Concerning the development of thermal energy resources.
Summary
SB26-142 is a broad geothermal and thermal energy development bill. It authorizes local governments and special districts to aggregate thermal energy demand, enter into thermal energy service agreements, contract with private operators, and finance thermal energy network infrastructure through bonds or other lawful financing tools. The bill also clarifies that these local thermal energy activities are not public utilities and are not subject to Public Utilities Commission regulation, except where the bill expressly provides otherwise.
The measure expands state support for geothermal development in several ways. It directs the Colorado Energy and Carbon Management Commission and the Colorado Geological Survey to collect geothermal resource data, evaluate potential uses of existing wells and new test wells, and produce recommendations for safe and effective geothermal development by November 15, 2026. It also requires investor-owned electric utilities to identify, solicit, and seek commission approval for small-scale geothermal projects up to 25 megawatts and large-scale projects above 25 megawatts, with evaluation focused on cost, reliability, greenhouse gas reductions, and public interest. In addition, it increases the allowable size of community geothermal gardens from 5 megawatts to 25 megawatts and requires qualifying retail utilities to purchase a minimum amount of electricity from them as determined by the commission.
Impact
The bill amends multiple parts of Colorado law governing local government powers, municipal utilities, special districts, geothermal resource data collection, community geothermal gardens, and utility resource planning. It creates new express statutory authority for thermal energy networks and geothermal service agreements, removes the voter-approval requirement for municipal heating and cooling systems using geothermal or waste/cogenerated heat, and limits PUC jurisdiction over local-government thermal energy systems and private operators acting on their behalf. It also imposes new planning and solicitation duties on investor-owned electric utilities and adds labor standards for qualifying geothermal projects treated as energy sector public works projects.
Sentiment
The overall sentiment reflected in the bill text is strongly supportive of geothermal and thermal energy deployment. The legislative declaration emphasizes reducing soft costs, legal ambiguity, and project delays, especially for small and rural communities, while improving affordability and advancing clean heat and emissions-reduction goals. The bill was ultimately signed by the governor, indicating enactment support at the end of the process.
Contention
The main points of contention appear to center on regulatory authority, utility boundaries, and financing risk. The bill carefully preserves PUC authority over regulated utilities while exempting local thermal energy networks from being treated as public utilities, which suggests concern about overregulation and franchise conflicts. It also limits the bill’s data-collection program to available appropriations or gifts and states that it should not reduce existing funding commitments, reflecting sensitivity to fiscal impacts. Another likely area of debate is the requirement that investor-owned utilities solicit geothermal projects and potentially recover costs from ratepayers, balanced against the bill’s requirement that costs be reasonable and in the public interest.