Colorado § 40-3.2-104 - Electricity utility demand-side management programs - rules - annual report - definition.

§ 40-3.2-104. Electricity utility demand-side management programs - rules - annual report - definition.

(1) It is the policy of the state of Colorado that a primary goal of electric utility least-cost resource planning is to minimize the net present value of revenue requirements. The commission may adopt rules as necessary to implement this policy.

(2) (a) The commission shall establish energy savings and peak demand reduction goals to be achieved by an investor-owned electric utility, taking into account the utility's cost-effective demand-side management potential, the need for electricity resources, the benefits of demand-side management investments, and other factors as determined by the commission.

(b) The energy savings and peak demand reduction goals must be at least five percent of the utility's retail system peak demand, measured in megawatts, in the base year and at least five percent of the utility's retail energy sales, measured in megawatt-hours, in the base year. The base year is 2006. The goals shall be met in 2018, counting savings in 2018 from demand-side management measures installed starting in 2006. The commission may establish interim goals and may revise the goals as it deems appropriate.

(c) Commencing January 1, 2019, the energy savings and peak demand reduction goals must be at least five percent of the utility's retail system peak demand, measured in megawatts, in the base year and at least five percent of the utility's retail energy sales, measured in megawatt-hours, in the base year. The base year is 2018. The goals shall be met in 2028, counting savings in 2028 from demand-side management measures installed starting in 2019. The commission may establish interim goals and may revise the goals as it deems appropriate.

(3) The commission shall permit electric utilities to implement cost-effective electricity DSM programs to reduce the need for additional resources that would otherwise be met through a competitive acquisition process.

(4) The commission shall ensure that utilities develop and implement DSM programs that give all classes of customers an opportunity to participate and shall give due consideration to the impact of DSM programs on nonparticipants and on low-income customers.

(5) The commission shall allow an opportunity for a utility's investments in cost-effective DSM programs to be more profitable to the utility than any other utility investment that is not already subject to special incentives. In complying with this subsection (5), the commission shall consider, without limitation, the following incentive mechanisms, which shall take into consideration the performance of the DSM program:

(a) An incentive to allow a rate of return on demand-side management investments that is higher than the utility's rate of return on other investments;

(b) An incentive to allow the utility to accelerate the depreciation or amortization period for demand-side management investments;

(c) An incentive to allow the utility to retain a portion of the net economic benefits associated with a DSM program for its shareholders;

(d) An incentive to allow the utility to collect the costs of DSM programs through a cost adjustment clause;

(e) Other incentive mechanisms that the commission deems appropriate.

(6) Each investor-owned electric utility shall submit an annual report to the commission describing the DSM programs implemented by the electric utility in the previous year. The report shall document the following:

(a) Program expenditures, including incentive payments;

(b) Peak demand and energy savings impacts and the techniques used to estimate those impacts;

(c) Avoided costs and the techniques used to estimate those costs;

(d) The estimated cost-effectiveness of the DSM programs;

(e) The net economic benefits of the DSM programs; and

(f) Any other information required by the commission.

(7) For purposes of this section, "electric utility" or "utility" means "investor-owned utility".

Source: L. 2007: Entire section added, p. 984, § 3, effective May 22; (7) added, p. 1172, § 3, effective May 23. L. 2017: (2) amended, (HB 17-1227), ch. 209, p. 813, § 1, effective August 9. L. 2020: (5)(a) and (5)(b) amended, (HB 20-1402), ch. 216, p. 1059, § 72, effective June 30.

Cross references: For the definition of DSM programs, see § 40-1-102.