First Regular Session Sixty-seventh General Assembly STATE OF COLORADO INTRODUCED LLS NO. 09-0945.01 Thomas Morris HOUSE BILL 09-1323 HOUSE SPONSORSHIP Levy, Fischer, Green, Hullinghorst, Kerr A., Labuda, McFadyen, Merrifield, Pace, Pommer, Primavera, Scanlan, Solano SENATE SPONSORSHIP Veiga, Bacon, Heath, Romer, Shaffer B. House Committees Senate Committees Transportation & Energy A BILL FOR AN ACT Concerning energy efficiency programs implemented by cooperative electric associations. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Directs cooperative electric associations serving 100,000 or more customers to engage in conservation and energy efficiency programs and to save an amount of electricity equal to 2% of 2008 sales by 2012, 5% of 2008 sales by 2015, and 10% of 2008 sales by 2020, which savings are a result of conservation and energy efficiency programs implemented starting in 2009. Requires periodic reports from the utilities to the governor's energy office. Specifies that the act does not extend the authority of the public utilities commission. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Article 9.5 of title 40, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 4 ENERGY EFFICIENCY PROGRAMS 40-9.5-401. Legislative declaration. The general assembly hereby finds, determines, and declares that all utilities operating in Colorado should implement programs to help their customers increase energy efficiency and conserve energy, thereby lowering utility bills for consumers as a whole, reducing pollutant emissions caused by electricity generation and supply, and minimizing the consumption of nonrenewable fossil fuels. Such programs are matters of statewide concern and are in the public interest. 40-9.5-402. Definitions. As used in this part 4, unless the context otherwise requires: (1) "Benefit cost test" means an objective method of calculating the ratio of the total benefits of an energy efficiency program to its total costs. The benefits to be considered in this calculation include a utility's avoided generation costs, avoided power purchase costs, avoided transmission and distribution costs, and avoided fuel and operating costs. The costs to be considered in this calculation include the utility's costs for energy efficiency program delivery, administration, marketing, and evaluation and the cost of financial incentives paid to participants. (2) "Cost-effective", with reference to an energy efficiency program, means having a benefit-to-cost ratio greater than one using the benefit cost test. (3) "Energy efficiency program" means a coherent set of activities undertaken by a utility for the purpose of increasing the efficiency of electricity use by customers of the utility or conserving electricity. An energy efficiency program may include education, promotion, technical assistance, and financial incentives for customers. (4) "Governor's energy office" means the office created in section 24-38.5-101, C.R.S. (5) "Primary energy consumption" means energy consumption, as determined on a source basis rather than a site basis, and includes energy losses in generation, transmission, and distribution in the case of electricity. (6) "Utility" means a cooperative electric association that provides retail electric service to one hundred thousand or more customers. 40-9.5-403. Scope of article - jurisdiction of commission. (1) Notwithstanding any provision of law to the contrary, this part 4 applies to all cooperative electric associations that provide retail electric service to one hundred thousand or more customers. The number of customers served by a utility shall be presumed to be no fewer than the number of utility meters that the utility employs for billing purposes. (2) Nothing in this part 4 shall be construed to extend the public utilities commission's authority with regard to: (a) Any utility subject to this part 4, except as required for the exercise of duties prescribed by this part 4 or enforcement of the commission's rules and orders as authorized by this part 4; or (b) Any nonregulated utility businesses or affiliates of a utility. 40-9.5-404. Energy efficiency programs - requirements. (1) During calendar years 2012 to 2014, each utility covered under this article shall, at a minimum, demonstrate savings of an amount of electricity equivalent to two percent of its retail electricity sales in 2008, as a result of energy efficiency programs implemented starting in 2009. (2) During calendar years 2015 to 2019, each utility covered under this article shall, at a minimum, demonstrate savings of an amount of electricity equivalent to five percent of its retail electricity sales in 2008, as a result of energy efficiency programs implemented starting in 2009. (3) during calendar years starting 2020 and thereafter, each utility covered under this article shall, at a minimum, demonstrate savings of an amount of electricity equivalent to ten percent of its retail electricity sales in 2008, as a result of energy efficiency programs implemented starting in 2009. (4) Each utility shall determine which programs it chooses to implement to meet its energy efficiency program savings requirements; except that at least ten percent of revenues spent on such programs shall be devoted to energy conservation and efficiency programs serving low-income customers. Each utility shall strive to implement a set of programs that, taken together, are cost-effective. (5) In complying with the requirements of subsections (1), (2), and (3) of this section, a utility shall achieve at least eighty percent of its energy savings requirement from efficiency programs and measures that save electricity on customers' premises. Up to twenty percent of the energy savings may come from efficiency programs and measures that increase energy efficiency in the distribution system or reduce primary energy consumption through fuel switching. (6) A utility may choose to implement energy efficiency programs on its own, in partnership with other affected utilities, or by providing funding to the governor's energy office to administer energy efficiency programs on behalf of the utility. (7) A utility may use revenues provided by ratepayers' other entities, including without limitation a wholesale electric power provider, state government, or local government, toward meeting its energy efficiency program savings requirements specified in subsections (1), (2), and (3) of this section. (8) The governor's energy office shall oversee one or more qualified and impartial contractors to implement energy efficiency programs for a utility if that utility chooses to provide funding to the governor's energy office for this purpose. The governor's energy office may charge a utility a reasonable management fee, not to exceed ten percent of the funds it receives, if the utility chooses to have the governor's energy office administer energy efficiency programs on its behalf. 40-9.5-405. Reporting on energy efficiency programs. (1) Each utility covered under this part 4 shall track program expenditures and energy savings on an annual basis. (2) No later than April 30 of each year, each utility covered under this part 4 shall submit a report for the preceding year to the governor's energy office. Annual reports shall contain information on the energy efficiency programs implemented, program expenditures, program expenditures as a fraction of retail sales revenue, energy savings achieved from programs implemented in the preceding year, energy savings achieved in the preceding year from all programs implemented since 2009, energy savings achieved as a fraction of 2008 sales, and the techniques used to estimate energy savings. (3) The governor's energy office shall review each report submitted pursuant to subsection (2) of this section and may, if the governor's energy office deems it appropriate and within the capability of then-existing full-time equivalent employees, provide comments to utilities to help them improve their energy efficiency programs. (4) The governor's energy office shall compile information on energy efficiency programs implemented by utilities and provide reports with such information to the general assembly by December 31, 2013, December 31, 2016, and December 31, 2021. Each report shall include a list of which utilities are in compliance with the energy efficiency program savings requirements specified in section 40-9.5-404 (1), (2), and (3), and which utilities, if any, are not; information on overall energy efficiency program expenditures and energy savings; and any recommendations to the general assembly for legislative changes to enhance energy efficiency and conservation. 40-9.5-406. Repeal. Sections 40-9.5-404 and 40-9.5-405 are repealed, effective January 1, 2022. SECTION 2. 40-9.5-114.5, Colorado Revised Statutes, is amended to read: 40-9.5-114.5. Applicability. (1) The provisions of Sections 40-9.5-108 to 40-9.5-112 shall be applicable apply to all cooperative electric associations with membership of more than twenty-five thousand members, whether regulated under this part 1 or the "Public Utilities Law", articles 1 to 7 of this title. (2) Part 4 of this article applies to all cooperative electric associations with membership of one hundred thousand or more members, whether regulated under this part 1 or the "Public Utilities Law", articles 1 to 7 of this title. SECTION 3. Act subject to petition - effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution, (August 5, 2009, if adjournment sine die is on May 6, 2009); except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.