Second Regular Session Seventy-fourth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 24-0411.04 Clare Haffner x6137 HOUSE BILL 24-1370 House Committees Senate Committees Energy & Environment A BILL FOR AN ACT C ONCERNING MEASURES TO REDUCE THE COST OF USE OF NATURAL101 GAS INFRASTRUCTURE .102 Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov .) The bill requires the Colorado energy office to issue a request for information by December 1, 2024, to solicit interest from local governments that are served by a dual-fuel utility (utility) in becoming a gas planning priority community (community). A gas planning priority community is defined in the bill as a local government in which constituents have gas service provided by a dual-fuel utility that formally HOUSE SPONSORSHIP Kipp and Willford, SENATE SPONSORSHIP (None), Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment. Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law. indicates an interest in working with the utility to mutually explore opportunities for neighborhood-scale alternatives projects. A neighborhood-scale alternatives project geographically targets decommissioning of a portion of the gas distribution system or avoids expanding the gas distribution system in order to serve new construction projects and provides substitute energy service to buildings within the project area that is cost-effective and reduces future greenhouse gas emissions required to serve buildings. By April 30, 2025, the Colorado energy office and the utility must jointly file with the public utilities commission (commission) the results of the request for information, identifying any proposed communities. The Colorado energy office and the utility must also file a draft agreement between the utility and a proposed community to identify and pursue a neighborhood-scale alternatives project. The commission must approve or modify the list of proposed communities by June 30, 2025. By October 1, 2025, a utility and each approved community must enter into an agreement, and the utility must submit to the commission a list of the communities with which the utility has entered into an agreement. For each approved community, the utility is required to disclose certain information to the Colorado energy office, the commission, and the community, including a map with information regarding the utility's gas distribution and electric systems and operations within the community. The bill requires the utility to work with an approved community to rank neighborhood-scale alternatives projects and, before June 1, 2026, to submit at least one neighborhood-scale alternatives project in each community to