The clock is ticking on executing the clean energy transition.
Colorado has set ambitious greenhouse gas emissions goals, and its new clean heat standard is leading the way in setting emission reduction targets for gas utilities. This nationally leading policy also takes us into uncharted territory. Policy becoming reality requires continuous focused and strategic work to generate momentum that leads to actual on-the-ground impacts. To make sure our clean heat vision becomes a reality, WRA has focused our efforts on demonstrating an actionable path to decarbonization that is cost-effective and achievable by 2030.
In 2021, Colorado passed Senate Bill 21-264 requiring Colorado’s gas utilities to reduce their greenhouse gas emissions by 4% by 2025 and 22% by 2030. For months prior to passage of the bill, WRA legal and technical experts participated extensively in the stakeholder process, providing detailed input on the legislation to strengthen the emissions reduction targets aligned with climate science, and to create a nation-leading policy foundation for gas utilities to reliably and equitably implement a clean heat plan with approved emissions reduction measures, tracked and measured with robust accounting.
Colorado is the first state in the nation to require that gas utilities meet these targets, which are called clean heat standards. And the first utility required to file a clean heat plan with any state Public Utility Commission was Xcel Energy, Colorado’s largest electricity and gas provider.
Since this process is the first opportunity for the PUC to engage in rulemaking to reduce emissions on a gas utility system, there was no established template for how gas utilities can and should meet the greenhouse gas reduction targets. WRA developed a data-driven clean heat strategy where a transition to efficient electric appliances, along with wide-scale weatherization, would take center stage.
This work led to the publication and release of WRA’s position paper A Path to Pollution-Free Buildings: Meeting Xcel’s 2030 Gas Decarbonization Goals. The report, developed by WRA, NRDC, and SWEEP, recommends measures to drive a steep reduction in emissions from Xcel and demonstrates how the gas utility can meet Colorado’s targets in a way that delivers the most emissions reductions per ratepayer dollar. The report demonstrated that to achieve its 2030 goal, Xcel must rapidly increase adoption of efficient electric appliances — heat pumps and heat-pump water heaters — and weatherize tens of thousands of homes and businesses.
By jettisoning gas-burning appliances, which emit NOx and other pollutants, these efforts would not only dramatically reduce climate-warming pollution from natural gas used to heat and cool our homes, it would also improve indoor and outdoor air quality throughout the state, particularly for communities of color and lower-income neighborhoods that have historically experienced a disproportionate impact from pollution.
The report, published days before Xcel filed its clean heat plan, immediately shaped the debate on the future of decarbonization in Colorado. WRA kept the conversation moving by hosting a webinar on our report’s findings, attracting engagement from key decision makers.
In September, WRA further built the case for rapid building electrification by releasing a third-party analysis highlighting the costs and emissions-reduction potential of space- and water-heating decarbonization in Colorado, Nevada, and New Mexico. The analysis showed that building electrification is the most cost-effective decarbonization measure that utilities across the Southwest can deploy.
The analysis was accompanied by a new Building Decarbonization Analysis tool, a spreadsheet-based resource that allows users to analyze the gas utility costs and emissions reductions associated with space- and water-heating and carbon emission-reduction strategies in the residential building sector.
Our report, follow-up analysis, and new analysis tool provide regulators and lawmakers in Colorado and in other states with a wealth of easily accessible data and tools that illustrate the benefits and cost-effectiveness of accelerated adoption of electric appliances and beneficial electrification (replacing direct fossil fuel use with electricity in a way that reduces overall emissions and energy costs). As other Colorado utilities prepare to file clean heat plans as required by the 2021 law, and as other states consider following Colorado’s lead, WRA has established itself as a thought leader in this rapidly evolving policy arena.
As 2023 comes to a close, the Colorado utility regulators face a choice between two futures.
One, outlined by WRA and partners, facilitates a transition away from fossil fuels through the expanded and accelerated use of renewable sources. The other would involve maintaining our reliance on fossil fuels and other technologies or schemes (like “certified” fossil gas and carbon offsets) that have not proven to reduce emissions from the gas distribution system and provide no meaningful path to full decarbonization of Colorado’s gas system.
To hit Colorado’s climate goals, WRA is creating the policy framework that will drive a near-term market transformation. WRA will continue to be at the center of the debate, keeping the urgency of decarbonization clear and helping decision makers make informed choices that protect the health and well-being of all Coloradans.
