FACT SHEET:
2035 Clean Heat Plan Target Rulemaking
Proceeding No. 25R-0309G
Status
On Dec.1, 2025, the PUC issued a written decision setting 2035 greenhouse gas emission reduction targets for certain natural gas utilities regulated by the Commission. The decision:
- Set a 41 percent reduction target for 2035 from the 2015 baseline
- Postponed setting future targets for 2040, 2045 and 2050 until 2032
- Did not set a limit for the amount of recovered methane that may be used to achieve the targets
In July of 2025, the PUC began the rulemaking process to set the targets for 2035. A public comment hearing was held on Sept. 18 and written comments were welcomed throughout the process.
Per the Commission’s usual process, any individual, stakeholder or organization may request that the Commission reconsider its decision on these rules, by filing an Application for Rehearing, Reargument, or Reconsideration. Applications are due by Dec. 22. The Commission will consider these requests and publicly deliberate at a January weekly meeting. Any one wishing to make public comment may do so online or by emailing dora_puc_comments@state.co.us and include the Proceeding No. 25R-0309G in the subject line. More information on how to submit public comment can be found on the PUC website:: How to Participate in a Proceeding | Public Utilities Commission.
Background
Senate Bill 21-264 requires that investor-owned gas utilities with fewer than 90,000 customers implement clean heat plans to meet specific emission targets and advance the statewide goal to reduce greenhouse gas emissions. The legislation set initial GHG reduction targets for 2025 and 2030 and required the PUC to set out-year targets via rulemaking. SB21-264 also established that the Commission may specify by rule a maximum amount of emission reductions achievable by utilizing recovered methane for clean heat plans covering years after 2030, if the Commission determines that the requirements further investment in Colorado communities, reduce greenhouse gas emissions, are cost-effective, and are in the public interest.
Recognizing the potential cost to ratepayers of implementing the strategies within these plans, the legislature also set a cost threshold of 2.5% of annual gas bills. Each utility’s Clean Heat Plan application must include scenarios that illustrate the estimated cost of complying with the GHG reduction targets as well as the amount of GHG reduction achievable without exceeding the 2.5% cost cap. To date, the PUC has approved two Clean Heat Plans. A third is still pending before the Commission. More information on current and previous Clean Heat Plans can be found here.
| Clean Heat Plan Requirements | |
|---|---|
| Utilities & Customers Impacted | Applies to three investor-owned gas utilities: Atmos Energy, Black Hills Energy and Xcel Energy. If a customer does not take natural gas service from these 3 utilities, there is no impact. |
| How will this be achieved? | Utilities can propose to meet the clean heat targets using combinations of energy efficiency, electrification, recovered methane, green hydrogen, thermal energy, and pyrolysis of tires. Customers may voluntarily participate in these plans by taking advantage of rebates and incentives to adopt electric heat pumps or complete energy efficiency upgrades in their homes and businesses. |
| Clean Heat Targets (from a 2015 baseline) |
|
| Recovered Methane | May continue to be used to achieve target. No maximum percentage set in rule. |
| Other Approval Considerations | Must consult with the Colorado Department of Public Health and Environment. Must consider whether plans achieve reductions at the lowest reasonable cost and rate impact, taking into account customer bills that may be impacted from investments.
|
| For More Information | All information on this docket can be found in EFilings. More information on Clean Heat Plans and Proceeding No. 25R-0309G can be found at puc.colorado.gov/cleanheatplans |
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