the commission for approval or an explanation of why no neighborhood-scale alternatives project will be pursued in a community. By June 1 of each year following approval of a neighborhood-scale alternatives project, a utility is required to submit a report to the commission on the implementation of any approved neighborhood-scale alternatives projects. The commission must allow the utility to recover costs incurred from the implementation of a neighborhood-scale alternatives project. Be it enacted by the General Assembly of the State of Colorado:1 SECTION 1. In Colorado Revised Statutes, add article 3.3 to title2 40 as follows:3 ARTICLE 3.34 Gas Infrastructure Planning5 HB24-1370-2- 40-3.3-101. Definitions. A S USED IN THIS ARTICLE 3.3, UNLESS1 THE CONTEXT OTHERWISE REQUIRES :2 (1) "A LTERNATIVE ENERGY SERVICE " MEANS A RESIDENTIAL OR3 COMMERCIAL ENERGY SERVICE THAT DOES NOT USE GAS BUT IS ABLE TO4 MEET A CUSTOMER'S END USE NEED AND DOES NOT COMBUST GAS ON SITE5 IN DOING SO.6 (2) "C OLORADO ENERGY OFFICE" MEANS THE COLORADO ENERGY7 OFFICE CREATED IN SECTION 24-38.5-101.8 (3) "D ISTRIBUTION SYSTEM" HAS THE MEANING SET FORTH IN9 SECTION 40-2-115 (2)(b) AND INCLUDES THE PIPING AND ASSOCIATED10 FACILITIES USED TO DELIVER GEOLOGICAL GAS OR RECOVERED METHANE .11 (4) "D UAL-FUEL UTILITY" MEANS AN INVESTOR-OWNED UTILITY IN12 WHICH ONE COMPANY OR A SUBSIDIARY OF THE SAME COMPANY OPERATES13 BOTH AN ELECTRIC AND A GAS UTILITY THAT HAVE SERVICE TERRITORIES14 IN THE STATE WITH GREATER THAN FIFTY PERCENT OF THE CUSTOMERS IN15 THOSE TERRITORIES RECEIVING BOTH GAS AND ELECTRIC SERVICE FROM A16 UTILITY OPERATED BY THE COMPANY OR A SUBSIDIARY OF THE SAME17 COMPANY.18 (5) "G AS" MEANS NATURAL OR GEOLOGICAL GAS , RECOVERED19 METHANE, OR ANY MIXTURE OF NATURAL OR GEOLOGICAL GAS OR20 RECOVERED METHANE THAT IS TRANSPORTED BY A COMMON CARRIER OR21 DEDICATED PIPELINE, INCLUDING FLAMMABLE GAS; MANUFACTURED GAS;22 PETROLEUM OR OTHER HYDROCARBON GASSES , SUCH AS PROPANE; OR ANY23 MIXTURE OF GASES THAT IS INJECTED INTO A PIPELINE AND TRANSMITTED ,24 DISTRIBUTED, OR FURNISHED BY A UTILITY.25 (6) "G AS INFRASTRUCTURE PLAN" MEANS A REQUIREMENT FOR GAS26 UTILITIES ESTABLISHED BY THE COMMISSION THAT IS DESIGNED TO27 HB24-1370 -3- ESTABLISH A PROCESS TO DETERMINE THE NEED FOR , AND POTENTIAL1 ALTERNATIVES TO, CAPITAL INVESTMENT , CONSISTENT WITH THE2 OBJECTIVES OF MAINTAINING JUST AND REASONABLE RATES ; ENSURING3 SYSTEM SAFETY, RELIABILITY, AND RESILIENCY; AND PROTECTING4 INCOME-QUALIFIED UTILITY CUSTOMERS AND DISPROPORTIONATELY5 IMPACTED COMMUNITIES.6 (7) "G AS PLANNING PRIORITY COMMUNITY " MEANS A LOCAL7 GOVERNMENT IN WHICH CONSTITUENTS HAVE GAS SERVICE PROVIDED BY8 A