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March 27, 2023 HB 23-1252
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0601
Rep. Lieder; Kipp
Date:
Bill Status:
Fiscal Analyst:
March 27, 2023
House Energy & Environment
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Bill Topic: THERMAL ENERGY
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill makes various changes regarding the use of geothermal energy. It increases
state expenditures beginning in FY 2023-24.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 23-1252
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund - $39,653
Cash Funds - $344,930
Centrally Appropriated - $38,730
Total Expenditures - $423,313
Total FTE - 3.0 FTE
Transfers - -
Other Budget Impacts General Fund Reserve - $5,948
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March 27, 2023 HB 23-1252
Summary of Legislation
The bill addresses geothermal energy usage by expanding an existing grant program, creating
requirements for thermal energy networks, and repealing the Geothermal Heat Suppliers Act.
Grant program eligibility. The existing Geothermal Energy Grant Program, created by
House Bill 22-1381 and administered by the Colorado Energy Office, may award grants for heating
and cooling systems in certain new construction projects, multi-building thermal projects, or
geothermal electricity generation projects. The bill expands the grant program to include heating and
cooling systems that retrofit an existing building and studies that include the utilization of direct air
capture technology.
Thermal energy networks. The bill defines thermal energy networks as systems that supply multiple
buildings with heating and cooling or water heating systems and that reduce greenhouse gas
emissions. The bill requires Clean Heat Plans to demonstrate that these networks comply with
existing permitting requirements for the production of geothermal fluid.
In addition, a gas utility that seeks to offer a thermal energy network must apply separately to the
Public Utilities Commission (PUC) from its Clean Heat Plan. By September 1, 2024, any gas utility
serving at least 500,000 customers must submit at least one pilot program to provide thermal energy
service serving a disproportionally impacted community, a mountain community, or a utility service
area that is capacity-constrained. The bill requires that any such project undertaken by a utility’s pilot
program, a state agency, or a state institution of higher education complies with existing
apprenticeship and prevailing wage requirements.
By January 1, 2025, the PUC must initiate a proceeding to determine whether any changes to rules or
state law are required to facilitate the development of thermal energy, taking into consideration
appropriate utility ownership models, rate structures, and the impact on the utility workforce.
Geothermal Heat Suppliers Act. The bill repeals the requirement that geothermal heat suppliers
obtain operating permits from the PUC.
State Expenditures
The bill increases state expenditures, mainly in DORA, by $423,313 in FY 2024-25 only, paid from the
Fixed Utility Fund and the General Fund. The bill may minimally impact state expenditures in other
state agencies beginning in FY 2023-24. Expenditures are shown in Table 2 and detailed below.
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March 27, 2023 HB 23-1252
Table 2
Expenditures Under HB 23-1252
FY 2023-24 FY 2024-25
Department of Regulatory Agencies
Personal Services - $178,210
Operating Expenses - $2,700
Capital Outlay Costs - $13,340
Legal Services - $150,680
Centrally Appropriated Costs
1
- $38,730
FTE – Personal Services - 2.0 FTE
FTE – Legal Services - 0.8 FTE
DORA Subtotal - $383,660
Colorado Energy Office
Legal Services - $39,653
FTE – Legal Services - 0.2 FTE
CEO Subtotal - $39,653
Total - $423,313
Total FTE - 3.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Regulatory Agencies. The PUC requires additional staff in FY 2024-25 only to review
one application for a thermal energy pilot program. These expenditures are paid from the Fixed
Utility Fund.
Staff. Based on the bill’s deadlines, the application is expected to occur outside the regular cycle
for Clean Heat Plans, requiring 2.0 FTE to review the application, resolve any disputes, and advise
the commission. Standard operating and capital outlay costs are included.
Legal services. DORA will require 1,425 hours of legal services for rulemaking and representation
during application review, which is expected to require a hearing. Legal services are provided by
the Department of Law at a rate of $105.74 per hour.
Colorado Energy Office. The bill increases workload by expanding the grant program and to
participate in the pilot program application proceedings. These expenditures are paid from the
General Fund.
Grant program. Expanding eligibility for the Geothermal Energy Grant Program may result in
the receipt of additional applications, increasing workload. This workload can be accomplished
within existing appropriations.
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March 27, 2023 HB 23-1252
Legal services. The office has the authority to intervene in PUC proceedings that affect energy
issues. It is expected to participate in the pilot program application process in FY 2024-25. This is
expected to require 375 hours of legal services representation from the Department of Law.
Department of Public Health and Environment. To the extent that utilities include thermal energy
networks in future Clean Heat Plans, which are reviewed by the department, workload may increase.
This can be accomplished during the normal course of business.
Department of Labor and Employment. Workload may increase beginning in FY 2023-24 to respond
to inquiries about the new labor requirements for thermal energy projects and to update public
guidance. This can be accomplished within existing appropriations.
Capital construction. Expenditures will increase for thermal energy network projects undertaken by
state agencies or state institutions of higher education if those projects were not otherwise required to
comply with apprenticeship and prevailing wage requirements. Any increase in project costs will be
incorporated into the entity’s future budget requests.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2.
Other Budget Impacts
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve. Based on this fiscal note, the
bill is expected to increase the amount of General Fund held in reserve by the amounts shown in
Table 1, decreasing the amount of General Fund available for other purposes.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State and Local Government Contacts
Colorado Energy Office Information Technology Labor
Law Personnel Public Health and Environment
Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.