HB 1226

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HOUSE BILL 26-1226
BY REPRESENTATIVE(S) Willford and Froelich, Bacon, Brown,
Camacho, Clifford, Garcia, Goldstein, Hamrick, Mabrey, McCormick,
Nguyen, Sirota, Smith, Stewart R., Story, Titone, Valdez, Velasco,
Woodrow, Zokaie, Boesenecker, English, Jackson, Joseph, Lindsay,
Paschal, Rutinel, McCluskie, Duran, Mauro;
also SENATOR(S) Weissman and Cutter, Kipp, Wallace, Amabile,
Benavidez, Danielson, Hinrichsen, Jodeh, Coleman.
CONCERNING MEASURES TO REDUCE EMISSIONS FROM CERTAIN ELECTRIC
        GENERA TING UNITS IN THE STATE.
Be it enacted by the General Assembly of the State of Colorado:
        SECTION 1. Legislative declaration. ( 1) The general assembly
finds that:
       (a) The federal government has taken a series of actions to override
the choices that Colorado electric utilities and state agencies have made;
      (b) For example, the federal government has ordered a power plant
to remain available past the closure date that 3 Colorado utilities had
decided was in the best interest of their customers;
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
       (c) Federal actions threaten to raise electricity costs for consumers
by requiring utilities to undertake costly repairs for old plants that were
scheduled to close, by potentially crowding out cheaper replacement
resources, and by forcing customers to pay for the replacement resources
and then pay again to keep the plant online that was intended to close;
       (d) The general assembly has previously authorized the use of a
low-cost financing tool, securitization, for certain costs, and it is desirable
to allow the use of this tool for costs to comply with a federal order;
       (e) Federal actions also risk increasing air pollution;
       (f) In addition, certain power plants in Colorado were constructed
several decades ago and have not installed the most modern, effective
pollution controls that more recently built power plants have installed;
       (g) Electric power plants are the largest stationary sources of air
pollution from nitrogen oxides and sulfur dioxide in the state;
       (h) Certain power plants in the state are currently scheduled to close
by the end of 2029;
        (i) In addition, the general assembly has required that a qualifying
retail utility reduce its carbon dioxide emissions 80% by 2030 relative to
2005 levels;
       U) The qualifying retail utility has also planned to replace certain
older power plants in order to reduce customer costs; and
       (k) Resource adequacy and reliability are of paramount importance.
       (2) The general assembly therefore declares that:
        (a) If certain power plants operate past their currently scheduled
retirement dates and into the 2030s, it is appropriate to require that these
older plants be modernized to install the most effective pollution controls
that are currently available;
       (b) In order to understand the cost and environmental impacts of
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certain federal orders, investor-owned utilities and wholesale electric
cooperatives should be required to report on how compliance with certain
federal orders will affect Colorado's ratepayers and environment; and
       ( c)   The public utilities commission should approve enough
resources for a qualifying retail utility to reliably implement its approved
plans to replace older power plants and to meet the 2030 clean energy target
the general assembly has adopted.
       SECTION 2.       In Colorado Revised Statutes, add 25-7-148 as
follows:
      25-7-148. Nitrogen oxides and sulfur dioxide emission limits for
covered electric generating units after 2034 - rules - quarterly reports
- recommendations to the general assembly - definitions.
       (1) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE
REQUIRES:
       (a) (I) "COVERED ELECTRIC GENERATING UNIT" OR "UNIT" MEANS AN
ELECTRIC GENERATING UNIT THAT IS OWNED OR OPERATED BY AN ELECTRIC
UTILITY; THAT IS LOCATED IN THE STATE; AND THAT, IN CALENDAR YEAR
2024, EMITTED TWO HUNDRED TONS OR MORE OF NITROGEN OXIDES, TWO
HUNDRED TONS OR MORE OF SULFUR DIOXIDE, OR BOTH.
       (II) "COVERED ELECTRIC GENERATING UNIT" OR "UNIT" DOES NOT
INCLUDE AN ELECTRIC GENERATING UNIT THAT:
       (A) BURNS NATURAL GAS, FUEL OIL, OR BOTH ONLY; OR
       (B)    HAS BOTH A FLUE GAS DESULFURIZATION SYSTEM AND A
SELECTIVE CATALYTIC REDUCTION SYSTEM INSTALLED.
