Clean Heat Plan for Natural Gas Sector Emission Reductions

Problem

 Colorado must reduce greenhouse gas emissions from all sectors in order to meet science-based reduction goals, and the built environment produces a significant amount of pollution from the use of gas to heat homes and businesses and to heat water in those buildings. In addition, gas leaks in the supply chain and commercial and industrial processes contribute to greenhouse gas pollution. There are also many sources of fugitive methane from landfills, coal mines, wastewater treatment plants, etc that need to be mitigated.

Solution

This policy, introduced as SB21-264, implements a quantifiable performance standard that enables Colorado utilities to use energy efficiency, biomethane, hydrogen, recovered methane, beneficial electrification of customer end uses, cost-effective leak reductions, and more to efficiently lower greenhouse gas emissions. It requires gas distribution utilities to submit Clean Heat Plans, requiring commission approval, that meet Clean Heat Targets: as compared to a 2015 baseline, utilities must achieve a 4% reduction in greenhouse gas emissions by 2025 and a 22% reduction by 2030. A cost cap will be established that limits the cost of each utility’s Clean Heat Plan to a maximum of 2.5% of annual gas bills for all full-service customers as a whole.