DENVER - Friday, Jun. 9, 2023 - Governor Polis recently signed into law a series of bills passed by the Colorado legislature that build on the state’s commitment to an equitable transition to a low-carbon economy through robust policies and targeted funding.
The Colorado Energy Office (CEO), the Colorado Department of Public Health and Environment (CDPHE), the Colorado Department of Agriculture (CDA), and the Department of Natural Resources (DNR) will be responsible for implementing many of these new laws. These bills include clean energy tax credits that invest approximately $120 million annually in electric vehicles, e-bikes, industrial improvements, clean hydrogen, electric lawn and garden equipment, and geothermal energy development.
This package of new laws also supports the development of a clean hydrogen economy, enhances building energy efficiency, increases the use of renewable energy, makes our communities more resilient, improves air quality, advances our climate-smart agriculture work, maximizes our water supply, and helps communities that have historically relied on the oil and gas sector.
“These laws will help to promote Colorado’s environmental resilience, protect our Colorado way of life, and create a healthier future for everyone,” said Jill Hunsaker Ryan, Colorado Department of Public Health and Environment Executive Director. “Colorado continues to lead the nation on climate action by reducing air pollution from greenhouse gases, expanding access to electric vehicle options, and advancing energy efficiency in buildings throughout the state. We will continue to build on this progress and further advance smart climate solutions that will help us secure a sustainable future for our communities.”
These new laws help ensure Colorado continues making progress toward achieving its climate goals first laid out in the state’s 2021 Greenhouse Gas (GHG) Pollution Reduction Roadmap. The state’s current action-oriented goal is to reach greenhouse gas emission reduction targets of 26% by 2025, 50% by 2030, and 100% by 2050, compared to 2005 levels. In Senate Bill 23-016, the state legislature clarified that the 2050 target requires net zero emissions and included new interim targets to ensure the state continues to make progress toward the long-term goal. The Polis administration will continue to refine these goals in an updated version of the roadmap, which is currently in development.
"Under the leadership of Governor Polis, the 2023 Colorado legislative session made great strides to position Colorado for our energy and climate priorities for the 21st century by paving the way to oversee underground carbon storage, utilize geothermal sources for heat and power, boost efforts to improve forest health and reduce wildfire risk and invest in securing water supplies and water conservation measures,” said Dan Gibbs, Executive Director, Colorado Department of Natural Resources. “We will continue to regulate energy development to support the state's energy and environmental goals under the broader mission of the Colorado Energy and Carbon Management Commission, invest in our State tree nursery to help reforest our fire burned landscapes, and work to expand workforce opportunities at our community colleges and high schools in our forestry and wildfire mitigation industries.”
This progress continues work from the past two legislative sessions to address climate issues while prioritizing consumer costs, rural economic development, and access to high quality jobs.
“Colorado continues to be at the forefront of the clean energy transition, always rethinking how we can use energy in a sustainable way to safeguard the health and wellness of generations to come,” said Colorado Energy Office Executive Director Will Toor. “Whether it’s creating more efficient buildings or working with the utilities in Colorado to advance renewable energy, we’re committed to developing cutting edge approaches that slash emissions and ensure a cleaner and more prosperous future.”
The state is taking action across sectors, with legislation that intends to mitigate and adapt to climate change in both urban areas and rural regions of the state.
“Agriculture is an integral part of responding to the challenges presented by a changing climate and Colorado farmers and ranchers have long advocated for protecting our natural resources like soil, water, and air,” said Colorado Commissioner of Agriculture Kate Greenberg. “Colorado continues to be a national leader in farmer- and rancher-led climate resilience and stewardship. Funding for new and existing programs will help CDA provide direct support to producers as they scale up climate smart ag practices. It will also help create a market signal for consumers looking to support producers committed to helping the climate.”
The following is a summary of the newly adopted legislation that CEO, CDPHE, DNR and CDA will help implement:
Environment, climate & air quality (broadly)
House Bill 23-1210 Carbon Management: Directs the Colorado Energy Office to develop a carbon management roadmap and to report to the General Assembly before the 2025 legislative session with any recommendations for additional carbon policy for capturing carbon dioxide emissions before they reach the atmosphere or removing carbon dioxide from the atmosphere for future use or storage.
