Concerning measures to reduce emissions from certain electric generating units in the state.
HB 26-1226 directs Colorado regulators to reduce emissions from certain older electric generating units and to manage the reliability and cost impacts of federal actions that require plants to stay online past planned retirement dates. The bill requires the Air Quality Control Commission to adopt a final rule by July 2029 setting nitrogen oxides and sulfur dioxide limits for covered electric generating units—those owned or operated by electric utilities in Colorado that emitted at least 200 tons of NOx, SO2, or both in 2024. The rule must be based on modern pollution-control technology, require compliance after December 31, 2034, and exempt units that have already shut down, converted to natural gas or fuel oil only, or installed both specified control systems before the end of 2029. Owners or operators must file quarterly emissions reports to show compliance, and utilities evaluating continued operation after 2034 must include cost estimates for compliance.
The bill also creates reporting and cost-recovery requirements for utilities subject to a federal order that keeps a unit operating beyond its scheduled retirement. Beginning 150 days after such an order and every 90 days thereafter, investor-owned utilities and wholesale electric cooperatives must report operating costs, capital costs, generation hours, output, and curtailment impacts to the Public Utilities Commission, which must make the information public unless properly designated confidential. Investor-owned utilities may also seek a financing order to recover costs associated with complying with the federal order, using Colorado’s securitization framework.
In addition, HB 26-1226 requires the Public Utilities Commission, when approving certain supply-side portfolios for investor-owned utilities serving more than 500,000 customers, to approve enough accredited capacity to let the utility meet retirement dates or operating restrictions for covered units and comply with state carbon-dioxide reduction requirements. The bill ties this requirement to Colorado’s existing clean-energy and emissions-reduction laws and keeps it in place until the utility has met specified CO2 reduction targets or retired all covered units, whichever occurs later. The bill also requires the commission to report to the General Assembly in 2029 on any covered units subject to a federal order and to provide stakeholder recommendations on whether the law should be amended if such orders are in effect.
The overall sentiment reflected in the bill text is supportive of both emissions reductions and utility reliability, while also expressing concern about federal intervention in state utility planning. The legislative declaration says federal orders can raise costs for ratepayers, crowd out cheaper replacement resources, and increase pollution, but it also emphasizes the need to modernize older plants if they continue operating and to ensure resource adequacy. The bill passed and was signed by the governor, indicating broad enough support to become law.
The main points of contention are likely to be the cost and feasibility of retrofitting older plants, the extent of utility reporting and public disclosure, and whether the state should require additional pollution controls on units that are being kept online by federal order. Another potential issue is the balance between state clean-energy mandates and reliability concerns, especially for a large investor-owned utility that must maintain enough accredited capacity while transitioning away from covered generating units.
The bill adds new provisions to Colorado law governing air quality regulation, utility planning, and utility cost recovery. It authorizes the Air Quality Control Commission to set emissions limits for certain high-emitting electric generating units, requires quarterly emissions reporting to the Department of Public Health and Environment, creates reporting obligations to the Public Utilities Commission for units kept online by federal order, and allows investor-owned utilities to seek securitization-style financing orders for related costs. It also requires the PUC to account for accredited capacity when approving certain resource portfolios for large investor-owned utilities, reinforcing compliance with Colorado’s carbon-dioxide reduction requirements and retirement schedules for covered units.
The bill’s tone is generally pro-environment and pro-reliability, with lawmakers framing it as a response to both pollution from older power plants and the cost pressures created by federal orders that delay retirements. The legislative declaration suggests support for modern pollution controls, transparency about costs, and ensuring utilities have enough replacement resources. The fact that the bill was signed into law suggests the measure had sufficient support, and the available record does not show recorded floor or committee opposition in the provided materials.
The likely areas of disagreement are between utilities, regulators, and consumer advocates over who should bear the costs of keeping aging plants operating, how much disclosure should be required, and whether the state should mandate retrofits for units that remain online past planned retirement dates. Utilities may be concerned about compliance costs, operational constraints, and the interaction between state requirements and federal orders, while environmental advocates may favor stronger emissions controls and transparency. Another point of tension is the bill’s special treatment of large investor-owned utilities, which may raise questions about fairness and the adequacy of capacity planning during the clean-energy transition.