SB26-002 • 2026

Energy Affordability

The bill requires an investor-owned electric utility (utility) to submit a proposal to the public utilities commission (PUC) that establishes a first allotment of residential electricity service (FARE

Energy

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Sen. T. Exum, Sen. C. Kipp, Rep. J. Willford
Last action: 2026-04-10
Official status: Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole
Effective date: Not listed

Plain English Breakdown

The effective date for implementing this legislation is not provided in the official source material.

Energy Affordability Bill

This bill requires electric companies to create a program that offers low-income customers electricity at a reduced rate for their basic needs.

What This Bill Does

Requires investor-owned electric utilities to submit plans for a First Allotment of Residential Electricity Service (FARE) program to the Public Utilities Commission (PUC).
The FARE service provides a minimum level of electricity at a lower cost to income-qualified customers based on their basic needs.
Utilities must include details about how much electricity qualifies as a basic need, the cost per kilowatt-hour, and enrollment process in their plans.
The PUC will approve these plans if they are deemed to be in the public interest.

Who It Names or Affects

Investor-owned electric utilities must create and submit FARE service proposals.
Income-qualified utility customers can benefit from reduced electricity rates for basic needs.

Terms To Know

First Allotment of Residential Electricity Service (FARE): A program that provides a minimum level of electricity at a lower cost to income-qualified customers.
Public Utilities Commission (PUC): The regulatory body responsible for approving FARE service proposals from electric utilities.

Limits and Unknowns

The bill does not specify the exact amount of electricity or cost rate that qualifies as a basic need.
It is unclear how the program will be funded and if there are any limits on the number of customers who can enroll.
The effective date for implementing this legislation has not been determined.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

L.005

SEN Transportation & Energy

Passed [*]

Plain English: The amendment adds a new section to Colorado Revised Statutes that sets rules for an energy affordability program, including limits on administrative costs and requirements for utilities to establish percentage-of-income payment plans.

Adds definitions related to the Percentage-of-Income Payment Plan (PIPP) program, such as 'administrative costs,' 'affordable percentage of income,' and 'fixed credit.'
Requires investor-owned utilities to establish a PIPP program for residential customers who qualify based on their income.
Specifies that utilities must publish information about the PIPP program on their public website.

The amendment text is extensive, and some details are too technical or incomplete to explain fully in simple terms without additional context.

L.006

SEN Transportation & Energy

Passed [*]

Plain English: The amendment changes how the Public Utilities Commission (PUC) can determine criteria and exceptions for a utility's proposal on residential electricity service.

Changes the language to allow the PUC to set criteria by order or rule, not just as specified in the bill.
Modifies the condition under which something is determined by the commission by adding flexibility through orders or rules.

The exact nature and extent of the changes made by 'order or rule' are unclear without further details on how the PUC will implement these provisions.

Bill History

2026-04-10 Senate
Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole
2026-03-11 Senate
Senate Committee on Transportation & Energy Refer Amended to Appropriations
2026-01-14 Senate
Introduced In Senate - Assigned to Transportation & Energy

Official Summary Text

The bill requires an investor-owned electric utility (utility) to submit a proposal to the public utilities commission (PUC) that establishes a first allotment of residential electricity service (FARE service) program.
The FARE service program provides a minimum level of electricity at a marginal cost rate for income-qualified utility customers. A FARE service proposal that a utility submits to the PUC must include:
The amount of electricity that qualifies as a minimum level of electricity for an average income-qualified utility customer based on monthly usage to support a customer's basic needs;
A marginal cost rate on a per-kilowatt-hour basis for delivering electricity to a customer, which marginal cost rate must be lower than the residential customer rate that the income-qualified utility customer would normally be charged; and
A description of the process by which an income-qualified utility customer may enroll in the FARE service program.
The PUC shall approve a utility's FARE service proposal if the PUC determines that the proposed FARE service would be in the public interest.
(Note: This summary applies to this bill as introduced.)

