While the U.S. Environmental Protection Agency has decided to delay until Summer 2015 issuing final rules for carbon dioxide emissions from existing power plants under its Clean Power Plan (CPP), the Colorado General Assembly is getting a head-start on considering how best to develop the plan for how Colorado may comply with the EPA rules.  One week into the 2015 legislative session, Senate Bill 15-092 provides a framework for the coordinated review of a proposed Colorado CPP compliance plan.

The bill calls for the state plan developed by the Colorado Department of Public Health and Environment to be submitted first to the Colorado Public Utilities Commission which will conduct an evidentiary hearing to evaluate the proposed plan against a series of factors including: the extent to which the plan reduces other air pollutants, increases utilization of existing natural gas-fired generation, supports compliance with state or federal clean energy requirements, incorporates energy efficiency measures, promotes economic development, preserves reliable electric service, and effects consumer rates.  The factors the Commission will use to evaluate the proposed plan are substantially the same as the factors the Commission used to review utilities’ emission control plans submitted pursuant to the 2010 Colorado Clean Air – Clean Jobs Act which included, among other things, the retirement or conversion of at least 900 MW or 50% percent of a utility’s coal-fired generation in Colorado.

If the Commission approves the proposed CPP compliance plan, the plan together with the Commission’s Order and an accompanying joint report from the Department and the Commission will be transmitted to each house of the Legislature where the proposed plan must be approved by a two-thirds vote before it can be submitted to the EPA.  The bill also prohibits submission of the proposed plan to EPA if implementation of the plan would result in an average annual retail rate increase of two percent or more, or if it would result in any unreasonable reliability risks.

The bill as introduced creates a procedural framework that will ensure that the compliance plan developed by the state’s air regulator is informed by the technical expertise of the state’s utilities regulator.  The result of this process should allow the General Assembly and the public to have a better understanding of the effects of what is being considered to be one of the most significant pieces of federal environmental regulation ever and which many other states are struggling with as evidenced by the states’ formal comments on the proposed EPA rules.

Other energy-related legislation introduced during the first full week of the Colorado legislative session include a bill expanding the existing Wind for Schools grant program to include other forms of eligible energy resources (SB15-063), a bill expanding the types of hydroelectric power that may be used for compliance with Colorado’s renewable energy standard (HB15-1118), and a bill clarifying the rights and duties of parties to wind energy agreements (HB15-1121).