2023 Colorado Revised Statutes › Title 40 - UTILITIES (§§ 40-1-101 — 40-43-104) › PUBLIC UTILITIES (§§ 40-1-101 — 40-17.5-105) › GENERAL AND ADMINISTRATIVE (§§ 40-1-101 — 40-9.8-104) › Article 4 - SERVICE AND EQUIPMENT (§§ 40-4-101 — 40-4-121) › Section 40-4-121 - Thermal energy network projects - pilot program for large gas utilities - application - commission proceeding - reporting - exemption from regulation for local government- or campus-owned thermal energy networks - definitions

(1)
As used in this section, unless the context otherwise requires:
(a)
(I)
"Campus" means a collection of two or more buildings that are owned and operated by the same person, that have a shared purpose and function as a single property, that do not lease space to tenants, and that do not provide energy or heat services for a fee.
(II)
"Campus" includes two or more of the buildings that comprise the capitol complex, as described in section
24-82-101 (3)(f)
.
(b)
"Disproportionately impacted community" has the meaning set forth in section
24-4-109 (2)(b)(II)
.
(c)
"Gas utility" means a gas utility in the state that the commission regulates with respect to rates and charges.
(d)
"Large gas utility" means a gas utility that serves more than five hundred thousand customers.
(e)
"Local government" means a statutory or home rule city, town, county, or city and county.
(f)
"Thermal energy" has the meaning set forth in section
40-3.2-108 (2)(r)
.
(g)
"Thermal energy network" has the meaning set forth in section
40-3.2-108 (2)(s)
.
(h)
"Thermal energy system" has the meaning set forth in section
40-3.2-108 (2)(t)
.
(2)
(a)
Except as provided in subsection (3) of this section, a gas utility that seeks to offer thermal energy network service to its customers must propose developing a thermal energy network by a separate application to the commission that is not included in the gas utility's application to the commission for approval of a clean heat plan pursuant to section
40-3.2-108
or a gas demand-side management program plan pursuant to section
40-3.2-103 (3)
or as part of a DSM strategic issues application pursuant to section
40-3.2-103 (1)
.
(b)
In considering whether to approve a gas utility's application to offer thermal energy network service, the commission shall consider the long-term effects that the proposed thermal energy network would have on the state's utility workforce.
(3)
(a)
On or before September 1, 2024, a large gas utility shall submit to the commission for review and approval at least one pilot program, consisting of one or more pilot projects, to provide thermal energy service in its service area.
(b)
A large gas utility may propose more than one pilot thermal energy network program pursuant to this subsection (3) by filing separate applications for review and approval of additional pilot programs with the commission on or before September 1, 2026.
(c)
In developing a pilot program proposal, a large gas utility shall propose as part of the proposed pilot program at least one pilot project that serves residential customers located in a:
(I)
Disproportionately impacted community;
(II)
Mountain community served by the large gas utility; or
(III)
Utility service area that the commission has determined is capacity constrained or that is targeted for electrification in a utility clean heat plan or beneficial electrification plan.
(d)
A large gas utility's pilot thermal energy network program proposal must:
(I)
Include specific customer protection plans that promote stable utility rates;
(II)
Be made publicly available on the commission's website; and
(III)
If approved, be implemented in compliance with the labor standards set forth in section
40-3.2-105.7
.
(e)
In considering whether to approve a large gas utility's application proposing a pilot thermal energy network program, the commission shall consider the long-term effects that the proposed pilot thermal energy network program would have on the state's utility workforce.
(f)
A large gas utility may propose a pilot thermal energy network program as part of the large gas utility's application for approval of a clean heat plan pursuant to section
40-3.2-108
or a gas DSM program plan pursuant to section
40-3.2-103 (3)
or as part of a strategic issues application; except that a pilot thermal energy network program applied for as part of a clean heat plan does not count toward the clean heat plan cost caps set forth in section
40-3.2-108 (6)(a)(I)
.
(g)
In proposing a pilot thermal energy network program pursuant to this subsection (3), a large gas utility shall present to the commission options for how the large gas utility may fund the pilot program, including options that involve the use of any federal or private sources of funding or rate recovery from nonresidential customers to manage impacts upon residential customers. A pilot thermal energy network program application must include a current or forward-looking rate structure to promote stable customer billing.
(4)
A large gas utility that develops a pilot thermal energy network program shall report to the commission in the form and manner required by the commission information and data regarding the pilot program to help further the development of future thermal energy networks. The large gas utility's report must include:
(a)
The potential for implementation of thermal energy networks to provide consumer bill stabilization and the methods by which such stabilization may be achieved;
(b)
The potential for implementation of thermal energy networks to reduce consumer bill costs;
(c)
The potential to reuse existing gas infrastructure for, or to time end-of-life gas infrastructure retirement or replacement with, implementation of thermal energy networks;
(d)
The potential for implementation of thermal energy networks to assist the large gas utility in avoiding stranded gas assets;
(e)
An estimate of avoided emissions from implementation of thermal energy networks; and
(f)
Programs, incentives, or other mechanisms that the large gas utility may employ to make widespread thermal energy network implementation a viable option.
(5)
(a)
On or before January 1, 2025, the commission shall initiate a proceeding to determine whether commission rule-making or additional legislative changes are needed to facilitate the development of thermal energy in the state.
(b)
(I)
As part of the proceeding held pursuant to this subsection (5), the commission shall consider:
(A)
The appropriate utility ownership models for development, acquisition, customer service, and cost recovery for thermal energy networks; and
(B)
The appropriate utility rate structures for and customer types or classes served by thermal energy networks.
(II)
The commission may also consider during the proceeding whether rules are necessary to:
(A)
Create requirements for gas-utility-owned thermal energy networks concerning a large gas utility's ability to partner with qualified third parties through joint ventures, asset development and transfers, or similar structures and facilitate the development of thermal energy networks;
(B)
Ensure that any thermal energy network incorporated into a large gas utility's system provides reliable and resilient service;
(C)
Promote training and transition of utility workers for thermal energy jobs;
(D)
Adjust a large gas utility's rate recovery mechanisms to further support the development of thermal energy networks as part of meeting the state's overall energy policy objectives; and
(E)
Determine appropriate methods of cost recovery for thermal energy networks, including consideration of the stability of utility customers' bills.
(6)
A local government or campus that develops and operates a thermal energy system that provides thermal energy service to buildings that the local government or campus owns and manages is not considered a public utility and is not subject to regulation by the commission.
Added by 2023 Ch. 166,§ 5, eff. 8/7/2023.
2023 Ch. 166, was passed without a safety clause. See Colo. Const. art. V, § 1(3).