Current Bill Text

Read the full stored bill text

Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0061.01 Christopher McMichael x4775 SENATE BILL 26-002
Senate Committees House Committees
Transportation & Energy
A BILL FOR AN ACT
CONCERNING ENERGY AFFORDABILITY , AND , IN CONNECTION101
THEREWITH , ESTABLISHING A FIRST ALLOTMENT OF102
RESIDENTIAL ELECTRICITY SERVICE PROGRAM THAT PROVIDES103
INCOME-QUALIFIED UTILITY CUSTOMERS A MINIMUM LEVEL OF104
ELECTRICITY SERVICE AT A MARGINAL COST RATE.105
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.)
The bill requires an investor-owned electric utility (utility) to
submit a proposal to the public utilities commission (PUC) that
SENATE SPONSORSHIP
Kipp and Exum,
HOUSE SPONSORSHIP
Willford,
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.
establishes a first allotment of residential electricity service (FARE
service) program.
The FARE service program provides a minimum level of
electricity at a marginal cost rate for income-qualified utility customers.
A FARE service proposal that a utility submits to the PUC must include:
! The amount of electricity that qualifies as a minimum level
of electricity for an average income-qualified utility
customer based on monthly usage to support a customer's
basic needs;
! A marginal cost rate on a per-kilowatt-hour basis for
delivering electricity to a customer, which marginal cost
rate must be lower than the residential customer rate that
the income-qualified utility customer would normally be
charged; and
! A description of the process by which an income-qualified
utility customer may enroll in the FARE service program.
The PUC shall approve a utility's FARE service proposal if the
PUC determines that the proposed FARE service would be in the public
interest.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. (1) The general assembly2
finds and declares that:3
(a) Public utilities have operated in Colorado to provide electricity4
service for over 100 years;5
(b) As public utilities, investor-owned electric utilities are granted6
certain privileges for providing electricity service to the public, such as7
operating as a monopoly within their service territories, the ability to8
recover costs from ratepayers, and an almost guaranteed rate of return;9
(c) Demands for and the use of electricity have changed10
dramatically over the past 100 years, and now electricity service is not a11
luxury but an integral and necessary part of daily life; 12
(d) However, expectations upon investor-owned electric utilities13
have not changed to reflect the integral nature that electricity serves in14
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modern life so that everyone can afford and have access to reliable1
electricity;2
(e) Thus, it is necessary for the general assembly to regulate3
public utilities so that all citizens of Colorado, regardless of income, can4
afford electricity service; and5
(f) It is in the public interest for investor-owned electric utilities6
to provide the first allotment of residential electricity service to7
income-qualified utility customers, which service represents a minimum8
level of electricity at a marginal cost rate to customers.9
SECTION 2. In Colorado Revised Statutes, add 40-3-122 as10
follows:11
