C.R.S.
Section 40-5-108
Electric utility participation in organized wholesale markets required
- conditions
- authority of commission
- legislative declaration
- definitions
(1)
As used in this section, unless the context otherwise requires:(a)
“Organized wholesale market” or “OWM” means a regional transmission organization, also known as an RTO, or an independent system operator, also known as an ISO, established for the purpose of coordinating and efficiently managing the dispatch and transmission of electricity among public utilities on a multistate or regional basis and that:(I)
Is approved by the federal energy regulatory commission;(II)
Effects separate control of transmission facilities from control of generation facilities;(III)
Implements, to the extent reasonably possible, policies and procedures designed to minimize pancaked transmission rates within Colorado;(IV)
Improves, to the extent reasonably possible, service reliability within Colorado;(V)
Is of sufficient scope or otherwise operates to substantially increase economical supply options for customers;(VI)
Has a structure of governance or control that is independent of the ownership and operation of the transmission facilities, and no member of its board of directors has an affiliation with a user or with an affiliate of a user during the member’s tenure on the board so as to unduly affect the OWM’s performance. As used in this subsection (1)(a)(VI), “user” means any entity or affiliate of that entity that buys or sells electric energy in the OWM’s region or in a neighboring region.(VII)
Improves emission-reduction and customer-savings benefits to Colorado customers from operation within the western interconnection without significantly impairing actions taken by public utilities to meet the emission-reduction goals of sections 25-7-102 and 40-2-125.5 and to continue to advance the objectives of those sections;(VIII)
Has an inclusive and open stakeholder process that does not place unreasonable burdens on, or preclude meaningful participation by, any stakeholder group;(IX)
Includes all transmission and generation resources approved, acquired, or constructed and in service by 2030 to meet the emission reduction requirements of sections 25-7-102 and 40-2-125.5; and(X)
Consistent with and in support of FERC policies and orders and local planning by Colorado public utilities, is capable of: Planning for improved efficiency of use, future expansion, and consideration of all options for meeting transmission needs; providing effective cost allocations that reflect benefits of transmission investments; maintaining real-time reliability of the electric transmission system while promoting more efficient use of the transmission system in Colorado and neighboring areas in the western interconnection; ensuring comparable and nondiscriminatory transmission access and necessary services; minimizing system congestion; and further addressing real or potential transmission constraints.(b)
“Transmission utility” means a public utility that:(I)
Is a wholesale electricity supplier or transmitter; and(II)
Owns and operates electric transmission lines capable of transmitting electric energy at a voltage of one hundred kilovolts or more.(II)
Upon application by a transmission utility, the commission may waive or delay the requirement stated in subsection (2)(a)(I) of this section if:(A)
The commission has determined that the transmission utility has made all reasonable efforts to comply with the requirement but there is no viable and available OWM that the transmission utility can join by January 1, 2030; and(B)
The commission has determined that requiring the transmission utility to join an OWM is not in the public interest based on the commission’s evaluation of appropriate factors, including whether the OWM has established policies regarding tracking and reporting of emissions with a system to attribute emissions to transmission owners, promoting load flexibility and demand-side resources, promoting the integration of clean energy resources, and reducing the costs and inefficiencies of transactions between balancing areas and between market constructs, if any.(b)
The commission is directed to participate on behalf of the state of Colorado, as it deems appropriate, in proceedings before the FERC involving the management of physical connections, sharing of data, and interpretation and implementation of tariff and business practices between OWMs whose boundaries meet within Colorado.(c)
The general assembly finds, determines, and declares that the participation of transmission utilities in OWMs and the implementation of the “Colorado Electric Transmission Authority Act”, article 42 of this title 40, will assist transmission utilities and the Colorado electric transmission authority in ensuring the resilience of the electric grid and its resistance to both natural disasters and intentional attacks. Accordingly, the commission is directed to use all available means to support these entities in preparing for, and documenting their ability to mitigate, any threats identified in the Colorado energy assurance emergency plan.(3)
Intentionally left blank —Ed.(a)
The commission shall consider allowing, and may allow, a transmission utility that joins an OWM to recover OWM subscription fees and other prudently incurred costs of participation in the OWM through rates or through a new or existing transmission rider.(b)
The commission shall allow a transmission utility that commences operation with an OWM to collect and retain a specified percentage of the demonstrated net present value savings accruing to Colorado customers from participation in the OWM for a period of five years beginning on the date the transmission utility commences operation with the OWM. The commission shall allow a transmission utility to retain up to thirty-five percent of such savings in years one and two, twenty-five percent in year three, and twenty percent in years four and five.(c)
A transmission utility may apply to the commission to implement a proposed shared savings approach and to establish a proceeding to determine the net present value savings accruing to Colorado customers from the participation of the transmission utility in an OWM for the period beginning on the date the transmission utility commences operation with the OWM and ending on July 31, 2033.(d)
In any proceeding conducted by the commission under subsection (3)(c) of this section, the transmission utility shall have the burden of proof to demonstrate net present value savings, and intervenors shall have the opportunity to participate and offer evidence regarding the transmission utility’s demonstration of net present value savings. The commission shall issue a final order determining the amount of net present value savings that a transmission utility may collect and retain pursuant to subsection (3)(b) of this section.(4)
Nothing in this section shall be used or interpreted by the commission to delay or impede electric resource planning proceedings filed on or before December 31, 2025, including the approval, acquisition, or construction of generation and transmission resources prior to a transmission utility’s entry into an OWM and any acquisitions that are part of or ancillary to an electric resource plan that includes a clean energy plan approved pursuant to section 25-7-102 or 40-2-125.5.
Source:
Section 40-5-108 — Electric utility participation in organized wholesale markets required - conditions - authority of commission - legislative declaration - definitions, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-40.pdf (accessed Oct. 20, 2023).
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