C.R.S.
Section 40-2-127.5
Community energy funds
- community geothermal gardens
- rules
- legislative declaration
- definitions
- repeal
(1)
Legislative declaration.(a)
Local communities can benefit from the further development of renewable energy, energy efficiency, conservation, and environmental improvement projects, and the general assembly hereby encourages electric utilities to establish community energy funds for the development of such projects;(b)
It is in the public interest that broader participation in geothermal electric generation by Colorado residents and commercial entities be encouraged by the development and deployment of distributed geothermal electric generating facilities known as community geothermal gardens in order to:(I)
Provide Colorado residents and commercial entities with the opportunity to participate in geothermal electricity generation;(II)
Allow renters, low-income utility customers, and agricultural producers to own interests in such geothermal generation facilities;(III)
Allow interests in such geothermal generation facilities to be portable and transferrable; and(IV)
Leverage Colorado’s geothermal electricity generating capacity through economies of scale.(2)
Definitions.(a)
Intentionally left blank —Ed.(I)
“Community geothermal garden” means a geothermal facility that produces electricity from the earth’s heat with a nameplate rating within the range specified under subsection (2)(a)(IV) of this section that is located in or near a community served by a qualifying retail utility where the beneficial use of the electricity generated by the facility belongs to the subscribers to the community geothermal garden. There must be at least ten subscribers. The owner of the community geothermal garden may be the qualifying retail utility or any other for-profit or nonprofit entity or organization, including a subscriber organization organized under this section, that contracts to sell the output from the community geothermal garden to the qualifying retail utility. A community geothermal garden is deemed to be “located on the site of customer facilities.”(II)
A community geothermal garden constitutes “retail distributed generation” within the meaning of section 40-2-124.(III)
Notwithstanding any provision of this section or section 40-2-124 to the contrary, a community geothermal garden constitutes retail distributed generation for purposes of a cooperative electric association’s compliance with the applicable renewable energy standard under section 40-2-124.(IV)
A community geothermal garden must have a nameplate rating of five megawatts or less; except that the commission may, in rules adopted pursuant to subsection (3)(b) of this section, approve the formation of a community geothermal garden with a nameplate rating of up to ten megawatts.(b)
“Subscriber” means a retail customer of a qualifying retail utility who owns a subscription and who has identified one or more physical locations to which the subscription is attributed. Such physical locations must be within the service territory of the same qualifying retail utility as the community geothermal garden. The subscriber may change from time to time the premises to which the community geothermal garden electricity generation is attributed, so long as the premises are within the same service territory.(c)
“Subscription” means a proportional interest in geothermal electric generation facilities installed at a community geothermal garden, together with the renewable energy credits associated with or attributable to such facilities under section 40-2-124. Each subscription must be sized to represent at least one kilowatt of the community geothermal garden’s generating capacity and to supply no more than one hundred twenty percent of the average annual consumption of electricity by each subscriber at the premises to which the subscription is attributed, with a deduction for the amount of any existing geothermal facilities at such premises. Subscriptions in a community geothermal garden may be transferred or assigned to a subscriber organization or to any person or entity who qualifies to be a subscriber under this section.(3)
Subscriber organization - subscriber qualifications - transferability of subscriptions.(a)
The community geothermal garden may be owned by a subscriber organization whose sole purpose is beneficially owning and operating a community geothermal garden. The subscriber organization may be any for-profit or nonprofit entity permitted by Colorado law. The community geothermal garden may also be built, owned, and operated by a third party under contract with the subscriber organization.(b)
The commission shall adopt rules as necessary to implement this section, including rules to facilitate the financing of subscriber-owned community geothermal gardens. The rules must include:(I)
Minimum capitalization;(II)
The share of a community geothermal garden’s geothermal electric generation facilities that a subscriber organization may at any time own in its own name; and(III)
Authorizing subscriber organizations to enter into leases, sale-and-leaseback transactions, operating agreements, and other ownership arrangements with third parties.(c)
If a subscriber ceases to be a customer at the premises on which the subscription is based but, within a reasonable period as determined by the commission, becomes a customer at another premises in the service territory of the qualifying retail utility and within the geographic area served by the community geothermal garden, the subscription continues in effect but the bill credit and other features of the subscription are adjusted as necessary to reflect any differences between the new and previous premises’ customer classification and average annual consumption of electricity.(4)
Standards for construction and operation.(a)
The initial installation of any electrical equipment associated with the community geothermal garden is subject to final inspection and approval in accordance with section 12-115-120.(b)
Following the development or acquisition by a qualifying retail utility of a community geothermal garden in which the qualifying retail utility retains ownership, the qualifying retail utility shall either use its own employees to operate and maintain the community geothermal garden or contract for operation and maintenance of the community geothermal garden by a contractor whose employees have access to an apprenticeship program registered with the United States department of labor’s office of apprenticeship or with a state apprenticeship agency recognized by that office; except that this apprenticeship requirement does not apply to:(I)
