The legislation directs gas distribution utilities in Colorado to submit “clean heat plan” to cut CO2 and methane emissions from their delivered gas. Recommended measures include energy efficiency, bio-methane, hydrogen, recovered methane, beneficial electrification of customer end users and leak detection. The gas distribution enterprises, defined as a public or municipal utilities with more than ninety thousand retail customers, are required to submit the plan to the Colorado Air Quality Control Commission prior to August 1, 2023 or January 1, 2024, depending on their company size.
The plan requires projected reductions in methane and carbon dioxide emissions together on a carbon dioxide equivalent term to meet a 4% reduction in 2025 and 22% reduction in 2030 based on a 2015 baseline, at a lowest reasonable cost. Companies are required to report their 2015 carbon dioxide and methane emissions separately. They are allowed to use recovered methane to account for no more than 1% reductions in 2025 and 5% reductions in 2030. Methane emissions include ones leaked from the transportation and delivery of gas from the gas distribution and service pipelines, as well as coal mine methane.
Small gas distribution utilities, defined as providing gas services to under ninety thousand retail consumers, are not required but may submit their “clean heat plan”, with no stringent emission targets set by the bill.
The commission should approve or modify the submitted plans considering the emission targets, public interests, and cost. Following the approval, each utility is required to submit an annual report detailing its costs spent and carbon dioxide and methane emissions reduced under the plan.