40-3-122. First allotment of residential electricity (FARE)12
service - marginal cost rate - income-qualified utility customers -13
minimum level of electricity - commission approval - rules -14
definitions.15
(1) Definitions. AS USED IN THIS SECTION, UNLESS THE CONTEXT16
OTHERWISE REQUIRES:17
(a) "FIRST ALLOTMENT OF RESIDENTIAL ELECTRICITY SERVICE" OR18
"FARE SERVICE" MEANS A MINIMUM LEVEL OF ELECTRICITY PROVIDED AT19
A MARGINAL COST RATE TO INCOME-QUALIFIED UTILITY CUSTOMERS.20
(b) "INCOME-QUALIFIED UTILITY CUSTOMER" HAS THE MEANING21
SET FORTH IN SECTION 40-3-106 (1)(d)(II).22
(c) "I NVESTOR-OWNED ELECTRIC UTILITY " MEANS A RETAIL23
ELECTRIC UTILITY IN THE STATE THAT IS REGULATED BY THE COMMISSION24
AND IS NOT A COOPERATIVE ELECTRIC ASSOCIATION OR A MUNICIPALLY25
OWNED UTILITY.26
(d) "M ARGINAL COST RATE " MEANS THE RATE CHARGED TO AN27
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INCOME-QUALIFIED UTILITY CUSTOMER THAT IS APPROVED BY THE1
COMMISSION AS PART OF A UTILITY 'S FARE SERVICE PROPOSAL AND2
ACCOUNTS FOR THE MARGINAL COSTS, ON A PER-UNIT-OF-SERVICE BASIS,3
THAT AN INVESTOR-OWNED ELECTRIC UTILITY INCURS TO PROVIDE THAT4
UNIT OF SERVICE TO AN INCOME -QUALIFIED UTILITY CUSTOMER OVER A5
CONTRACT PERIOD AS IF THE INCOME-QUALIFIED UTILITY CUSTOMER WERE6
A NEW CUSTOMER, WHICH COSTS INCLUDE:7
(I) FUEL;8
(II) PURCHASED POWER;9
(III) OPERATION AND MAINTENANCE COSTS;10
(IV) CAPITAL ADDITIONS;11
(V) OVERHEAD;12
(VI) TAXES; AND13
(VII) FEES.14
(e) "M INIMUM LEVEL OF ELECTRICITY " MEANS THE MINIMUM15
AMOUNT OF ELECTRICITY , MEASURED IN KILOWATT -HOURS, THAT AN16
AVERAGE INCOME-QUALIFIED UTILITY CUSTOMER IN AN INVESTOR-OWNED17
ELECTRIC UTILITY 'S SERVICE TERRITORY WOULD LIKELY USE IN AN18
AVERAGE MONTH TO SUPPORT THE CUSTOMER'S BASIC LIVING NEEDS, AS19
PROPOSED BY AN INVESTOR-OWNED ELECTRIC UTILITY AND APPROVED BY20
THE COMMISSION.21
(2) (a) NOTWITHSTANDING ANY OTHER PROVISION OF ARTICLES 122
TO 7 OF THIS TITLE 40 TO THE CONTRARY, AN INVESTOR-OWNED ELECTRIC23
UTILITY SHALL PROVIDE FARE SERVICE TO INCOME -QUALIFIED UTILITY24
CUSTOMERS IN THE INVESTOR -OWNED ELECTRIC UTILITY 'S SERVICE25
TERRITORY.26
(b) A N INVESTOR -OWNED ELECTRIC UTILITY MAY CHARGE AN27
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INCOME-QUALIFIED UTILITY CUSTOMER ENROLLED IN THE UTILITY'S FARE1
SERVICE PROGRAM THE UTILITY 'S APPROVED RESIDENTIAL ELECTRICITY2
RATE FOR ANY AMOUNT OF ELECTRICITY USED BY THE CUSTOMER THAT IS3
ABOVE THE MINIMUM LEVEL OF ELECTRICITY.4
(3) (a) AS PART OF AN INVESTOR-OWNED ELECTRIC UTILITY'S FIRST5
RATE CASE FILED WITH THE COMMISSION ON OR AFTER JANUARY 1, 2027,6
THE INVESTOR-OWNED ELECTRIC UTILITY SHALL SUBMIT A PROPOSAL TO7
PROVIDE FARE SERVICE TO INCOME -QUALIFIED UTILITY CUSTOMERS IN8
THE INVESTOR-OWNED ELECTRIC UTILITY'S SERVICE TERRITORY.9
(b) T HE FARE SERVICE PROPOSAL SUBMITTED BY AN10
INVESTOR-OWNED ELECTRIC UTILITY PURSUANT TO SUBSECTION (3)(a) OF11
THIS SECTION MUST INCLUDE:12
(I) THE AMOUNT OF ELECTRICITY THAT QUALIFIES AS A MINIMUM13
LEVEL OF ELECTRICITY FOR AN AVERAGE INCOME -QUALIFIED UTILITY14
CUSTOMER IN THE UTILITY'S SERVICE TERRITORY BASED ON THE AVERAGE15
MONTHLY USAGE BY AN INCOME -QUALIFIED UTILITY CUSTOMER TO16
SUPPORT THE CUSTOMER'S BASIC LIVING NEEDS;17
(II) A MARGINAL COST RATE ON A PER-KILOWATT-HOUR BASIS FOR18