The design, planning, or engineering of the infrastructure;(II)
Management functions to operate the infrastructure; or(III)
Any work included in a warranty.(5)
Community geothermal gardens not subject to regulation.(6)
Purchases of the output from community geothermal gardens.(a)
Intentionally left blank —Ed.(I)
Each qualifying retail utility may set forth in its plan for acquisition of renewable resources a plan to purchase the electricity and renewable energy credits generated from one or more community geothermal gardens over the period covered by the plan.(II)
For each qualifying retail utility’s compliance years commencing in 2026 and thereafter, the commission shall determine the minimum and maximum purchases of electrical output from newly installed community geothermal gardens of different output capacity that the qualifying retail utility may plan to acquire. In addition, as necessary and appropriate, the commission shall formulate and implement policies consistent with this section that simultaneously encourage:(A)
The ownership by customers of subscriptions in community geothermal gardens and of other forms of distributed generation, to the extent the commission finds there to be customer demand for such ownership;(B)
Ownership in community geothermal gardens by residential retail customers and agricultural producers, including low-income customers, to the extent the commission finds there to be demand for such ownership;(C)
The development of community geothermal gardens with attributes that the commission finds result in lower overall total costs for the qualifying retail utility’s customers;(D)
Successful financing and operation of community geothermal gardens owned by subscriber organizations; and(E)
The achievement of the goals and objectives of section 40-2-124.(B)
Once a community geothermal garden is part of a qualifying retail utility’s plan for acquisition of renewable resources, as approved by the commission, the commission shall initiate a proceeding, or consider in an active proceeding, to determine whether the qualifying retail utility must purchase all of the electricity and renewable energy credits generated by the community geothermal garden or whether a subscriber may, upon becoming a subscriber, choose to retain or sell to the qualifying retail utility the subscriber’s renewable energy credits.(C)
The amount of electricity and renewable energy credits generated by each community geothermal garden is determined by a production meter installed by the qualifying retail utility or third-party system owner and paid for by the owner of the community geothermal garden.(II)
The purchase of the output of a community geothermal garden by a qualifying retail utility takes the form of a net metering credit against the qualifying retail utility’s electric bill to each community geothermal garden subscriber at the premises set forth in the subscriber’s subscription. The net metering credit is calculated by multiplying the subscriber’s share of the electricity production from the community geothermal garden by the qualifying retail utility’s total aggregate retail rate as charged to the subscriber, minus a reasonable charge as determined by the commission to cover the utility’s costs of delivering to the subscriber’s premises the electricity generated by the community geothermal garden, integrating the geothermal generation with the utility’s system, and administering the community geothermal garden’s contracts and net metering credits. The commission shall ensure that this charge does not reflect costs that are already recovered by the utility from the subscriber through other charges. If, and to the extent that, a subscriber’s net metering credit exceeds the subscriber’s electric bill in any billing period, the net metering credit is carried forward and applied against future bills. The qualifying retail utility and the owner of the community geothermal garden must agree on whether the purchase of the renewable energy credits from subscribers will be accomplished through a credit on each subscriber’s electricity bill or by a payment to the owner of the community geothermal garden.(c)
The owner of the community geothermal garden must provide real-time production data to the qualifying retail utility to facilitate incorporation of the community geothermal garden into the utility’s operation of its electric system and to facilitate the provision of net metering credits.(d)
The owner of the community geothermal garden is responsible for providing to the qualifying retail utility, on a monthly basis and within reasonable periods set by the qualifying retail utility, the percentage shares that should be used to determine the net metering credit to each subscriber. If the electricity output of the community geothermal garden is not fully subscribed, the qualifying retail utility shall purchase the unsubscribed renewable energy and the renewable energy credits at a rate equal to the qualifying retail utility’s average hourly incremental cost of electricity supply over the immediately preceding calendar year.(e)
If a qualifying retail utility includes a plan to purchase the electricity and renewable energy credits generated by one or more community geothermal gardens, then the qualifying retail utility shall set forth in its plan for acquisition of renewable resources a proposal for including low-income customers as subscribers to a community geothermal garden, if possible. The utility may give preference to community geothermal gardens that have low-income subscribers.(f)
Qualifying retail utilities are eligible for the incentives and subject to the ownership limitations set forth in section 40-2-124 (1)(f) for utility investments in community geothermal gardens and may recover through rates a margin, in an amount determined by the commission, on all energy and renewable energy credits purchased from community geothermal gardens. Such incentive payments are excluded from the cost analysis required by section 40-2-124 (1)(g).(7)
Nothing in this section waives or supersedes the retail rate impact limitations in section 40-2-124 (1)(g). Utility expenditures for unsubscribed energy and renewable energy credits generated by community geothermal gardens must be included in the calculations of retail rate impact required by that section.(8)
Applicability to cooperative electric associations and municipally owned utilities.
Source:
Section 40-2-127.5 — Community energy funds - community geothermal gardens - rules - legislative declaration - definitions - repeal, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-40.pdf (accessed Oct. 20, 2023).
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