       (b)    "FINAL RULE" MEANS THE FINAL RULE ADOPTED BY THE
COMMISSION PURSUANT TO SUBSECTION (2)(a) OF THIS SECTION.
       (2) (a) No LATER THAN JULY 2029, THE DIVISION SHALL PROPOSE A
FINAL RULE ESTABLISHING LIMITS ON THE EMISSION OF NITROGEN OXIDES
AND SULFUR DIOXIDE FROM EACH COVERED ELECTRIC GENERATING UNIT;
EXCEPT THAT THE COMMISSION SHALL NOT ESTABLISH EMISSION LIMITS FOR
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ACOVEREDELECTRICGENERATINGUNITTHAT,BEFOREDECEMBER3 l,2029,
HAS CEASED OPERATIONS, CONVERTS TO BURN NATURAL GAS, FUEL OIL, OR
BOTH ONLY, OR HAS BOTH A FLUE GAS DESULFURIZATION SYSTEM AND A
SELECTIVE CATALYTIC REDUCTION SYSTEM INSTALLED.
      (b)   FOR EACH UNIT, THE LIMIT ON THE EMISSION OF NITROGEN
OXIDES IN THE FINAL RULE MUST BE BASED UPON, AND REFLECTIVE OF,
OPERATION OF A SELECTIVE CATALYTIC REDUCTION SYSTEM AT THE UNIT.
      ( c) FOR EACH UNIT, THE LIMIT ON THE EMISSION OF SULFUR DIOXIDE
IN THE FINAL RULE MUST BE BASED UPON, AND REFLECTIVE OF, OPERATION
OF EITHER A FLUE GAS DESULFURIZATION SYSTEM OR A DRY SPRAY
ABSORBER AT THE UNIT.
      (d) FOR EACH UNIT, THE COMMISSION SHALL REQUIRE COMPLIANCE
WITH THE EMISSION LIMITS REQUIRED BY THE FINAL RULE ON AND AFTER A
DATE THAT THE COMMISSION DETERMINES IS PRACTICABLE, WHICH DATE
MUST BE AFTER DECEMBER 31, 2034.
      ( e) A COVERED ELECTRIC GENERA TING UNIT THAT CONVERTS TO
BURN NATURAL GAS, FUEL OIL, OR BOTH ONLY IS NOT SUBJECT TO THE
EMISSION LIMITS IN THE FINAL RULE.
      ( t) A COVERED ELECTRIC GENERATING UNIT THAT PLANS TO OPERATE
AFTER DECEMBER 31, 2034, AND THAT OPERA TES AFTER DECEMBER 31,
2034, SHALL INSTALL AND OPERATE THE POLLUTION CONTROLS DESCRIBED
IN SUBSECTIONS (2)(b) AND (2)( C) OF THIS SECTION ON OR BEFORE
DECEMBER 31, 2034, AND MEET THE EMISSION LIMITS ADOPTED PURSUANT
TO SUBSECTION (2)(a) OF THIS SECTION UNLESS THE UNIT HAS CEASED
OPERATIONS OR HAS CONVERTED TO BURN NATURAL GAS, FUEL OIL, OR BOTH
ONLY ON OR BEFORE DECEMBER 31, 2034.
      (3) THE OWNER OR OPERATOR OF A COVERED ELECTRIC GENERA TING
UNIT SHALL PROVIDE QUARTERLY EMISSION REPORTS TO THE DIVISION
DEMONSTRATING COMPLIANCE WITH THE FINAL RULE.
      (4) (a) IN AN ELECTRIC RESOURCE PLAN FILED WITH THE PUBLIC
UTILITIES COMMISSION IN WHICH A UTILITY EVALUATES THE OPERATION OF
A COVERED ELECTRIC GENERA TING UNIT AFTER DECEMBER 31, 2034, THE
UTILITY SHALL INCLUDE AN ESTIMATE OF THE COSTS TO COMPLY WITH THIS
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SECTION.
       (b) A UTILITY THAT DOES NOT FILE AN ELECTRIC RESOURCE PLAN
WITH THE PUBLIC UTILITIES COMMISSION IS ENCOURAGED TO INCLUDE AN
ESTIMATE OF THE COSTS TO COMPLY WITH THIS SECTION IN AN EVALUATION
OF THE OPERATION OF A COVERED ELECTRIC GENERA TING UNIT AFTER
DECEMBER 31, 2034, AND TO MAKE THE ESTIMATE PUBLICLY AVAILABLE.