House Bill 23-1272 Tax Policy That Advances Decarbonization: Creates support for geothermal electricity, through an investment tax credit for exploration of new wells, the drilling and development of wells, and investments made for geothermal electricity production. The bill also provides tax credits for electric vehicles, electric trucks and buses, electric bicycles, geothermal and air source heating and cooling, geothermal electricity, sustainable aviation fuels, and industrial decarbonization. The industrial tax credits build on one-time funding for industrial clean air grants.
Senate Bill 23-016 Greenhouse Gas Emission Reduction Measures: Provides policies to reduce greenhouse gas emissions by creating tax credits for electric-powered lawn and garden equipment between 2024 to 2026, updating greenhouse gas pollution reduction goals, and establishing a regulatory pathway for carbon sequestration. This bill also revises the duties of the Colorado Energy Office; creates new rules governing utility interconnection of distributed generation; and expands the powers of the Colorado Electric Transmission Authority. And, as mentioned above, this bill clarified the state’s greenhouse gas emission reduction targets.
Senate Bill 23-285 Energy And Carbon Management Regulation In Colorado: Changes the name and mission of the Colorado Oil and Gas Conservation Commission (COGCC) to the Energy and Carbon Management Commission and broadens the Commission's authority to regulate deep geothermal resource operations and intrastate underground natural gas storage facilities. The bill also directs a hydrogen pipelines and hydrogen storage study.
Emissions from the built environment
House Bill 23-1005 New Energy Improvement Program Changes: Allows owners of eligible real property to apply to Colorado’s New Energy Improvement District to finance a variety of energy efficiency improvements. The bill also permits owners to apply to finance resiliency and water efficiency improvements.
House Bill 23-1161 Environmental Standards For Appliances: Establishes water and energy efficiency standards for a broad range of appliances and fixtures sold in Colorado. These include: showerheads; urinals; certain lamps; residential ventilating fans; air purifiers; commercial ovens; electric storage water heaters; gas fireplaces; irrigation controllers; certain residential windows, doors, and skylights; and thermostats. These standards will go into effect at varying points by 2026.
House Bill 23-1233 Electric Vehicle Charging and Parking Requirements: Requires the state electrical board to adopt a rule requiring the multifamily electric vehicle (EV) pre-wiring requirements created by the state’s Energy Code Board. The bill also prohibits unreasonable restrictions on EV parking and provides a temporary exemption in certain property taxes imposed on EV chargers.
Renewable energy and utilities
House Bill 23-1039 Electric Resource Adequacy Reporting: The bill requires each load-serving entity in the state, or its designated wholesale electric supplier, to create a resource adequacy annual report by April 1 each year, beginning in 2024.
House Bill 23-1234 Streamline Solar Permitting and Inspection Grants: Creates a streamlined solar permitting and inspection grant program. The program will offer grant money to local governments to implement free automated permitting and inspection software.
House Bill 23-1252 Thermal Energy: This bill creates a regulatory pathway to develop thermal energy networks, such as geo-exchange district heating. Specifically, this will pave the way for public utilities regulated by the Public Utilities Commission (PUC) to develop, construct, and operate these networks.
House Bill 23-1281 Advance The Use Of Clean Hydrogen: Puts a regulatory framework in place to support the development of a hydrogen economy in Colorado and bolster the Western Interstate Hydrogen Hub application, a four-state coalition application to the U.S. Department of Energy. This includes defining Colorado’s approach to greenhouse gas emissions accounting for hydrogen, creating a state tax credit for the use of clean hydrogen, designed to complement the federal production tax credit, and establishing a process at our PUC for consideration and approval of utility investment in clean hydrogen production.
Senate Bill 23-092 Agricultural Producers Use Of Agrivoltaics: Directs CDA to oversee a task force and complete a feasibility study on the use of agrivoltaics and dry digesters to reduce greenhouse gas emissions in Colorado. Also, this bill requires the Colorado Water Conservation Board to complete a study on the use of aquavoltaics in Colorado.
Senate Bill 23-198 Clean Energy Plans: Requires that certain utilities and other entities update their clean energy plans with the state. These plans must aim to reduce greenhouse gas emissions associated with electricity sales to achieve at least an 80% reduction in emissions caused by retail electricity sales by 2030 relative to 2005 levels.