DELIVERING ELECTRICITY TO AN INCOME-QUALIFIED UTILITY CUSTOMER19
IN THE UTILITY'S SERVICE TERRITORY; AND20
(III) A DESCRIPTION OF THE PROCESS BY WHICH AN21
INCOME-QUALIFIED UTILITY CUSTOMER MAY ENROLL IN AND RECEIVE22
SERVICE THROUGH THE FARE SERVICE PROGRAM OFFERED BY THE23
INVESTOR-OWNED ELECTRIC UTILITY.24
(4) (a) THE MARGINAL COST RATE INCLUDED IN A FARE SERVICE25
PROPOSAL MUST BE LOWER THAN THE RATE OR RATES THAT THE26
INCOME-QUALIFIED UTILITY CUSTOMER WOULD BE OR CURRENTLY IS27
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SUBJECT TO UNDER THE RESIDENTIAL RATE SET FORTH IN THE1
INVESTOR-OWNED ELECTRIC UTILITY'S TARIFFS IN EFFECT AT THE TIME THE2
INCOME-QUALIFIED UTILITY CUSTOMER APPLIES TO RECEIVE THE FARE3
SERVICE FROM THE INVESTOR-OWNED ELECTRIC UTILITY.4
(b) THE MARGINAL COST RATE INCLUDED IN THE FARE SERVICE5
MUST BE COMPARABLE TO THE INVESTOR -OWNED ELECTRIC UTILITY 'S6
MARGINAL COST OF PROVIDING SERVICE TO A NEW INCOME -QUALIFIED7
UTILITY CUSTOMER.8
(c) T HE IMPLEMENTATION OF THE FARE SERVICE MUST NOT9
DIRECTLY INCREASE THE COST OF UTILITY SERVICE FOR CUSTOMERS OF10
THE INVESTOR-OWNED ELECTRIC UTILITY.11
(d) I F AN INVESTOR -OWNED ELECTRIC UTILITY INCLUDES12
CALCULATIONS AND ANALYSES IN THE UTILITY'S FARE SERVICE PROPOSAL13
THAT INDICATE THAT THE COST OF UTILITY SERVICE FOR OTHER14
CUSTOMERS WILL INCREASE AS A DIRECT RESULT OF THE UTILITY15
IMPLEMENTING THE FARE SERVICE , THE COMMISSION , IN ITS16
DETERMINATION OF THE UTILITY 'S ANTICIPATED PROFIT FOR THE RATE17
CASE PERIOD, SHALL CALCULATE THAT ANTICIPATED PROFIT BASED ON AN18
ANTICIPATED PROFIT AMOUNT REDUCED BY THE DOCUMENTED19
COST-OF-SERVICE IMPACT ON OTHER CUSTOMERS RESULTING FROM THE20
IMPLEMENTATION OF THE UTILITY'S FARE SERVICE.21
(5) THE COMMISSION SHALL APPROVE A FARE SERVICE PROPOSAL22
SUBMITTED IN COMPLIANCE WITH SUBSECTIONS (3) AND (4) OF THIS23
SECTION IF THE COMMISSION DETERMINES THAT THE PROPOSAL IS IN THE24
PUBLIC INTEREST.25
(6) (a) T HE COMMISSION MAY APPROVE AN INVESTOR -OWNED26
ELECTRIC UTILITY'S FARE SERVICE PROPOSAL AND SET A MINIMUM AND27
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MAXIMUM AMOUNT FOR THE MARGINAL COST RATE THAT IS CONSISTENT1
WITH THE REQUIREMENTS OF SUBSECTIONS (2), (3), AND (4) OF THIS2
SECTION.3
(b) T HE COMMISSION MAY ADOPT ANY RULES NECESSARY TO4
IMPLEMENT THIS SECTION.5
(7) RATES CHARGED TO INCOME-QUALIFIED UTILITY CUSTOMERS6
UNDER AN INVESTOR -OWNED ELECTRIC UTILITY 'S APPROVED FARE7
SERVICE SHALL NOT BE DEEMED UNFAIR, UNJUST, OR DISCRIMINATORY IN8
VIOLATION OF SECTION 40-3-101 (1).9
SECTION 3. Act subject to petition - effective date. This act10
takes effect at 12:01 a.m. on the day following the expiration of the11
ninety-day period after final adjournment of the general assembly (August12
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a13
referendum petition is filed pursuant to section 1 (3) of article V of the14
state constitution against this act or an item, section, or part of this act15
within such period, then the act, item, section, or part will not take effect16
unless approved by the people at the general election to be held in17
November 2026 and, in such case, will take effect on the date of the18
official declaration of the vote thereon by the governor.19
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