Colorado legislators took the first step in reauthorizing and updating the increasingly powerful Public Utilities Commission on Thursday, but they’ll have to decide in the next 19 days how to deal with the slew of changes being requested to the proposal.
House Bill 1326, sponsored by House Majority Leader Monica Duran of Wheat Ridge and fellow Democratic Rep. Jenny Willford of Northglenn, is one of a dozen or so sunset bills each year that seek continuance of a state agency or program. But it takes on more weight because it deals with what may be Colorado’s most powerful regulatory body — a three-member commission overseeing utilities, motor carriers, transportation-network companies, railroads, telecommunications and certain natural-gas and propane pipelines.
As filed, the bill makes several substantial changes. It would require transportation-network companies like Uber and Lyft to take additional steps to ensure passenger safety. It would eliminate minimum fines for gas-line safety violations. And it would allow the PUC to require that utilities use securitization rather than strictly base-rate increases to fund some upgrades.
However, because of the broad nature of both the PUC and the bill, especially as an amendment added to HB 1326 on Thursday would not require another sunset review of the commission until 2033, many interest groups have suggested bigger-picture changes. Those suggestions, as well as pushback against the securitization requirement, dominated a three-hour hearing in the House Energy and Environment Committee Thursday after which members advanced the bill to the House Finance Committee on a Democrat-led 9-4 party-line vote.
Should PUC have more members?
Maybe the most frequent request — coming from regulated utilities like Xcel Energy, community groups like Action Colorado and business groups like the Colorado Chamber of Commerce — was to boost membership of the committee from three to five appointees. Bia Campbell, senior director of public affairs and engagement for Colorado Concern, also requested that PUC rules be updated to require that commissioners represent both major parties and that they have professional experience from different sectors.
Groups requesting the change, which wasn’t recommended in the Colorado Department of Regulatory Affairs’ sunset review, say that the addition of more voices of ideological diversity would lead to better discussions that take into account more viewpoints. Several recent PUC decisions sparked widespread criticism, including approval last fall of a Clean Heat Plan that seeks to phase out natural-gas connections to homes over 15 years — a move that would lower emissions but could increase electricity bills substantially.
“If I were to say, ‘No Kings,’ I’m sure I would see several hands shoot up,” Logan County resident Corey Gaines said of the national protest movement against perceived power grabs by President Donald Trump. “But what we have with a three-member, government-appointed, ideologically similar PUC is essentially a king.”
Issue of securitization a pinch point
Environmental groups, however, pushed back on the idea, saying that adding two more commissioners would slow deliberations and would require commitment of more resources to the full-time appointees’ staffs at a time when the state is making budget cuts. While officials like Xcel Energy Colorado President Robert Kenney said he has seen no proof after working in other states that five-member commissions slow work, Western Resource Advocates Senior Policy Advisor Clare Valentine said most of the states with five-member commissions have longer deadlines for proposal consideration than Colorado.
The same groups asked committee members to cut from the bill provisions that would give the PUC power to direct specific actions in how utilities finance improvements and offer customer-facing programs in areas like electric-vehicle charging-equipment installation. Specifically, HB 1326 would let the PUC require securitization for some capital needs and require that utilities bring on third-party contractors to run some consumer programs.
Securitization means that rather than recouping the cost of some programs, such as wildfire mitigation or grid-infrastructure upgrades, through base-rate increases, utilities would issue revenue bonds to fund those investments. This can result in lower financing costs for the upgrades — a move that can limit base-rate increases but also limit the revenue that utilities can gain from such base-rate increases — but also can require longer periods of repayment of interest.
Should PUC be able to require some third-party contracting?
Utility leaders like Kenney and Black Hills Energy regulatory director Michael Harrington said that while securitization is the right choice for some capital outlays, it is not appropriate for others — and they said utilities should be able to make that decision. Action Colorado President Sara Blackhurst, whose organization represents rural and southern Colorado, said the longer paybacks that securitization could require would be one more factor forcing cost-weary Coloradans to pay higher utility bills.
“Asking a private company to change its financial model is really something that’s counterintuitive and outside the scope of this commission,” said Rich Werner, president/CEO of Upstate Colorado Economic Development.
Similarly on the issue of third-party contractors, utility officials said they already use such entities at times but feel they should be able to choose when that happens. And Phil Hayes, a lobbyist for labor interests, warned that forcing the use of more third-party contractors could make it difficult for construction companies to figure out who to turn to with questions about things like rebates and discounts the programs offer.
But Valentine argued that investor-owned utilities like Xcel and Black Hills have incentives to avoid securitization because it can decrease their profits. Therefore, PUC members should be able to step in and order it when they see it in the best interests of consumers, she said.
“While securitization is not a magical tool, it can be useful in some cases,” Valentine said.
Sponsors say they’ll consider more changes
And Anita Seitz, advocacy director for Colorado Communities for Climate Action, argued similarly that utilities are tasked to do so much already by the PUC that consumer-facing programs like rebates can get lost on their to-do list. Requiring companies to contract out that work at times could ensure that it gets the priority the PUC feels it deserves, she said.
Despite all the conversation on those topics, no one motioned to remove the securitization and third-party requirements from HB 1326 or to enlarge the PUC to five members. The biggest amendments added Thursday cut the time for the next PUC sunset review from 11 years to seven years and removed a controversial provision to allow the commission to deliberate on some issues behind closed doors rather than at a public meeting.
Willford said, however, that she and Duran will continue to have conversations on those subjects and on others and likely will be bringing more amendments as the bill advances. And there could be a lot to consider, based on requests aired Monday.
Conservation Colorado Legislative Director Sidra Aghababian said she’d like to see addition of provisions to accelerate the minimization of impacts on disproportionately impacted communities and to enhance engagement of those communities in PUC hearings.
Slew of amendment requests for PUC sunset bill
James Crooks, an air-quality researcher, said legislators should require the PUC to perform health-impact assessments when comparing planning scenarios for utility projects to determine the feasibility of requiring lowest-impact options. Rep. Lesley Smith, D-Boulder, said she would like to look more at that idea as the bill advances.
Nate Bernstein, executive director of union-backed Climate Jobs Colorado, said he would like to see an amendment that directs the PUC to consider job quality and workforce impacts in its decisions. Labor leaders have criticized the Clean Heat Plan as a job killer.
And several local-government groups asked for the elimination of a proposed new provision in the bill that would let independent power producers and transmission-line constructors petition the PUC to overrule local decisions that could inhibit transmission buildout. Only PUC-regulated utilities now can appeal local decisions on the basis of statewide need, and groups like the Colorado Municipal League and Colorado Counties Inc. warned this expansion undermines local authority.
With just 19 days remaining in the 2026 legislative session, bill sponsors have a lot of work left to do to get the bill onto Gov. Jared Polis’ desk — and a lot of questions from both business and environmental groups to answer. But Thursday’s vote clears the first hurdle for HB 1326 and seems to ensure it will be one of the hottest topics of debate over the final three weeks of the session.