       (5) (a) ON AUGUST 1, 2029, THE COMMISSION SHALL SUBMIT TO THE
GENERAL ASSEMBLY A LIST OF ANY COVERED ELECTRIC GENERA TING UNITS
THAT ARE SUBJECT TO AN ORDER ISSUED BY THE UNITED STATES
DEPARTMENT OF ENERGY UNDER SECTION 202 (c) OF THE FEDERAL POWER
ACT.
       (b) IF THERE ARE ANY COVERED ELECTRIC GENERATING UNITS THAT,
AS OF THE DATE OF THE SUBMISSION OF THE LIST DESCRIBED IN SUBSECTION
(5)(a) OF THIS SECTION, ARE SUBJECT TO AN ORDER ISSUED BY THE UNITED
STATES DEPARTMENT OF ENERGY UNDER SECTION 202 (c) OF THE FEDERAL
POWER ACT, THE COMMISSION SHALL ALSO SUBMIT ALONG WITH THE LIST
DESCRIBED IN SUBSECTION (5)(a) OF THIS SECTION RECOMMENDATIONS TO
THE GENERAL ASSEMBLY FROM STAKEHOLDERS, INCLUDING UTILITIES THAT
OWN OR OPERATE COVERED ELECTRIC GENERA TING UNITS, REGARDING
WHETHER TO AMEND THIS SECTION, INCLUDING WHETHER TO POSTPONE THE
EARLIEST COMPLIANCE DEADLINE DESCRIBED IN SUBSECTION (2)( d) OF THIS
SECTION OR ENACT ANY OTHER AMENDMENTS REGARDING COVERED
ELECTRIC GENERATING UNITS SUBJECT TO AN ORDER ISSUED UNDER SECTION
202 (c) OF THE FEDERAL POWER ACT.
      SECTION 3. In Colorado Revised Statutes, add 40-2-141 and
40-2-142 as follows:
       40-2-141. Requirements for electric generating units subject to
a federal order - reporting - cost recovery - applicability- definitions.
       (1) As USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE
REQUIRES:
       (a) "ORDER" MEANS AN ORDER THAT:
       (I)   IS ISSUED BY THE PRESIDENT OF THE UNITED STATES, A
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REPRESENTATIVE OF THE FEDERAL GOVERNMENT, OR A FEDERAL AGENCY;
AND
      (II) REQUIRES A UNIT TO REMAIN AVAILABLE OR CONNECTED TO THE
ELECTRIC GRID TO TRANSMIT OR GENERA TE ELECTRICITY AFTER THE DATE
THAT THE UNIT WAS SCHEDULED TO RETIRE IN ACCORDANCE WITH AN
ELECTRIC RESOURCE PLAN APPROVED BY THE COMMISSION OR THE UTILITY'S
GOVERNING ENTITY PRIOR TO THE ISSUANCE OF THE ORDER.
      (b) "UNIT" MEANS AN ELECTRIC GENERATING UNIT IN THE STATE.
      (c) "WHOLESALE ELECTRIC COOPERATIVE" HAS THE MEANING SET
FORTH IN SECTION 40-2-134 (2).