DUAL-FUEL UTILITY THAT FORMALLY INDICATES AN INTEREST IN9 WORKING WITH A DUAL -FUEL UTILITY TO MUTUALLY EXPLORE10 OPPORTUNITIES FOR NEIGHBORHOOD -SCALE ALTERNATIVES PROJECTS ,11 INCLUDING THROUGH THE EXC HANGE OF UTILITY GAS INFRASTRUCTURE12 DATA AND COMMUNITY DEVELOPMENT PLANS .13 (8) "G REENHOUSE GAS REDUCTION GOALS " MEANS THE STATE'S14 GREENHOUSE GAS REDUCTION GOALS DESCRIBED IN SECTION 25-7-10215 (2)(g).16 (9) "I NCOME-QUALIFIED UTILITY CUSTOMER" HAS THE MEANING17 SET FORTH IN SECTION 40-3-106 (1)(d)(II).18 (10) "L OCAL GOVERNMENT" MEANS A HOME RULE OR STATUTORY19 COUNTY, CITY, OR CITY AND COUNTY.20 (11) "N EIGHBORHOOD-SCALE ALTERNATIVES PROJECT" MEANS A21 PROJECT THAT GEOGRAPHICALLY TARGETS DECOMMISSIONING OF A22 PORTION OF THE GAS DISTRIBUTION SYSTEM OR AVOIDS EXPANDING THE23 GAS DISTRIBUTION SYSTEM IN ORDER TO SERVE NEW CONSTRUCTION24 PROJECTS AND PROVIDES ALTERNATIVE ENERGY SERVICE TO BUILDINGS25 WITHIN THE PROJECT AREA THAT IS COST-EFFECTIVE AND REDUCES FUTURE26 GREENHOUSE GAS EMISSIONS REQUIRED TO SERVE BUILDINGS .27 HB24-1370 -4- (12) "NONEMITTING THERMAL RESOURCE " MEANS EFFICIENT1 THERMAL ENERGY FOR HEATING , COOLING, OR HOT WATER, WHICH2 ENERGY DOES NOT REQUIRE COMBUSTION OF GAS , SUCH AS AN AIR-SOURCE3 HEAT PUMP, A GROUND-SOURCE HEAT PUMP, A HEAT PUMP WATER HEATER,4 A THERMAL ENERGY SYSTEM , OR A THERMAL ENERGY NETWORK .5 (13) "P IPELINE SEGMENT" MEANS A DISCRETE PORTION OF THE6 DISTRIBUTION SYSTEM AND ALL ANCILLARY STRUCTURES , VALVES, AND7 OTHER SYSTEMS NEEDED TO DISTRIBUTE GAS . A PIPELINE SEGMENT MUST8 BE THE SMALLEST INCREMENTAL UNIT POSSIBLE , AS DEFINED BY PIPELINE9 MATERIALS, GEOGRAPHICAL FEATURES , AND THE DESIGN OF THE10 DISTRIBUTION SYSTEM.11 (14) "T HERMAL ENERGY NETWORK " HAS THE MEANING SET FORTH12 IN SECTION 40-3.2-108 (2)(s).13 (15) "T HERMAL ENERGY SYSTEM " HAS THE MEANING SET FORTH14 IN SECTION 40-3.2-108 (2)(t).15 40-3.3-102. Request for information - gas planning priority16 community - disclosures. (1) (a) B Y DECEMBER 1, 2024, THE COLORADO17 ENERGY OFFICE SHALL ISSUE A REQUEST FOR INFORMATION TO IDENTIFY18 LOCAL GOVERNMENTS WHOSE RESIDENTS ARE SERVED BY A DUAL -FUEL19 UTILITY THAT ARE INTERESTED IN BECOMING A GAS PLANNING PRIORITY20 COMMUNITY.21 (b) T HE COLORADO ENERGY OFFICE SHALL INCLUDE IN THE22 REQUEST FOR INFORMATION THE MINIMUM CRITERIA THAT A LOCAL23 GOVERNMENT MUST MEET IN ORDER TO BECOME A GAS PLANNING24 PRIORITY COMMUNITY, INCLUDING:25 (I) A DEMONSTRATION THAT DESIGNATION AS A GAS PLANNING26 PRIORITY COMMUNITY WOULD ALIGN WITH THE LOCAL GOVERNMENT 'S27 HB24-1370 -5- CLIMATE AND ENERGY AFFORDABILITY GOALS ; AND1 (II) A COMMITMENT OF INTERNAL OR EXTERNAL STAFF RESOURCES2 TO IDENTIFY AND IMPLEMENT