April 19, 2023
The Colorado legislature introduced SB23-291 following a winter of record-breaking gas rates and customer bills from the state’s largest public utilities. If approved, the bill would incentivize companies to adopt more cost-efficient methods of electricity production and enact measures to protect customers from volatile gas price spikes. These initiatives will ensure that as utilities reduce their greenhouse gas emissions, Colorado customers see cost savings.
Gas bills accounted for about 80% of the overall increase in energy costs for the average customer in Colorado this winter, according to the Colorado Public Utilities Commission staff.
In a historic first, the Colorado Legislature responded to months of rising utility rates by appointing a Joint Select Committee on Rising Utility Rates. In three public hearings held in March, the committee heard testimony from three utilities – Black Hills Energy, Colorado Natural Gas and Xcel Energy – consumer advocates, ratepayers and environmental groups. WRA’s testimony focused on strategies to minimize customers’ exposure to volatile gas prices, such as removing subsidies for utilities to expand the gas distribution system and supporting cost-effective, low-carbon alternatives to continued reliance on fossil gas.
“It’s critical that gas utilities plan for a decarbonized future and are not subsidizing fossil fuel infrastructure at the expense of cleaner technologies,” said Meera Fickling, senior climate policy analyst at WRA. “This legislation makes sure that Coloradans aren’t inadvertently incurring the costs of connecting new buildings to the gas system, particularly when all-electric new buildings are cheaper, healthier, and a key part of meeting our climate goals.”
The proposed bill advances several policy solutions designed to protect Colorado ratepayers from the burden of increasing gas utility bills, including:
- A requirement that investor-owned utilities, such as Xcel Energy and Black Hills Energy, must file gas price risk management plans with the Public Utilities Commission by Nov. 1 that address the volatility of fuel costs that are subsequently recovered from ratepayers.
- The adoption of new commission rules by Jan. 1, 2025, that help protect ratepayers from volatile gas prices by, among other measures, incentivizing utilities to improve the cost efficiency of electricity production while minimizing fuel costs.
- Reducing unnecessary incentives for gas infrastructure investments by utilities.
- Ending expensive subsidies for fossil gas infrastructure and removing barriers to cleaner electric appliances.
- Ending penalties imposed on utility customers that voluntarily terminate gas service.
- Updating standards of the Colorado Public Utilities Commission to ensure the appropriate valuation of future investments proposed by utilities.
- Limiting how utilities can recoup the costs for advertising, lobbying, and legal expenses associated with public relations campaigns designed to support higher utility rates.
“Xcel Energy says it’s not responsible for high gas prices when the company itself decides to keep customers hooked on a volatile and climate-wrecking fuel,” said Sarah Snead, Senior Campaign Representative at Sierra Club. “The solution is simple. We need to take steps to transition from methane gas to cheaper, efficient all-electric alternatives, especially for low-income customers who face the highest energy burden.”
“With less than 30 years to get off fossil fuels and avoid the worst climate impacts, our investments need to change accordingly,” said Alana Miller, Colorado Policy Director at NRDC (Natural Resources Defense Council). “This bill is a critical step in winding down gas system investments, bringing us closer to a future of cleaner air, healthier homes, and lower bills.”
The lead sponsors of SB23-291 are Sens. Steve Fenberg and Lisa Cutter, and Reps. Chris deGruy Kennedy and Matthew Martinez. The bill now heads to the Senate Finance Committee.