Senate Bill 23-291 Utility Regulation: A Critical Step in Protecting Coloradans From Future Fossil Fuel Rate Spikes

Denver -- The Colorado legislature introduced SB23-291 last night following a winter of record-breaking energy prices and calls for corporate accountability from the state’s largest public utilities. If approved, the bill would hold utilities accountable for investments in volatile gas systems and price spikes passed on to customers, and will incentivize companies to adopt more cost-efficient methods of electricity production. In addition, the bill would bar utilities from lobbying to influence the outcome of local, state and federal ballot measures, and engaging in related advertising or public relations campaigns. 

Gas bills account for about 80 percent of the overall increase in bills 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 consumer advocates, ratepayers and environmental groups, exposing controversial use of ratepayer money for help with lobbying and advertising. The bill introduced today is the product of that input.

“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.

Groups rallied at the Capitol last  week to call for reform, bringing printed bills of extremely high prices.

Three utilities - Black Hills Energy, Colorado Natural Gas and Xcel Energy - offered testimony in March to the committee. Xcel, a monopoly utility and Colorado’s largest, reported record revenue of $15.3 billion in 2022, gets power from 14 Colorado gas plants, and serves over 1.5 million methane gas customers.  

"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."

Xcel is a significant backer of Coloradans for Energy Access, a non-profit that advocates against the transition away from fossil fuels. Joni Zich, the senior director of gas strategy for Xcel Energy, served as a board member when the group formed in late 2021, and a political contributions report notes Xcel donated $80,000 to the organization in 2022.

“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