NEIGHBORHOOD -SCALE ALTERNATIVES3 PROJECTS.4 (c) A T LEAST THIRTY DAYS PRIOR TO ISSUING THE REQUEST FOR5 INFORMATION, THE COLORADO ENERGY OFFICE SHALL PUBLISH A DRAFT6 OF THE REQUEST FOR INFORMATION ON ITS WEBSITE AND PROVIDE AN7 OPPORTUNITY FOR THE PUBLIC TO SUBMIT WRITTEN COMMENTS .8 (2) (a) B Y APRIL 30, 2025, THE COLORADO ENERGY OFFICE AND A9 DUAL-FUEL UTILITY SHALL JOINTLY FILE WITH THE COMMISSION THE10 RESULTS OF THE REQUEST FOR INFORMATION REQUIRED BY SUBSECTION11 (1)(a) OF THIS SECTION, IDENTIFYING ANY PROPOSED GAS PLANNING12 PRIORITY COMMUNITIES, AND A DRAFT AGREEMENT BETWEEN THE13 DUAL-FUEL UTILITY AND ANY PROPOSED GAS PLANNING PRIORITY14 COMMUNITY, WHICH DRAFT AGREEMENT MUST :15 (I) I DENTIFY THE ROLES AND RESPONSIBILITIES OF THE DUAL-FUEL16 UTILITY AND THE PROPOSED GAS PL ANNING PRIORITY COMMUNITY IN17 IDENTIFYING NEIGHBORHOOD -SCALE ALTERNATIVES PROJECTS;18 (II) I DENTIFY TIME FRAMES FOR EACH PARTY TO FURNISH DATA OR19 RESPOND TO REQUESTS FOR DATA FROM THE OTHER PARTY ;20 (III) I NCLUDE ANY NECESSARY WAIVERS OF COMMISSION RULES TO21 FACILITATE DATA TRANSFER BETWEEN THE PARTIES ; AND22 (IV) I NCLUDE A PROCESS TO ADDRESS CONFLICTS BETWEEN THE23 TWO PARTIES.24 (b) T HE COMMISSION SHALL PROVIDE AN OPPORTUNITY FOR THE25 PUBLIC TO SUBMIT WRITTEN COMMENTS ON THE FILING .26 (c) B Y JUNE 30, 2025, THE COMMISSION SHALL APPROVE OR27 HB24-1370 -6- MODIFY THE LIST OF PROPOSED GAS PLANNING PRIORITY COMMUNITIES .1 (3) B Y OCTOBER 1, 2025, A DUAL-FUEL UTILITY SHALL ENTER INTO2 AN AGREEMENT WITH EACH LOCAL GOVERNMENT THAT HAS BEEN3 APPROVED AS A GAS PLANNING PRIORITY COMMUNITY AND SHALL SUBMIT4 TO THE COMMISSION A LIST OF THE GAS PLANNING PRIORITY COMMUNITIES5 WITH WHICH THE DUAL-FUEL UTILITY HAS ESTABLISHED AN AGREEMENT .6 (4) (a) U NLESS OTHERWISE DIRECTED BY THE COMMISSION OR7 REQUESTED BY THE GAS PLANNING PRIORITY COMMUNITY , A DUAL-FUEL8 UTILITY SHALL PROVIDE EACH GAS PLANNING PRIORITY COMMUNITY , THE9 COMMISSION, AND THE COLORADO ENERGY OFFICE WITH A MAP THAT10 INCLUDES THE FOLLOWING INFORMATION ABOUT THE DUAL -FUEL UTILITY'S11 DISTRIBUTION AND ELECTRIC SYSTEMS AND OPERATIONS WITHIN THE GAS12 PLANNING PRIORITY COMMUNITY :13 (I) T HE LOCATION OF, AGE OF, AND MATERIAL TYPES OF THE14 DISTRIBUTION SYSTEM AT THE PIPELINE SEGMENT LEVEL ;15 (II) T HE LOCATIONS OF CUSTOMER-OWNED SERVICE LINES;16 (III) T HE LOCATIONS OF DISTRIBUTION SYSTEM PIPELINES THAT17 ARE IDENTIFIED BY THE DUAL-FUEL UTILITY FOR UPRATING OR EXPANSION18 OR THAT ARE TARGETED FOR REPL ACEMENT PURSUANT TO THE MOST19 RECENTLY APPROVED GAS INFRASTRUCTURE PLAN ;20 (IV) T HE CLASSIFICATION OF EACH PIPELINE SEGMENT LOCATION21 PURSUANT TO 49 CFR 192.5;22 (V) T HE NUMBER OF