      (2) (a)   (I)   BEGINNING ONE HUNDRED FIFTY DAYS AFTER THE
ISSUANCE OF AN ORDER OR ONE HUNDRED FIFTY DAYS AFTER THE EFFECTIVE
DATE OF THIS SECTION, WHICHEVER IS LATER, AND CONTINUING EVERY
NINETY   DAYS    UNTIL THE ORDER IS    NO   LONGER   IN   EFFECT,   AN
INVESTOR-OWNED UTILITY OR A WHOLESALE ELECTRIC COOPERATIVE THAT
IS THE OWNER OR OPERATOR OF A UNIT SUBJECT TO THE ORDER SHALL FILE
A REPORT WITH THE COMMISSION IN THE DOCKET OF THE INVESTOR-OWNED
UTILITY'S OR WHOLESALE ELECTRIC COOPERATIVE'S PENDING OR MOST
RECENT ELECTRIC RESOURCE PLAN, WHICH REPORT MUST CONTAIN THE
FOLLOWING INFORMATION, TO THE EXTENT THE INFORMATION IS AVAILABLE:
      (A)   THE TOTAL OPERATIONS AND MAINTENANCE EXPENSES
REQUIRED TO KEEP THE UNIT AVAILABLE OR TO OPERATE THE UNIT DURING
THE PRECEDING NINETY DAYS;
      (B) THE TOTAL CA PITAL EXPENDITURES INCURRED TO KEEP THE UNIT
AVAILABLE OR OPERATE THE UNIT DURING THE PRECEDING NINETY DAYS;
      (C) THE TOTAL NUMBER OF HOURS THAT THE UNIT GENERATED
ELECTRICITY DURING THE PRECEDING NINETY DAYS;
      (D) THE ELECTRICAL OUTPUT OF THE UNIT DURING THE PRECEDING
NINETY DAYS; AND
      (E) ANY CURTAILMENT OF RESOURCES CAUSED BY THE ORDER AND
THE INCREMENTAL COST OF THE CURTAILMENT.
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      (II) AN INVESTOR-OWNED UTILITY OR A WHOLESALE ELECTRIC
COOPERATIVE MAY COMPLY WITH SUBSECTION (2)( a)(I) OF THIS SECTION BY
SUBMITfING INFORMATION TO THE COMMISSION THAT THE OPERATOR FILES
WITH A FEDERAL AGENCY IF THE INFORMATION ADDRESSES THE TOPICS
REQUIRED BY SUBSECTION (2)(a)(I) OF THIS SECTION.
      (Ill) IF AN INVESTOR-OWNED UTILITY IS AN OWNER, BUT NOT THE
OPERATOR, OF A UNIT SUBJECT TO AN ORDER, THE INVESTOR-OWNED UTILITY
SHALL FILE REPORTS WITH THE COMMISSION, ACCORDING TO THE SCHEDULE
SPECIFIED BY SUBSECTION (2)(a)(I) OF THIS SECTION, DISCLOSING THE
INVESTOR-OWNED UTILITY'S SHARE OF THE TOTAL COSTS SPECIFIED IN
SUBSECTIONS (2)(a)(I)(A) AND (2)(a)(l)(B) OF THIS SECTION.
      (b) (I)   EXCEPT AS SET FORTH IN SUBSECTION (2)(b )(II) OF THIS
SECTION, THE COMMISSION SHALL MAKE INFORMATION PROVIDED PURSUANT
TO SUBSECTION (2)(a) OF THIS SECTION PUBLICLY AVAILABLE.
      (II) IF AN INVESTOR-OWNED UTILITY OR WHOLESALE ELECTRIC
COOPERATIVE     DESIGNATES      INFORMATION   PROVIDED    PURSUANT   TO
SUBSECTION (2)(a) OF THIS SECTION AS CONFIDENTIAL, THE COMMISSION
SHALL MAKE THAT INFORMATION AVAILABLE ONLY TO A PERSON THAT HAS
SIGNED   AND     FILED   WITH    THE   COMMISSION   THE   APPROPRIATE
NONDISCLOSURE AGREEMENT REQUIRED BY COMMISSION RULES.
      (3) AN INVESTOR-OWNED UTILITY MAY SUBMIT AN APPLICATION FOR
A FINANCING ORDER PURSUANT TO SECTION 40-41-103 TO RECOVER THE
COSTS OF COM PL YING WITH AN ORDER, EITHER AS A STAND ALONE
APPLICATION OR AS PART OF A BROADER FINANCING ORDER APPLICATION
THAT THE INVESTOR-OWNED UTILITY CHOOSES TO SUBMIT PURSUANT TO
SECTION 40-41-103.
      (4) NOTWITHSTANDING ANY PROVISION OF THIS SECTION TO THE
CONTRARY, THIS SECTION APPLIES ONLY:
      (a) TOTHEOWNEROROPERATOROF A UNIT THAT IS SUBJECTTOAN
ORDER AND THAT IS REQUIRED TO FILE AN ELECTRIC RESOURCE PLAN WITH
THE COMMISSION;
      (b) DURING THE TIME PERIOD THAT AN ORDER IS IN EFFECT; AND
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        (C) TO THE EXTENT NOT INCONSISTENT WITH AN ORDER.
