First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0326.01 Duane Gall HOUSE BILL 11-1240 HOUSE SPONSORSHIP Swalm, Balmer, Baumgardner, Becker, Beezley, Brown, Conti, Coram, DelGrosso, Gardner B., Holbert, Joshi, Kerr J., Liston, Looper, Priola, Ramirez, Scott, Sonnenberg, Soper, Swerdfeger, Szabo SENATE SPONSORSHIP Cadman, King K., Tochtrop, Grantham, White House Committees Senate Committees Agriculture, Livestock, & Natural Resources A BILL FOR AN ACT Concerning measures to reduce the cost to consumers of reductions in greenhouse gas emissions by public utilities. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The 2004 voter initiative known as "Amendment 37" committed Colorado to a policy of increasing the portion of the state's electricity generated from renewable sources. Subsequent legislation allows the Colorado public utilities commission (PUC) to impute the cost of a carbon tax imposed at the federal level when calculating an electric utility's investments and comparing the cost of maintaining existing infrastructure with the cost of replacing existing power plants with more energy-efficient power plants. Section 1 of the bill conditions the PUC's imputation of the carbon tax on the actual adoption of a carbon tax as part of federal law. Section 2 limits the rate of return that a utility may earn on new infrastructure that replaces existing infrastructure that is not yet fully depreciated. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 40-2-123 (1) (b), Colorado Revised Statutes, is amended to read: 40-2-123. New energy technologies - consideration by commission - incentives - demonstration projects - definitions - legislative declaration - repeal. (1) (b) The commission may give consideration to the likelihood existence of new environmental regulation and the risk of higher future costs associated with imposed by current federal law or regulations on the emission of greenhouse gases such as carbon dioxide when it considers utility proposals to acquire resources. Where utilities eliminate or reduce carbon dioxide emissions through the use of capture and sequestration, the commission may consider the benefits of using carbon dioxide for enhanced oil recovery or other uses. SECTION 2. 40-6-111 (2) (c), Colorado Revised Statutes, is amended to read: 40-6-111. Hearing on schedules - suspension - new rates - rejection of tariffs. (2) (c) If the commission considers factors which that encourage renewable energy development, it shall also make findings and give due consideration to the effect of such factors on the utility's ability to recover its capital and operating costs; except that the rate of return permitted on the capital and operating costs associated with new generation facilities that replace existing generation facilities that are not yet fully depreciated shall not exceed one-half of the rate of return permitted on the capital and operating costs associated with existing generation facilities. 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 (August 10, 2011, if adjournment sine die is on May 11, 2011); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part shall not take effect unless approved by the people at the general election to be held in November 2012 and shall take effect on the date of the official declaration of the vote thereon by the governor.