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 3 - REGULATION OF RATES AND CHARGES (§§ 40-3-101 — 40-3-121) › Section 40-3-104.3 - Manner of regulation - competitive responses - definitions - repeal

(1)
(a)
Upon application by any public utility providing electric, natural gas, or steam service, the commission shall authorize such public utility to provide utility services to a specific customer or potential customer by contract without reference to its tariffs on file with the commission if the commission finds that:
(I)
For contracts with a specific customer or potential customer involving electric and steam service:
(A)
The price of any such service is not below that service's variable cost;
(B)
The customer, or potential customer, has expressed its intention to decline or discontinue, or partially discontinue, service, to provide its own service, or to pursue the purchase of alternate services from another provider;
(C)
The approval of the application will not adversely affect the remaining customers of the public utility; and
(D)
The approval of the application is in the public interest;
(II)
For contracts with existing customers involving natural gas service:
(A)
The customer has the ability to provide its own service or has competitive alternatives available from other providers of the same or substitutable service, except from another public utility providing or proposing to provide the same type of service;
(B)
The customer will discontinue using the services of the public utility if the authorization is not granted;
(C)
Approval of the application will not as adversely affect the remaining customers of the public utility as would the alternative;
(D)
The price of any such service provided pursuant to this subparagraph (II) shall be justified and shall not be less than the marginal cost of the service to the public utility. If the price is less than marginal cost, this shall be deemed to be an illegal restraint of trade subject to the provisions of article
4
of title
6
, C.R.S.; and
(E)
The approval of the application is in the public interest.
(b)
(I)
Following a notice period of five days after the filing of an application under this section, the commission shall approve or deny the application within thirty days. All applications filed with the commission pursuant to this section shall be placed at the head of the commission's docket and shall be disposed of promptly within the time periods set forth in this subsection (1)(b)(I); except that, for good cause shown, the commission may extend the period in which it must act for an additional fifteen days, or, in extraordinary circumstances, including the existence of numerous pending applications under this section, the commission may extend the period in which it must act for an additional thirty days beyond the fifteen days provided for in this subsection (1)(b)(I).
(II)
Whenever the application is continued as provided in subsection (1)(b)(I) of this section, the commission shall enter an order making the continuance and stating fully the facts necessitating the continuance. If the commission has not approved or denied an application within the time periods set forth in subsection (1)(b)(I) of this section, the application shall be deemed approved. If the commission denies an application for approval within the permitted period, the subject contract does not become effective.
(III)
Any contract submitted pursuant to this section shall be filed under seal and treated as confidential by the commission; except that, at the time the applicant files an application or contract with the commission, the applicant shall also furnish a copy of the application to any public utility then providing electric, gas, or steam service in the state of Colorado to the customer, and also furnish a copy to the office of the utility consumer advocate, which office shall also treat the contract as confidential.
(c)
An application filed by a public utility pursuant to this section shall contain the name of the customer, a description of the services proposed to be provided under contract, evidence that the requirements of paragraph (a) of this subsection (1) have been met, and any additional information required by the commission. The commission may dismiss an application if the applicant fails to provide information necessary to enable the commission to make the findings required by paragraph (a) of this subsection (1).
(d)
(Deleted by amendment, L. 92, p. 2138, § 1, effective April 23, 1992.)
(e)
Within ten days after the execution of the contract, the public utility shall file with the commission under seal and as a confidential document the final contract or other description of the price and terms of service, together with any additional information required by the commission. The applicant shall also furnish a copy of the information to the office of the utility consumer advocate, which office shall treat the information as confidential. The commission has no authority to disapprove the contract if the contract complies with the conditions contained in subsection (1)(a) of this section, but the commission may consider the contract for general regulatory purposes and to ensure compliance with the requirements of this section.
(2)
(a)
For contracts involving electric and steam service, at the time of any proceeding in which a utility's overall rate levels are determined, the commission shall specify a fully distributed cost methodology to be used to segregate rate base, expenses, and revenues associated with utility service provided by contract pursuant to this section from other regulated utility operations. For contracts involving electric and steam service, if revenues from a service provided pursuant to this section are less than the cost of service as determined by the fully distributed cost methodology specified by the commission, the rates of other regulated utility operations may not be increased to recover such difference between costs and revenues.
(b)
For contracts involving natural gas service, the commission may require a public utility to segregate investments, expenses, and revenues associated with utility service provided pursuant to subparagraph (II) of paragraph (a) of subsection (1) of this section to ensure that such services are not subsidized by revenues from other utility operations. If the commission requires such segregation of such investment and expenses, it shall specify a fully distributed cost allocation methodology.
(3)
(a)
This section shall neither enlarge nor diminish the rights and obligations of a public utility operating under a certificate issued by the commission to serve customers within a territory pursuant to the provisions of article 3.5, 5, or 9.5 of this title.
(b)
Nothing in this section shall be construed to permit any public utility to provide electric, natural gas, or steam service to a customer of another public utility located in or for use in the service territory of such other public utility providing or proposing to provide the same type of service.
(4)
(a)
The commission has the right to inspect the books and records of any affiliate of a public utility to the extent that the affiliate uses any plant, or incurs any cost, or provides any service or product which is joint and common to the provision of public utility services and products subject to the jurisdiction of the commission. Upon application and for good cause shown, the commission may enter an appropriate protective order which directs the manner in which proprietary information shall be treated.
(b)
For purposes of this subsection (4), unless the context otherwise requires, "affiliate of a public utility" means a subsidiary of a public utility, a parent corporation of a public utility, a joint venture organized as a separate corporation or partnership to the extent of the individual public utility's involvement with the joint venture, or a subsidiary of a parent corporation of a public utility.
(5)
Nothing in this section limits or restricts the commission's authority to regulate rates and charges, correct abuses, or prevent unjust discrimination except as specifically provided in this section.