       40-2-142. Requirements for commission review of portfolio
consisting of supply-side resources - applicability - definition.
        (1)   As USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE
REQUIRES, "COVERED ELECTRIC GENERATING UNIT" HAS THE MEANING SET
FORTH IN SECTION 25-7-148 (l)(a).
        (2) ANY DECISION BY THE COMMISSION APPROVING OR MODIFYING
A PORTFOLIO IN AN ELECTRIC RESOURCE PLAN OR ANY RELATED PROCEEDING
IN WHICH THE COMMISSION EVALUATES THE ACQUISITION OF SUPPLY-SIDE
RESOURCES FOR AN INVESTOR-OWNED UTILITY SERVING MORE THAN FIVE
HUNDRED THOUSAND CUSTOMERS MUST APPROVE AN AMOUNT OF
ACCREDITED CAPACITY THAT ENABLES THE INVESTOR-OWNED UTILITY TO
RELIABLY:
        (a)    IMPLEMENT THE RETIREMENT DATES OR OPERATIONAL
RESTRICTIONS IN EFFECT AT THE TIME OF THE COMMISSION'S DECISION
REGARDING COVERED ELECTRIC GENERA TING UNITS; AND
        (b)   COMPLY WITH ANY APPLICABLE STATE LAW REQUIREMENTS,
INCLUDING THE REQUIREMENTS TO REDUCE CARBON DIOXIDE EMISSIONS
DESCRIBED IN SECTION 40-2-125.5.
        (3) THE COMMISSION SHALL DETERMINE IN WRITING IN THE WRITTEN
DECISION APPROVING OR MODIFYING THE PORTFOLIO THAT THE PORTFOLIO
MEETS    THE    ACCREDITED     CAPACITY   REQUIREMENTS     DESCRIBED   IN
SUBSECTION (2) OF THIS SECTION.
        (4) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO ALTER THE
COMMISSION'S AUTHORITY OR OBLIGATION, IN STATUTE OR IN RULE AS OF
THE EFFECTIVE DATE OF THIS SECTION, TO CONSIDER FACTORS IN THE
APPROVAL OF A PORTFOLIO, INCLUDING COST AND RATE IMPACTS, IF THE
PORTFOLIO THE COMMISSION APPROVES COMPLIES WITH THE ACCREDITED
CAPACITY REQUIREMENTS DESCRIBED IN SUBSECTION (2) OF THIS SECTION.
        ( 5) THIS SECTION APPLIES TO AN INVESTOR-OWNED UTILITY SERVING
MORE THAN FIVE HUNDRED THOUSAND CUSTOMERS UNTIL THE DIVISION OF
ADMINISTRATION      IN   THE   DEPARTMENT    OF   PUBLIC   HEALTH   AND
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ENVIRONMENT DETERMINES THAT THE INVESTOR-OWNED UTILITY HAS
ACHIEVED THE CARBON DIOXIDE EMISSION REDUCTIONS DESCRIBED IN
SECTION 40-2-125.5 (4)(c) OR UNTIL THE INVESTOR-OWNED UTILITY HAS
RETIRED EACH COVERED ELECTRIC GENERA TING UNIT OWNED OR OPERATED
BY THE INVESTOR-OWNED UTILITY, WHICHEVER IS LATER.
       SECTION 4. Severability. If any provision of this act or the
application of this act to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of the act that can
be given effect without the invalid provision or application, and to this end
the provisions of this act are declared to be severable.
       SECTION 5. Applicability. This act applies to conduct occurring
on or after the effective date of this act.
       SECTION 6. Safety clause. The general assembly finds,
determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, or safety or for appropriations for
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the support and maintenance of the departments of the state and state
institutions.
J u ~  ames Rashad Coleman, Sr.
SPEAKER OF THE HOUSE  PRESIDENT OF
OF REPRESENTATIVES  THE SENATE
v~~
Vanessa Reilly  Esther van Mourik
CHIEF CLERK OF THE HOUSE  SECRETARY OF
OF REPRESENTATIVES  THE SENATE
      APPROVED ...,_ 7l,-n;Jra; 'J'----hL- 4-t'-, 2.0 .?y «.+ (2:S'ftv\
                            ( te and Time)
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