First Regular Session

Sixty-first General Assembly

LLS NO. 97­0732.01D DHG HOUSE BILL 97­1350

STATE OF COLORADO

BY REPRESENTATIVE Anderson;

also SENATOR Norton.

ENGROSSED

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING SPECIFICATION OF THE LIMITED AUTHORITY OF THE PUBLIC UTILITIES COMMISSION TO CONSIDER ENVIRONMENTAL COSTS WHEN MAKING REGULATORY DECISIONS.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Provides that the public utilities commission, when exercising its regulatory authority in connection with evaluating potential utility resources or otherwise, may not consider environmental costs unless such costs are recognized under generally accepted accounting principles and are incurred or proposed for the purpose of complying with existing environmental laws or rules or with settlements approved by a state or federal court or administrative agency.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  40­3­111 (1.5), Colorado Revised Statutes, 1993 Repl. Vol., as amended, is amended to read:

40­3­111.  Rates determined after hearing. (1.5) (a)  If the commission considers environmental effects when comparing the costs and benefits of potential utility resources, it shall also make findings and give due consideration to the effect that acquiring such resources will have on the state's economy and employment, including, but not limited to, the effect on the mining, electric, natural gas, energy efficiency, and renewable resource industries. WHEN EXERCISING ANY AUTHORITY CONFERRED UPON IT BY LAW, THE COMMISSION SHALL NOT CONSIDER ENVIRONMENTAL COSTS, INCLUDING, WITHOUT LIMITATION, EXTERNAL ENVIRONMENTAL COSTS, UNLESS SUCH COSTS ARE RECOGNIZED UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND ARE EITHER:

(I)  INCURRED, OR PROPOSED TO BE INCURRED, FOR THE PURPOSE OF COMPLYING WITH EXISTING STATE OR FEDERAL ENVIRONMENTAL LAWS OR RULES OR WITH SETTLEMENTS OR OTHER AGREEMENTS APPROVED BY A COURT OR ADMINISTRATIVE AGENCY; OR

(II)  INCURRED, OR PROPOSED TO BE INCURRED, BY A UTILITY UNDER A VOLUNTARY PLAN TO REDUCE EMISSIONS OR ACCOMPLISH OTHER ENVIRONMENTAL MITIGATION BEYOND THE LEVELS REQUIRED BY EXISTING STATE OR FEDERAL ENVIRONMENTAL LAWS OR RULES.

(b)  If the commission considers factors which 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. THE COMMISSION'S AUTHORITY DOES NOT INCLUDE ESTABLISHMENT OR ENFORCEMENT OF ENVIRONMENTAL STANDARDS IN ANY MATTER BEFORE THE COMMISSION; EXCEPT THAT, IN DETERMINING THE PRUDENCE OF EXPENDITURES, THE COMMISSION MAY INCLUDE AS ONE OF THE FACTORS TO BE CONSIDERED, AND MAY REQUIRE A UTILITY TO PROVIDE EVIDENCE TENDING TO ESTABLISH, THAT THE UTILITY'S EXPENDITURES WILL COMPLY WITH EXISTING STATE OR FEDERAL ENVIRONMENTAL LAWS OR RULES OR WITH SETTLEMENTS OR OTHER AGREEMENTS APPROVED BY A COURT OR ADMINISTRATIVE AGENCY.

(c)  IF, IN THE COURSE OF COMPARING THE COSTS AND BENEFITS OF POTENTIAL UTILITY RESOURCES, THE COMMISSION CONSIDERS ENVIRONMENTAL COSTS AS PERMITTED BY THIS SUBSECTION (1.5), THE COMMISSION SHALL ALSO MAKE FINDINGS AND GIVE DUE CONSIDERATION TO THE EFFECT THAT ACQUIRING SUCH RESOURCES WILL HAVE ON THE STATE'S ECONOMY AND EMPLOYMENT, INCLUDING, BUT NOT LIMITED TO, THE EFFECT ON THE MINING, ELECTRIC, NATURAL GAS, ENERGY EFFICIENCY, AND RENEWABLE RESOURCE INDUSTRIES.

(d)  IF THE COMMISSION CONSIDERS FACTORS 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.

(e) NOTHING IN THIS SUBSECTION (1.5) SHALL BE CONSTRUED TO PROHIBIT THE COMMISSION FROM TAKING INTO ACCOUNT EMISSION-TRADING CREDITS AND THE LOWEST-COST AVAILABLE ALTERNATIVES, WHEN CONSIDERING THE COSTS AND BENEFITS OF POTENTIAL UTILITY RESOURCES FOR PURPOSES OF PRUDENCY REVIEW AND INTEGRATED RESOURCE PLANNING.

SECTION 2.  40­5­101, Colorado Revised Statutes, 1993 Repl. Vol., is amended BY THE ADDITION OF A NEW SUBSECTION to read:

40­5­101.  New construction ­ extension. (3) THE LIMITATIONS ON THE COMMISSION'S AUTHORITY CONTAINED IN SECTION 40­3­111 (1.5) SHALL APPLY TO DETERMINATIONS UNDER THIS SECTION.

SECTION 3.  Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day 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; 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.