First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0436.02 Jason Gelender SENATE BILL 11-032 SENATE SPONSORSHIP Johnston, HOUSE SPONSORSHIP (None), Senate Committees House Committees Agriculture and Natural Resources A BILL FOR AN ACT Concerning a requirement that the public utilities commission promulgate rules to establish an on-bill financing program for clean energy improvements to real property. 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 bill: Requires the public utilities commission (PUC) to promulgate rules no later than January 1, 2012, to establish an on-bill clean energy improvement financing program under which a retail customer of a PUC-regulated public utility that sells electricity or natural gas may enter into an on-bill financing arrangement with the public utility under which the public utility finances the costs of completing a clean energy improvement to the customer's real property and the customer agrees to repay the costs by paying a temporary surcharge or a temporary increased rate for electricity or natural gas, as applicable, on the customer's utility bill; and Specifies minimum provisions that the rules must include relating to: The imposition of temporary surcharges or temporary increased rates; The application of energy savings from the program to a public utility's demand-side management targets or goals; and The exemption of a public utility from participation in the program if participation will not reduce the public utility's future present value revenue requirements. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Article 2 of title 40, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 40-2-130. Program for on-bill financing of clean energy improvements - rules - definitions. (1) As used in this section, unless the context otherwise requires, "clean energy improvement" means: (a) Any repair of, or addition or improvement to, real property that improves the energy efficiency of the property or replaces all or a portion of the energy from nonrenewable sources used in connection with the property with energy from renewable sources so as to reduce the nonrenewable energy consumption of the property; and (b) Any installation of, or connection with, equipment that produces or conducts recycled energy or renewable energy resources, as defined in section 40-2-124 (1) (a), or solar heating and cooling systems, for use on real property. (2) No later than January 1, 2012, the commission shall promulgate rules, in accordance with section 40-2-108, that establish an on-bill financing program for clean energy improvements to real property under which a retail customer of a public utility under the jurisdiction of the commission that sells electricity or natural gas may enter into an on-bill financing arrangement with the public utility under which the public utility finances the costs of completing a clean energy improvement to the customer's real property and the customer agrees to repay the costs by paying either a temporary surcharge or a temporary increased rate for electricity or natural gas, as applicable, on the customer's utility bill. At a minimum, the rules shall provide that: (a) The commission shall set uniform surcharges or uniform increased rates for all customers participating in the program, and the total amount of the surcharges or increased rates that each customer shall pay shall be based on the amount of the costs paid by the utility in financing the customer's clean energy improvement; (b) The temporary increased surcharge or rate shall be applied to the utility bill for any real property for which a clean energy improvement was financed under the program until full payment is made in accordance with the terms of the on-bill financing arrangement under which the clean energy improvement was financed, notwithstanding any change in the ownership or occupancy of the real property; (c) For a public utility for which the commission has developed expenditure and natural gas savings targets pursuant to section 40-3.2-103, or energy savings and peak demand reduction goals pursuant to section 40-3.2-104, the commission shall determine the extent to which clean energy improvements financed by the utility under the program have created energy savings and shall allow the public utility to count the energy savings toward compliance with its expenditure and natural gas savings targets or energy savings and peak demand reduction goals, as applicable, using any method deemed appropriate by the commission; and (d) A public utility need only participate in the program if participation will reduce the public utility's future present value revenue requirements. SECTION 2. 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.