Colorado utilities are concerned that they may struggle to meet the state’s carbon emissions reduction goals if the proposed bill, which has yet to be introduced, changes the current targets. The 2025 legislative session is nearing its final month.
The bill, whose sponsors are not yet known, is being run in conjunction with the Colorado Energy Office. It would require electric utilities to reduce greenhouse gas emissions by 95% compared to 2005 levels by 2035 and 100% by 2040. The Energy Office’s Greenhouse Gas Pollution Reduction Roadmap, created through legislation passed in 2019, requires utilities to reduce greenhouse gas pollution by 65% by 2035 and 100% by 2050, compared to 2005 levels.
The bill would also impose a 1.5% rate or cost impact cap on utilities and require the Public Utilities Commission to assess the “equity” impacts of all utilities’ emissions reduction plans and rules, including benefits to disproportionately impacted communities.
It’s not immediately clear what the 1.5% cap means, such as whether it’s designed to prohibit utilities from passing more than 1.5% of costs to consumers.
Late last month, several dozen utilities, labor unions, and electric officials sent a letter to Democratic and Republican leaders in the state legislature, urging them not to grant the bill late status.
“As a group, we have not historically agreed on all aspects of the energy transition and have often engaged in vigorous debate on what the best path forward is for our State’s energy future,” the letter reads. “However, we come together to ask that you not grant late bill status for legislation that would preemptively advance the clean energy targets for the power sector forward a full decade, from 2050 to 2040 — not because we don’t think it may be possible to get there, but because we have to build out the framework thoughtfully, and with intention, to ensure that the energy transition doesn’t needlessly result in soaring energy costs.”
One of the signatories on that letter was Xcel Energy, the state’s largest utility.
Tyler Smith, the company’s director of regional government affairs, said they appreciate the measure’s efforts to accelerate emission reductions, but moving the goalposts up by a decade could decrease grid reliability and increase costs, which have already gone up by nearly 40% since 2019, according to Carly West of the Denver Metro Chamber of Commerce.
Last month, the state’s top economists said that while the state isn’t expected to face a recession in the near future, citizens may “increasingly” report feeling like they are experiencing one.
“I would absolutely anticipate those costs to be passed on to consumers, and I don’t think it’s a reasonable proposition to tell one business that they have to incur a significant amount of costs to invest in something in a very rapid timeframe and then expect them to somehow be able to absorb these costs,” said West. “That’s not how a business can operate.”
In a statement to Colorado Politics on behalf of Xcel, Smith said, “We are committed to our customers and communities and want to ensure that we are supporting legislation that improves the economic development for the region and the state. We are working with the Colorado Public Utilities Commission and our Colorado communities on a just transition designed to minimize impacts of the changing energy landscape. We are always committed to and working with lawmakers and stakeholders to ensure we make progress on company and state carbon reduction goals.”
Meghan Dollar of the Colorado Chamber of Commerce said that many of her members from the utility sector expressed frustration that they weren’t included in the stakeholder process on the bill to the same extent as they had wished.
“When you are kind of changing those [goals] with very little input from the entities that have to implement it, that’s really problematic,” she said.
Chamber members are also worried about the timing of the bill’s introduction. Bringing forward such an extensive piece of policy — the latest draft is over 60 pages long — with just over a month left in the session doesn’t leave much time for serious discussion about its implications, said West.
“It’s certainly not a lack of commitment or work to get there, but 10 years is a pretty quick escalation, especially when we’re sitting here in 2025 talking about a shift to 2040 instead of 2050,” she said. “That’s a really significant shift in timeline.”
According to Dollar, the Energy Office sent an email stating that they might be drafting the bill shortly, meaning they had received late bill permission from leadership. West, however, said she had not received such an email.
West said the Energy Office’s greenhouse gas emissions goals are already quite ambitious, but utilities are doing their best to ensure they’re on track to meet them by the required deadlines. However, she said, “when we look at what it would take to bump those deadlines up by a decade and make them happen faster, I think that raises a lot of questions about what is the actual path to doing that.”
Certain technologies created to reduce greenhouse gas emissions are still new, West added, and will require some time before they can be implemented successfully.
“There’s questions about first-generation technology; not just how much it costs, but if it’s really ready to be deployed on that kind of scale,” she said.
Denver Metro Chamber members are concerned about the economy, just like other business owners across the state are, West said.
“This is an extraordinarily bad time, I would say, to increase costs on something that is already on track to deliver the results that we’re looking for in terms of emissions reductions, but in a more feasible timeframe.”