCES , THAT IS SUFFICIENT19
FOR THE INVESTOR-OWNED UTILITY TO RELIABLY:20
(a) I MPLEMENT THE RETIREMENT DATES OR OPERATIONAL21
RESTRICTIONS IN EFFECT AT THE TIME OF THE COMMISSION 'S DECISION22
REGARDING A COVERED ELECTRIC GENERATING UNIT OWNED OR OPERATED23
BY THE INVESTOR-OWNED UTILITY; AND24
(b) COMPLY WITH ANY APPLICABLE STATE LAW REQUIREMENTS TO25
ACHIEVE CARBON DIOXIDE EMISSION REDUCTIONS , INCLUDING THE26
REQUIREMENTS DESCRIBED IN SECTION 40-2-125.5.27
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(3) THE COMMISSION SHALL CERTIFY IN WRITING IN THE WRITTEN1
DECISION APPROVING THE PORTFOLIO THAT THE PORTFOLIO MEETS THE2
ACCREDITED CAPACITY REQUIREMENTS DESCRIBED IN SUBSECTION (2) OF3
THIS SECTION.4
(4) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO ALTER THE5
COMMISSION'S AUTHORITY OR OBLIGATION, IN STATUTE OR IN RULE AS OF6
THE EFFECTIVE DATE OF THIS SECTION , TO CONSIDER FACTORS IN THE7
APPROVAL OF A PORTFOLIO, INCLUDING COST AND RATE IMPACTS, IF THE8
PORTFOLIO THE COMMISSION APPROVES COMPLIES WITH THE ACCREDITED9
CAPACITY REQUIREMENTS DESCRIBED IN SUBSECTION (2) OF THIS SECTION.10
(5) T HIS SECTION APPLIES TO AN INVESTOR -OWNED UTILITY11
SERVING MORE THAN FIVE HUNDRED THOUSAND CUSTOMERS UNTIL THE12
DIVISION OF ADMINISTRATION IN THE DEPARTMENT OF PUBLIC HEALTH AND13
ENVIRONMENT DETERMINES THAT THE INVESTOR -OWNED UTILITY HAS14
ACHIEVED THE CARBON DIOXIDE EMISSION REDUCTIONS DESCRIBED IN15
SECTION 40-2-125.5 (4)(c) OR UNTIL THE INVESTOR-OWNED UTILITY HAS16
RETIRED EACH COVERED ELECTRIC GENERATING UNIT OWNED OR17
OPERATED BY THE INVESTOR-OWNED UTILITY, WHICHEVER IS LATER.18
SECTION 4. Severability. If any provision of this act or the19
application of this act to any person or circumstance is held invalid, the20
invalidity does not affect other provisions or applications of the act that21
can be given effect without the invalid provision or application, and to22
this end the provisions of this act are declared to be severable.23
SECTION 5. Applicability. This act applies to conduct occurring24
on or after the effective date of this act.25
SECTION 6. Safety clause. The general assembly finds,26
determines, and declares that this act is necessary for the immediate27
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preservation of the public peace, health, or safety or for appropriations for1
the support and maintenance of the departments of the state and state2
institutions.3
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