State Energy Efficiency Policy Database

Xcel Energy/PSCo is the major investor-owned utility in Colorado. Xcel Energy/PSCo administers its programs after they have been approved by the Colorado Public Utilities Commission. Colorado's electric utilities saved 255 GWh in 2009. Reported electricity savings for 2010 are in the State Spending and Savings Tables.

In 2007, House Bill 07-1037 directed the PUC to set energy savings goals for electric utilities and to create financial incentives for cost-effective efficiency programs. In 2008, the PUC set goals for Xcel Energy/PSCo. These goals call for the utility to help its customers reduce their electricity use in 2020 to about 11.5% less than their energy use during 2009. The programs are expected to save 3,669 GWh.

Holy Cross Energy, a rural electric cooperative utility, recently approved a portfolio of energy efficiency programs for 2012-2016 that will achieve savings equal about 0.5% of retail sales per year. 

House Bill 1164 now requires the PUC to include the possible impacts of future greenhouse gas regulation on electricity prices when evaluating utility resource plans.

Natural gas programs are also available in Colorado. Signed into law May 22,2007, House Bill 07-1037 required that the Colorado Public Utilities Commission set energy savings goals for natural gas.

Atmos Energy, a natural gas utility, estimated that there is an economic potential to reduce natural gas usage in Coloradoby 3 to 4 million dekatherms between 2009 and 2013. The utility reported a total natural gas consumption of 12 million dekatherms in 2008. The achievable potential is likely to be lower than the economic potential.

In Colorado, Xcel Energy offers self-direct programs to customers with average demand greater than 2 MW and annual consumption greater than 10 GWh. Companies can aggregate to meet the minimum thresholds.  Self-direct customers continue to pay their assigned cost-recovery mechanism (CRM) fees and self-direct projects are reimbursed through a rebate of up to 50% of the incremental project costs.  Self-direct customers provide their own engineering analysis and must meet the same total resource cost test as all the other industrial and commercial offerings.  More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

Links:

• Colorado House Bill 07-1037
• Recharge Colorado
• Southwest Energy Efficiency Project (SWEEP)
• Database of State Incentives for Renewables and Efficiency

Summary: Electric: PSCo and Black Hills Energy (BHE) both aim for 0.9% of sales in 2011 and increase to 1.35% (1.0% for BHE) of sales in 2015 and then 1.66% (1.2%) of sales in 2019.  Natural Gas: Savings targets commensurate with spending targets (at least 0.5% of prior year’s revenue).

The Colorado legislature passed HB-07-1037 in April 2007, which amended Colorado statutes C.R.S. 40-1-102 and 40-3.2-101-105 by requiring the Colorado Public Utilities Commission (COPUC) to establish energy savings goals for investor-owned electric and gas utilities. The bill also requires the COPUC to provide utilities with financial incentives for implementing cost-effective energy-saving programs. The COPUC must report annually on the progress made by investor-owned natural gas and electric utilities in meeting their demand side management goals.   

The EERS statute does not directly set a fixed schedule of statewide percentages of energy savings to be achieved by particular years, nor does it require the acquisition of all cost-effective energy efficiency resources. Instead it sets an overall multi-year statewide goal for investor-owned utilities of at least five percent of the utility's retail MWh energy sales in the base year (2006) to be met by the end of 2018, counting savings in 2018 and including savings from DSM measures installed starting in 2006.  The law empowers COPUC to set interim goals for utilities and to modify goals.

In a May 2008 decision, the COPUC set energy savings goals for PSCo for the period 2009-2020. The goals set energy saving targets of 0.53% of retail sales in 2008, ramping up to 1% in 2015, and 1.2% in 2019. The savings would amount to 3,669 GWh over the 12-year period (Docket No. 07A-420E). The Commission accepted modified goals for PSCo for 2009 and 2010 in a Settlement Agreement in Decision R08-1243 in February 2009, which were designed to save approximately 0.6% (176 GWh) in 2009 and 0.8% (237 GWh) in 2010, exceeding the mandated savings in both years.  PSCo plans to achieve 255 GWh in 2011 (PSCo 2011 DSM Plan).

In May 2011, COPUC approved new goals for PSCo for the 2012-2020 period. The goals are approximately 130 percent of the annual goals approved in May 2008, beginning at 1.14% of sales in 2012, ramping up to 1.35% in 2015, and reaching 1.68% in 2020. The goals set out to achieve 3,984 GWh in the nine-year period (Docket No. 10A-554EG).

Xcel Energy is planning to ramp up its energy efficiency programs in 2012 and 2013. After negotiations among interveners, Xcel agreed to a number of program improvements as detailed in a Settlement Agreement submitted to the Colorado PUC in November. If the Settlement Agreement is approved by the PUC, Xcel will increase energy savings by nearly 40% in 2012 and an additional 10% in 2013.

Black Hills Energy adopted an efficiency plan that aims to save 0.53% of projected sales in 2009 (10,287 MWh), 0.76% in 2010 (15,156 MWh), and 0.80% in 2011 (16,522 MWh) (COPUC Docket No. 0BA-51BE). The statutory minimum goal for Black Hills over the ten-year period is 93.9 GWh, based on 2006 sales (Public Utilities Commission Report, 2009).

For investor-owned natural gas utilities, the EERS legislation structured the requirement in two parts. First, the natural gas IOU’s must set DSM spending targets of more than 0.5% of revenues from customers in the prior year. Energy savings targets are then established by COPUC commensurate with spending and stated in terms of quantity of gas saved per dollar of efficiency program spending.

Links:

• Authority: CRS 40-3.2-101, et seq. 
• Docket No. 07A-420E, Decision C08-0560
• PSCo 2011 DSM Plan
• Docket No. 08A-518E, Decision No. R09-0542
• Public Utilities Commission Report, April 28, 2009.
• Docket No. 10A-554EG, Decision No. C11-0442
• Xcel Settlement Agreement for 2012-2013 DSM Programs 

The 2009/10 Demand Side Management (DSM) Plan, approved in 2008, includes a three-part incentive package that included a $2 million “disincentive offset” for each year that Public Service Colorado implement an approved DSM plan, a performance incentive and cost recovery via a rider on a prospective basis. A similar three-part package was approved for Black Hills. In each case the performance incentives are available for achieving efficiency targets. The incentive (including the disincentive offset) is capped at 20% of PSCo’s annual DSM expenditures.

For natural gas utilities, the incentive bonus is capped at 25% of the expenditures or 20% of the net economic benefits of the DSM programs, whichever amount is lower.

Links:

• Colorado State Incentives for Renewables and Efficiency