Senate Bill 23-291 Utility Regulation: Sets rates for calculating the net present value of future carbon-based fuel costs and requires the public utilities commission to establish rules to limit the amount of rate case expenses that an investor-owned electric or gas utility may recover from the utility's customers. Specifically, the law prohibits an investor-owned electric or gas utility from recovering various costs from its customers under a series of circumstances.
Senate Bill 23-292 Labor Requirements For Energy Sector Construction: Creates a new category of public works projects defined as "energy sector public works projects." Also requires these projects to comply with existing laws requiring the utilization of apprenticeships and ensures that apprentices are covered by prevailing wage law for energy sector public works projects.
Transportation and expanding public transit
House Bill 23-1101 Ozone Season Transit Grant Program Flexibility: Increases the flexibility of the Ozone Season Transit Grant program by allowing eligible transit agencies to use funds for zero-fare transit when ozone levels in the area are the highest, rather than just during the previously mandated period of June 1 to August 31. This bill also creates additional latitude in funding allocations.
Senate Bill 23-236 Electric Vehicle Service Equipment Fund: The bill creates the Electric Vehicle Service Equipment Cash Fund for use by the Department of Military and Veterans Affairs (DMVA). The DMVA is authorized to spend money from the fund to defray the costs associated with operating electric vehicle services equipment. This new fund’s creation and operation will allow DMVA to charge the federal government, military, and civilians for using these EV charging stations. The DMVA will be able to recoup costs and effectively open these stations up to the public.
Climate-smart investments in forestry and wildfire resilience
House Bill 23-1060 Update to State Forest Service Tree Nursery: Instructs the Colorado State Forest Service to make certain upgrades and improvements to its seedling tree nursery in order to expand its capacity and ability to contribute to reforestation efforts in the state.
House Bill 23-1075 Wildfire Evacuation And Clearance Time Modeling: Requires the office of emergency management to study the efficacy and feasibility of local or interjurisdictional emergency management agencies overseeing wildfire risk areas to integrate evacuation and clearance time modeling into the emergency management plans.
Senate Bill 23-005 Forestry and Wildfire Mitigation Workforce: Contains a range of programs at the Colorado State Forest Service and our community and technical colleges focused on the long term sustainability of our forestry workforce and developing educational materials for high school students about career opportunities in forestry and wildfire mitigation industries. Also allocates general fund money to the Wildfire Mitigation Capacity Development Fund, Colorado Strategic Wildfire Acton Program and authorizes the expansion and creation of forestry programs.
Senate Bill 23-166 Establishment Of A Wildfire Resiliency Code Board: Establishes a Wildfire Resiliency Code Board in the Department of Public Safety’s Division of Fire Prevention and Control to adopt statewide codes and standards that ensure community safety and increase resilience to wildfires.
Water consumption
Senate Bill 23-177 2023 Colorado Water Conservation Board Water Projects Appropriations: Contains $82 million in funding for critical water and infrastructure projects. The bill dedicated $25.2 million for water plan grant funding, and a historic $34 million to assist with Colorado’s threatened and endangered species. The bill allocated $20 million for drinking water for rural Colorado through the Arkansas Valley Conduit, $2 million for Water Plan Action Advancement, $1 million for water forecasting, and $500,000 for watershed restoration efforts.
Senate Bill 23-214 2023-24 Long Bill: Funds a number of new climate-related positions, including a Climate and Drought Smart Agriculture Marketing Specialist and an Agricultural Water Advisor.
Just transition for workers and communities
House Bill 23-1074 Study Workforce Transitions To Other Industries: Directs a study to explore workforce transitions for oil and gas workers and workers impacted by automation. The study will also develop policy and incentive proposals for programs transitioning workers to existing and emerging industries.
House Bill 23-1247 Assess Advanced Energy Solutions In Rural Colorado: Requires the state to conduct studies to assess the use of advanced energy solutions, such as geothermal, clean hydrogen, gas with carbon capture, long duration storage, renewables with storage, and advanced nuclear. One study will evaluate potential energy development in northwestern Colorado and western Montrose County. An additional other study will assess the potential for the development of new energy resources in southeastern Colorado.
Senate Bill 23-283 Mechanisms for Federal Infrastructure Funding: Adds $84 million to the state’s existing Infrastructure Investment and Jobs Act (IIJA) cash fund and also allows Colorado communities to use money from the fund for planning and grant matching for federal Inflation Reduction Act (IRA) grant applications.