CUSTOMERS, DESIGN DAY PEAK DEMAND, AND23 ANNUAL THROUGHPUT , DISAGGREGATED BY CUSTOMER CLASS SERVED BY24 EACH PIPELINE SEGMENT; AND25 (VI) T HE LOCATIONS OF DISPROPORTIONATELY IMPACTED26 COMMUNITIES AND THE IDENTIFICATION OF DISPROPORTIONATELY27 HB24-1370 -7- IMPACTED COMMUNITIES SERVED BY EACH PIPELINE SEGMENT .1 (b) A DUAL-FUEL UTILITY SHALL PROVIDE GAS PLANNING PRIORITY2 COMMUNITY STAFF AND CONSULTANTS WHO HAVE SIGNED APPROPRIATE3 NONDISCLOSURE AGREEMENTS WITH ALL REQUESTED GAS AND ELECTRIC4 CUSTOMER USAGE AND PEAK DEMAND DATA DISAGGREGATED TO THE5 INDIVIDUAL CUSTOMER. THE DUAL-FUEL UTILITY SHALL PROVIDE SUCH6 INFORMATION WITHIN THE TIME FRAME ESTABLISHED PURSUANT TO7 SUBSECTION (2)(a)(II) OF THIS SECTION.8 (c) T HE INFORMATION DESCRIBED IN SUBSECTIONS (4)(a) AND9 (4)(b) OF THIS SECTION IS EXEMPT FROM THE "COLORADO OPEN RECORDS10 A CT", PART 2 OF ARTICLE 72 OF TITLE 24.11 40-3.3-103. Neighborhood-scale alternatives projects - cost12 recovery - reporting requirement. (1) A DUAL-FUEL UTILITY SHALL13 WORK WITH A GAS PLANNING PRIORITY COMMUNITY TO RANK14 NEIGHBORHOOD-SCALE ALTERNATIVES PROJECTS WITHIN EACH GAS15 PLANNING PRIORITY COMMUNITY BASED ON LOCAL GOVERNMENT INPUT16 AND CONSIDERATION OF:17 (a) T HE NUMBER AND CUSTOMER CLASS SERVED BY EACH PIPELINE18 SEGMENT INCLUDED IN A NEIGHBORHOOD -SCALE ALTERNATIVES PROJECT;19 (b) T HE COST-EFFECTIVENESS OF THE NEIGHBORHOOD -SCALE20 ALTERNATIVES PROJECT USING THE COST -BENEFIT HANDBOOK FROM THE21 DUAL-FUEL UTILITY'S MOST RECENT GAS INFRASTRUCTURE PLAN ;22 (c) T HE AVAILABILITY OF ALTERNATIVE ENERGY SERVICE ,23 INCLUDING FOR SCENARIOS WITH ENHANCED GAS AND ELECTRIC DEMAND24 RESPONSE OR DEMAND FLEXIBILITY ;25 (d) T HE ABILITY OF THERMAL ENERGY NETWORKS TO SERVE THE26 AREA COVERED BY THE NEIGHBORHOOD -SCALE ALTERNATIVES PROJECT;27 HB24-1370 -8- (e) WHETHER THE NEIGHBORHOOD -SCALE ALTERNATIVES PROJECT1 IS PART OF A NEW DEVELOPMENT OR WOULD SERVE EXISTING CUSTOMERS ,2 OR BOTH;3 (f) T HE PRIORITIZATION OF PIPELINE SEGMENTS THAT ARE PART OF4 PROJECTS INCLUDED IN A DUAL -FUEL UTILITY'S GAS INFRASTRUCTURE5 PLAN; AND6 (g) T HE LOCATION OF ANY NEARBY DISPROPORTIONATELY7 IMPACTED COMMUNITY OR PIPELINE SEGMENTS THAT SERVE8 DISPROPORTIONATELY IMPACTED COMMUNITIES .9 (2) (a) P RIOR TO JUNE 1, 2026, A DUAL-FUEL UTILITY SHALL:10 (I) S UBMIT, AS A STAND-ALONE APPLICATION, ONE OR MORE11 NEIGHBORHOOD-SCALE ALTERNATIVES PROJECTS IN EACH GAS PLANNING12 PRIORITY COMMUNITY TO THE COMMISSION FOR APPROVAL ; OR13 (II) I F THE DUAL-FUEL UTILITY WILL NOT PURSUE A14 NEIGHBORHOOD-SCALE ALTERNATIVES PROJECT IN ONE OR MORE GAS15 PLANNING PRIORITY COMMUNITIES , PROVIDE THE COMMISSION WITH AN16 EXPLANATION AS TO WHY A NEIGHBORHOOD -SCALE ALTERNATIVES17 PROJECT WILL NOT BE PURSUED IN THAT COMMUNITY .18 (b) T HE COMMISSION SHALL PROVIDE AN OPPORTUNITY FOR PUBLIC19 COMMENT REGARDING THE DUAL -FUEL UTILITY'S SUBMISSION PURSUANT20 TO SUBSECTION (2)(a)(II) OF THIS SECTION.21 (c) T HE COMMISSION SHALL APPROVE A NEIGHBORHOOD -SCALE22 ALTERNATIVES PROJECT APPLICATION SUBMITTED BY A DUAL -FUEL23 UTILITY IF:24 (I) T HE PROJECT IS SUPPORTED BY A LOCAL GOVERNMENT25 ORDINANCE, PROCLAMATION, OR RESOLUTION;26 (II) T HE COMMISSION FINDS THAT THE PROJECT IS:27 HB24-1370 -9- (A) CONSISTENT WITH THE STATE'S GREENHOUSE GAS REDUCTION1 GOALS; AND2 (B) I N THE PUBLIC INTEREST; AND3 (III) T HE COMMISSION FINDS THAT ALTERNATIVE ENERGY SERVICE4 IS AVAILABLE TO ALL CUSTOMERS WITHIN THE PROJECT AREA . IN MAKING5 THIS FINDING, THE COMMISSION SHALL CONSIDER:6 (A) T HE COST OF END USES POWERED BY DIFFERENT FUELS ,7 IMPACTS ON INCOME-QUALIFIED UTILITY CUSTOMERS AND CUSTOMERS8 LIVING IN DISPROPORTIONATELY IMPACTED COMMUNITIES , AND THE9 STATE'S GREENHOUSE GAS EMISSION REDUCTION GOALS ; AND10 (B) E XISTING UTILITY OR OTHER INCENTIVES TO SUPPORT11 CUSTOMER ADOPTION OF THE ALTERNATIVE ENERGY SERVICE .12 (3) (a) T HE COMMISSION SHALL ALLOW A DUAL -FUEL UTILITY TO13 RECOVER THE COSTS INCURRED DURING THE DEVELOPMENT OF A14 NEIGHBORHOOD-SCALE ALTERNATIVES PROJECT , INCLUDING COSTS TO15 TRANSITION THE DISTRIBUTION SYSTEM , INVEST IN ELECTRIC16 INFRASTRUCTURE, AND PROVIDE CUSTOMER INCENTIVES. SUCH COSTS ARE17 FULLY RECOVERABLE REGARDLESS OF THE PERFORMANCE OF THE18 ALTERNATIVE ENERGY SERVICE .19 (b) T HE DUAL-FUEL UTILITY SHALL PROPOSE TO THE COMMISSION20 HOW COSTS WILL BE RECOVERED ACROSS THE DUAL -FUEL UTILITY'S21 ELECTRIC AND GAS BUSINESS.22 (c) F OR COMMUNITIES THAT ARE SERVED BY A DUAL -FUEL UTILITY23 BUT ARE NOT SERVED BY THE ELECTRIC UTILITY THAT IS PART OF THE24 DUAL-FUEL UTILITY, THE COMMISSION SHALL CONSIDER A COST-SHARING25 AGREEMENT, TO BE PROPOSED BY THE DUAL-FUEL UTILITY AND A LOCAL26 COOPERATIVE ELECTRIC ASSOCIATION OR MUNICIPALLY OWNED ELECTRIC27 HB24-1370 -10- UTILITY, THAT MAKES THE INCUMBENT GAS UTILITY THAT IS PART OF THE1 DUAL-FUEL UTILITY AND ITS CUSTOMERS WHOLE FOR ANY PROJECTS2 APPROVED BY THE COMMISSION WHEN THERE IS A COST SHIFT .3 (4) IN APPROVING A NEIGHBORHOOD SCALE ALTERNATIVES4 PROJECT, THE COMMISSION MAY MODIFY THE GAS UTILITY 'S SERVICE5 REQUIREMENT FOR SELECT PREMISES WITH AN ALTERNATIVE ENERGY6 SERVICE REQUIREMENT. THE COMMISSION MAY GRANT AN ALTERNATIVE7 ENERGY SERVICE REQUIREMENT FOR ANY CERTIFICATE OF PUBLIC8 CONVENIENCE AND NECESSITY TO PROVIDE SERVICE TO THE TARGETED9 AREA THAT IS THE SUBJECT OF THE NEIGHBORHOOD -SCALE ALTERNATIVES10 PROJECT IF THE COMMISSION FINDS