(6)
(a)
Notwithstanding any other provision of this section, an investor-owned electric utility subject to rate regulation by the commission may offer economic development rates to a qualifying commercial or industrial customer.
(b)
(I)
An economic development rate approved pursuant to this section must be lower than the rate or rates that the qualifying commercial or industrial customer would be or currently is subject to under the utility's tariffs in effect at the time the qualifying commercial or industrial customer seeks to qualify for the economic development rate; except that an economic development rate must not be lower than the utility's marginal cost of providing service to the qualifying commercial or industrial customer.
(II)
(A)
The commission may approve investor-owned utility tariffs that provide for implementation of an economic development rate and set a minimum and maximum amount for the rate consistent with subsection (6)(b)(I) of this section.
(B)
Notwithstanding subsection (6)(b)(II)(A) of this section, the utility may negotiate and enter into agreements related to economic development rates with individual qualifying commercial or industrial customers without commission approval so long as the agreed-upon economic development rate complies with the commission-approved tariff and the addition or expansion of existing load at a single location is less than or equal to twenty megawatts. Any addition or expansion of existing load at a single location that is greater than twenty megawatts requires separate commission approval based upon a finding that the addition or expansion is consistent with this section.
(III)
An investor-owned utility may offer an economic development rate to a qualifying commercial or industrial customer for up to ten years.
(c)
(I)
An authorization granted by the commission pursuant to this section must include such terms and conditions as the commission determines are necessary to ensure that the economic development rates or charges assessed to other customers do not subsidize the cost of providing service to qualifying commercial and industrial customers consistent with subsection (6)(b)(I) of this section, and that there is no other subsidization of such service. In developing the terms and conditions, the commission shall consider, among other things, the rates and charges assessed to the utility's wholesale customers and the effects on other transmission system owners and users resulting from new transmission facilities constructed in connection with the utility's expansion of an existing voluntary renewable energy program or service offering.
(II)
In a commission proceeding related to economic development rates authorized pursuant to subsection (6)(b) of this section, the utility bears the burden of proof to establish that:
(A)
The rates or charges assessed to other customers do not subsidize the cost of providing economic development rates to qualifying commercial or industrial customers;
(B)
The rates of other regulated utility operations do not increase; and
(C)
Other customers on the utility's system do not experience a rate increase due to a rate or rates offered to a qualifying commercial or industrial customer pursuant to this section.
(III)
The commission shall not impute to the utility revenues that would have been received from the qualifying commercial or industrial customer if the customer were being provided service under the corresponding rate for which it would have otherwise qualified under the utility's tariffs.
(d)
(I)
An investor-owned utility may seek commission approval to expand any voluntary renewable energy program or service offering, except those covered by valid agreements to the contrary executed and approved by the commission as of January 1, 2019, through the acquisition of additional renewable generation capacity and energy to meet the current and projected demand of:
(A)
Any commercial or industrial customer making a capital investment of two hundred fifty million dollars or more;
(B)
Any commercial or industrial customer that requires such expansion to remain as a customer of that utility; or
(C)
Any qualifying commercial or industrial customer entering the service territory of the utility.
(II)
The commission may approve, within one hundred twenty days, an expansion of an existing voluntary renewable energy program or service offering upon a showing by the utility that:
(A)
There is not sufficient capacity and energy in the existing voluntary renewable energy program or service offering to satisfy the needs of the customer and the customer meets the requirements of subsection (6)(d)(I) of this section; and
(B)
The availability of the program or service, either on its own or in combination with other incentives, is a substantial factor in the customer's decision to locate new or expand or retain existing business operations in Colorado.
(7)
As used in subsection (6) of this section and this subsection (7):
(a)
"Qualifying commercial or industrial customer":
(I)
Means a utility customer that:
(A)
Agrees to: Locate commercial or industrial operations in Colorado and add at least three megawatts of new load at a single location; or expand existing commercial or industrial operations in Colorado and add at least three megawatts of new load at a single location; and
(B)
Demonstrates, to the satisfaction of the investor-owned utility, subject to review by the commission, that: The cost of electricity is a critical consideration in deciding where to locate new or expand existing operations; and the availability of economic development rates, either on their own or in combination with other economic development incentives, is a substantial factor in the customer's decision to locate new or expand existing business operations in Colorado;
(II)
Does not include a customer that agrees to relocate or otherwise transfer its existing load of at least three megawatts from the service territory of another public utility, as defined in section
40-1-103
, into the service territory of the utility offering economic development rates.
(b)
"Voluntary renewable energy program or service offering" means a program or other service offering approved by the commission that allows a commercial or industrial customer access to eligible energy resources, as that term is defined in section
40-2-124 (1)(a)
, on a voluntary basis, on terms and conditions deemed necessary by the commission. For a voluntary renewable energy program or service offering to be expanded, it must have been approved by the commission prior to the expansion request of a commercial or industrial customer pursuant to subsection (6)(d)(I) of this section.
(8)
This subsection (8) and subsections (6) and (7) of this section are repealed, effective January 1, 2028.
Amended by 2021 Ch. 477, § 13, eff. 9/1/2021.
Amended by 2018 Ch. 362, § 2, eff. 1/1/2019.
L. 89: Entire section added, p. 1535, § 1, effective July 1. L. 92: Entire section amended, p. 2138, § 1, effective April 23. L. 2018: (5) amended and (6) to (8) added, (HB 18-1271), ch. 2159, p. 2159, § 2, effective 1/1/2019. L. 2021: (1)(b) and (1)(e) amended, (SB 21-103), ch. 3414, p. 3414, § 13, effective September 1.
For the legislative declaration in HB 18-1271, see section 1 of chapter 362, Session Laws of Colorado 2018.