Ambitious state legislation - SB-21-264 - passed in 2021 to reduce greenhouse gas emissions produced by natural gas appliances and HVAC systems drove our submittal of a Clean Heat Plan (CHP) to state regulators this week.
The 2021 legislation requires gas distribution utilities like ours to reduce greenhouse gas emissions produced by home and business-based natural gas appliances, water heaters and HVAC systems by 4% by 2025 and 22% by 2030, from a 2015 baseline
The plan we submitted to state regulators this week demonstrates how we intend to collaborate with you to meet these emissions targets. To help manage your rates, our plan outlines how we will pursue emissions reductions while not exceeding a spending cost cap, as defined in the legislation. The cost cap is 2% of our natural gas revenue in 2024 and 2025, and 2.5% of our revenue from 2026 to 2030.
The state will monitor our plan’s progress through annual reports that show emissions generated by customers’ natural gas usage.
We were the only municipal utility in Colorado required to submit our Clean Heat Plan by Aug. 1, 2023, due to the number of natural gas customers we serve.
Considering this legislation, why is Springs Utilities adding more natural gas-based generation?
Like other energy providers in the state, we can make the biggest difference in reducing carbon emissions by moving away from coal as a fuel source for electric generation.
- Local natural gas generation will remain a major part of our energy mix past 2030 to ensure service reliability and resiliency, thus the recent addition of six modular natural gas-fueled generation units outside of the old Drake Power Plant.
- The continued use of natural gas-based electric generation will give renewable energy resources time to continue to grow in accessibility and affordability, and for large-scale, long-duration energy storage technology to evolve.
Will customers be forced to change out natural gas-based appliances?
As a community-owned utility, we do not support forced compliance. We understand that the cost to make a wholesale shift to electric and heat pump-based alternatives is expensive and would put an undue burden on many of our customers. It is a message that we continue to send to state regulators and legislators.
However, when shopping for a new home or when facing the necessary replacement of an existing appliance or HVAC system, it’s worth asking your builder or contractor about newer, electric-based alternatives that are often more efficient and can save you money over the long-term.
Rebates
To help offset up-front costs for new appliances, we offer a series of rebates for efficient heating, cooling and water heating equipment such as heat pumps, heat pump water heaters, and high-efficiency furnaces. We also offer rebates on items to help reduce energy consumption such as insulation and smart thermostats.
The state and federal governments are also expected to introduce instant rebates and tax incentives in 2024 for electric-based appliances, water heaters and HVAC systems. These will likely be dependent on income levels.
Is the electric grid ready for more “electrification”?
We’re actively prepping the electric grid for these and other changes through our Sustainable Energy Plan (SEP).
The SEP includes significant upgrades to several substations and transmission lines, along with the addition of energy storage by 2025, throughout our service territory to help ensure a reliable electric grid. Many of these projects are already underway or complete, such as the expansion of the Briargate Substation and upgrades to the Briargate transmission line.
Additionally, our involvement in the Southwest Power Pool since last year enables us to access and leverage lower-emission and lower-cost energy from participating energy providers around this portion of the United States.
Expanding customer rate options, such as time-of-day rates that incentivize off-peak use, can alleviate additional pressures on our grid as more people switch to electric vehicle home-based chargers and use more electric-based appliances.
Our commitment to you
While these regulatory and legislative mandates are unavoidable, we remain committed to managing your rates and maintaining system reliability and resiliency.
