Tell the House Committee that Utilities Should be Rewarded (or Penalized) Based on their Carbon Emissions
March, 25th, 1:30 pm
Colorado State Capitol, Room 0112
200 E. Colfax Ave, Denver
The Colorado House Transportation and Energy Committee will decide whether to move forward with HB 15-1250, which seeks to initiate an investigation into performance-based ratemaking. Tell the legislature that performance-based ratemaking should reward the utilities for reducing their carbon emissions.
Currently, most utilities’ profits are determined by how much capital they deploy, plus their allowed rate of return on that capital. In other words, the more they spend on their infrastructure, the more they are able to make. The idea behind performance-based ratemaking is to regulate the utilities’ profits according to how well they meet goals that we set for them. The goals or metrics can range from increasing reliability of the grid to reducing costs to increasing energy efficiency to reducing carbon emissions.
Once the metrics are determined, the utility either gets rewarded or penalized based on how well they adhere to the goals, as opposed to how much capital they deploy. The tricky part is making sure the goals explicitly include things that are important to us, like reducing their carbon emissions.
Colorado State Representative Max Tyler has introduced a bill that would require the PUC to investigate performance-based ratemaking based on a variety of metrics, including reducing carbon emissions. We are happy to see that reducing carbon emissions is included in the list of metrics. It is crucial that minimizing carbon emissions remains a top priority.
If this bill passes, it will be the beginning of a process that can integrate metrics beyond short-term costs into the ratemaking process, including climate.
Tell the committee that regardless of whether or not they go forward with this bill, we need to integrate climate and public heath impacts into our electricity planning.
If you can’t make it to the hearing, please email the committee members:
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