Clean Heat Plans
What is a Clean Heat Plan?
In 2021, the General Assembly (SB 21-264) required gas distribution utilities—utilities that procure and distribute gas to retail customers (e.g. Black Hills, Colorado Natural Gas)—to reduce greenhouse gas emissions 4% by 2025 and 22% by 2030, from a 2015 baseline.
To show that they are meeting these targets, gas utilities began filing Clean Heat Plans to the Commission starting in 2023. These plans can include a range of measures, including:
- Energy efficiency programs, which could allow you to add more insulation at a reduced cost.
- Recovered methane, including the gas that is captured at landfills and water purification facilities.
- Green hydrogen, where water is converted to hydrogen through electrolysis using renewable energy.
- Beneficial electrification, which could allow you to switch from a gas furnace to an electric heat pump for heating, or from a gas to an electric stove for cooking at a reduced cost.
SB264 requires that utility plans be of the lowest reasonable cost, meaning a reasonable cost that still allows them to manage reliability and other state goals. Specifically, the legislation set a cost cap of 2.5% of annual gas bills for all full-service customers. The Commission may approve costs in excess of the cap only if it finds the Clean Heat Plan to be in the public interest, that it includes mitigations for income-qualified customers, and that the benefits exceed the costs.
Each gas utility is required to file a Clean Heat Plan with the Commission according to the schedule described below.
- No later than August 1, 2023 Xcel Energy shall file its first application for approval of a clean heat plan.
- No later than January 1, 2024, all gas distribution utilities other than Xcel shall file their first applications for approval of a clean heat plan.
- All gas distribution utilities shall file subsequent clean heat plans not less often than every four years, unless otherwise directed by the Commission.
Open Proceedings
Proposed Rulemaking Amending Clean Heat Plan Greenhouse Gas Reduction Targets
The legislature, specifically, at § 40-3.2-108(10), C.R.S., set a deadline of Dec. 1, 2025, for the PUC to set a 2035 Greenhouse Gas (GHG) reduction target for gas utility clean heat plans. The current targets are a 4% reduction by 2025 and 22% by 2030, from a 2015 baseline. The PUC is setting these new targets through a rulemaking process. Per statute, the Air Pollution Control Division of the Colorado Department of Public Health and Environment must be consulted.
| Milestone | Scheduled Completion Date | Notes |
|---|---|---|
| Notice of Proposed Rulemaking (NOPR) | July 14, 2025 | |
| Initial Public Comments | August 15, 2025 | |
| Response Comments | September 12, 2025 | Any person wishing to file comments responding to the initial comments is requested to file comments by Sept. 12, 2025. |
| Public Hearing | September 18, 10 AM - 5 PM | Link to recording. |
| Recommended Decision | December 1, 2025 | Link to decision. |
| Milestone | Summary | Scheduled Completion Date |
|---|---|---|
| Application Filed | Filed date of the Application | December 29, 2023 |
| Decision Referring to an Administrative Law Judge | Preliminary decision by the Commissioners directing certain aspects or phases of the case to be handled by an Administrative Law Judge. | March 7, 2024 |
| Public Comment Hearing | Public Comment Hearings can be virtual and/or in person hearings. The public is allowed to comment orally on the rate change and requested actions. | April 30, 2024 July 9, 2024 |
| Evidentiary Hearing | Hearing held on the merits of the Application. All parties and the Applicant provide oral testimony in response to cross-examination by other parties and the Commission. | August 28-29, 2024 |
| Settlement Agreement | Parties to the proceeding filed a proposed settlement agreement. | October 29, 2024 |
| Recommended Decision | ALJ issued Recommended Decision | |
| Commission Decision | Final ruling on all issues presented in the proceeding. | February 12, 2025 |
| Rehearing, Re-argument, or Reconsideration | A motion for “rehearing, re-argument, or reconsideration” on application filed by Black Hills. The settlement agreement was withdrawn. | March 4, 2025 |
| Decision | Commission Decision Addressing Application For Rehearing, Re-argument, Or Reconsideration | April 8, 2025 |
| Hearing | Hearing before the PUC Commissioners. | April 10, 2025 |
| Decision | Commission Decision Requiring Filing of Consensus Procedural Schedule. | April 17, 2025 |
| Notification | Notification Report of Consensus Procedural Schedule. | May 1, 2025 |
| Decision | Commission Decision Establishing Procedural Schedule. | May 20, 2025 |
| Pre-hearing motions | Pre-Hearing Motions due | October 10, 2025 |
- Past Clean Heat Plan Decisions
Public Service Company of Colorado (Xcel Energy) - Final Decision July 2024
Proceeding Number 23A-0392EG
On August 1, 2023, Xcel/Public Service Company of Colorado (PSCo) initiated this docket seeking approval of its 2024-2028 Clean Heat Plan (CHP). The plan commits $176 million per year to PSCo’s goal of a 30% reduction in emissions from its natural gas local distribution company business below current levels by 2030—a 2.2-million-ton reduction—in compliance with SB 21-264 (2021). PSCo’s CHP includes six emission reduction resources: demand side management, electrification, recovered methane, hydrogen, certified natural gas, and carbon offsets. PSCo projects the CHP will save customers $100 million annually on average through 2030.
Xcel’s CHP was approved by the Commission in June 2024. In 2026, Xcel will file its next CHP, which will focus on ensuring compliance with the 2030 target.Atmos Energy Corporation - Final Decision November, 2024
Proceeding No. 23A-0632G
The Colorado PUC authorized Atmos Energy’s (Docket No. 23A-0632G) respective Clean Heat Plan (CHP) applications in October 2024.
Atmos’ CHP includes: (1) increased energy efficiency measures; (2) a manufactured homes pilot; (3) establishes that total expenditures over the plan period will not exceed $11.9 million; (4) establishes that at least 25% of overall residential CHP expenditures shall be targeted to residential income-qualitied customers; and (5) confirms that CHP expenditures during the plan period are within the statutory cost cap.Atmos will recover CHP costs through a CHP rider each applicable year regardless of the company’s actual CHP expenditures in that year. Any excess collections will be recorded in a regulatory liability for future use on CHP resources. The PUC directed Atmos to conduct a beneficial electrification analysis as part of its next, updated Clean Heat Plan filing by May 1, 2027. This filing will address the cumulative cost recovery from the CHP Rider tariff, including any surplus or deficit in cost recovery from the tariff's effective date to December 31, 2027
Summit Utilities/Colorado Natural Gas (CNG)
Summit Utilities, operating as Colorado Natural Gas, did not submit a Clean Heat Plan to the Colorado Public Utilities Commission (PUC) because it was not required to do so under the state's Clean Heat Standard. The Clean Heat Standard, established by House Bill 21-1266 and implemented through Senate Bill 21-264, mandates that only gas utilities with more than 90,000 retail customers must submit Clean Heat Plans to achieve greenhouse gas emission reductions of 4% by 2025 and 22% by 2030 compared to 2015 levels. Summit Utilities, with approximately 70,000 customers in Colorado, falls below this threshold and is thus exempt from the requirement. Smaller utilities like Summit are instead subject to alternative compliance measures, such as cost caps and limited recovery of clean heat resource costs, as outlined in the PUC's rules.