Colorado Energy Landscape Pie

Just over half of Colorado electricity customers buy power from investor-owned utilities. A draft bill approved by an interim Colorado legislative committee could lead to the state authorizing community choice energy, also known as community choice aggregation. 

A Colorado legislative committee drafted a bill that would direct state regulators to explore the potential effects of community choice energy programs, also known as community choice aggregation, in the state. CCE programs allow local governments to procure power on behalf of ratepayers in their jurisdictions while incumbent utilities continue to provide transmission and distribution service.

The draft bill, approved Oct. 3 by the Investor-Owned Utility Review Interim Study Committee, would require the Colorado Public Utilities Commission to oversee a feasibility study and an investigatory proceeding intended to examine the viability and potential benefit of implementing CCE in the state. The bill will be reviewed by the Colorado General Assembly's Legislative Council on Nov. 15. If approved there, it will be sponsored by Rep. Edie Hooton, vice chair of the House Energy and Environment Committee, in the 2020 legislative session and introduced in the House.

If the bill passes and becomes law, results of both the study and the investigatory proceeding would be delivered to energy-related legislative committees by late 2020 in preparation for the 2021 legislative session.

The feasibility study would focus on the financial and technical requirements necessary for CCE to be viable and beneficial in Colorado. The PUC would select an independent energy expert to conduct the study under that agency's guidance. The bill also directs the PUC to conduct an investigatory proceeding with the goal of identifying best practices and recommending legislative changes informed by testimony and documentation from people with expertise in utility operations, CCE or both.

The bill reflects a belief that CCE would provide communities that have renewable-energy goals with a means to reach them more quickly and cost-effectively than would be possible under the current decarbonization timelines of Colorado's investor-owned utilities. At least three dozen Colorado communities comprising more than a million residents will not be able to reach their renewable-energy goals without greater choice and control over wholesale electricity supply than they currently have, according to language in the bill.

The draft legislation supports an opt-out model for CCE in which existing customers are automatically enrolled in the program and must take action to remain a bundled customer of the investor-owned utility serving their locale. Language in the bill characterizes the opt-in model for CCE as a "recipe for disaster" and says that retail CCE as practiced in restructured retail-choice states does not promote conditions necessary to develop high levels of renewable energy.

Gov. Jared Polis in May laid out a policy initiative that prioritizes local commitments to achieve 100-percent renewable-energy goals. The  announcement coincided with Polis signing seven energy bills passed during the 2019 legislative session that aim to reshape Colorado's energy economy and boost the use of renewable resources in the state.

In New Mexico, SB 374, the Local Choice Energy Act, came before that state's Legislature this year, but failed to get a hearing. More recently in Arizona, state regulators expressed enthusiasm about community choice aggregation during a July presentation by Cathy DeFalco of California Choice Energy Authority at a workshop on retail electric competition in that state [RE-00000A-18-0405] (see CEM No. 1550).

Nevada, which defeated a referendum that would have authorized electric restructuring in 2018, is on the Local Energy Aggregation Network's watch list of states with potential to introduce community choice legislation, along with Arizona and Colorado. LEAN, a nonprofit that supports CCA efforts and success around the country, reports "nascent efforts" in those states as well as in Oregon and Virginia. California, which passed legislation enabling CCAs in 2002, is the only Western state in which it is currently authorized. California has 20 CCA programs operating throughout the state, according to LEAN.