THAT ALTERNATIVE ENERGY SERVICE11 IS AVAILABLE.12 (5) (a) A S PART OF A NEIGHBORHOOD -SCALE ALTERNATIVES13 PROJECT, A UTILITY MAY PROPOSE TO FUND CONVERSION OF EXISTING GAS14 APPLIANCES OR EQUIPMENT TO NONEMITTING THERMAL RESOURCES ,15 INCLUDING OFFERING INCREMENTAL INCENTIVES , FINANCING ABOVE THAT16 APPROVED FOR CLEAN HEAT PLANS , AS DEFINED IN SECTION 40-3.2-108,17 BENEFICIAL ELECTRIFICATION PLANS, AS DEFINED IN SECTION 40-3.2-109,18 DEMAND-SIDE MANAGEMENT PROGRAMS , AS DEFINED IN SECTION19 40-1-102, OR OTHER RELATED FILINGS.20 (b) A DUAL-FUEL UTILITY MAY ALSO PROPOSE TO OFFER NEW RATE21 STRUCTURES TO PAY FOR THERMAL ENERGY NETWORKS OR OTHER22 NONEMITTING THERMAL RESOURCES AS AN ALTERNATIVE ENERGY23 SERVICE, WHERE CUSTOMERS PAY THE UTILITY FOR THERMAL ENERGY24 NETWORK SERVICES TO OFFSET THE INITIAL COST OF NEW APPLIANCES OR25 OTHER EQUIPMENT. A DUAL-FUEL UTILITY SHALL HAVE THE RIGHT OF26 FIRST REFUSAL TO OFFER THERMAL ENERGY NETWORK SERVICE AS PART27 HB24-1370 -11- OF A NEIGHBORHOOD-SCALE ALTERNATIVES PROJECT.1 (6) I N REVIEWING PROJECTS WITH GAS PLANNING PRIORITY2 COMMUNITIES, A DUAL-FUEL UTILITY SHALL WAIVE THE PROJECT3 THRESHOLDS BELOW THOSE ESTABLISHED IN THE COMMISSION 'S GAS4 INFRASTRUCTURE PLANNING RULES . THIS ARTICLE 3.3 DOES NOT CHANGE5 GAS INFRASTRUCTURE PLANNING RULES OR REQUIREMENTS FOR6 NONPARTICIPATING COMMUNITIES OR CLEAN HEAT OR RELATED INCENTIVE7 LEVELS.8 (7) B Y JUNE 1 OF EACH YEAR FOLLOWING APPROVAL OF A9 NEIGHBORHOOD-SCALE ALTERNATIVES PROJECT , A DUAL-FUEL UTILITY10 SHALL SUBMIT A REPORT TO THE COMMISSION ON THE IMPLEMENTATION11 OF THE NEIGHBORHOOD -SCALE ALTERNATIVES PROJECT . THE REPORT12 MUST INCLUDE, AT A MINIMUM:13 (a) A N UPDATE ON PROJECT IMPLEMENTATION ;14 (b) A N EXPLANATION OF CUSTOMER SATISFACTION WITH15 ALTERNATIVE ENERGY SERVICE ;16 (c) A CTUAL PROJECT COSTS INCURRED ; AND17 (d) A NY OTHER INFORMATION REQUIRED BY THE COMMISSION .18 (8) B Y JUNE 30, 2026, THE COMMISSION SHALL OPEN A19 MISCELLANEOUS PROCEEDING TO ADDRESS , OR SHALL ADDRESS IN AN20 EXISTING MISCELLANEOUS PROCEEDING , THE PROCESS AND21 CIRCUMSTANCES TO INTEGRATE NEIGHBORHOOD -SCALE ALTERNATIVES22 PROJECTS INTO THE GAS INFRASTRUCTURE PLANNING PROCESS . THIS MUST23 INCLUDE THE CRITERIA TO EXPAND TO COMMUNITIES THAT RECEIVE GAS24 SERVICE, BUT NOT ELECTRIC SERVICE, FROM A DUAL-FUEL UTILITY AND25 GAS-ONLY UTILITIES, AND ALSO ASSESSING THE REQUIREMENTS FOR LOCAL26 GOVERNMENTS AND THE UTILITY TO BRING FORWARD AND ASSESS27 HB24-1370 -12- PROJECTS BEYOND THOSE WITHIN THE INITIAL GAS PLANNING PRIORITY1 COMMUNITIES.2 SECTION 2. Act subject to petition - effective date. This act3 takes effect at 12:01 a.m. on the day following the expiration of the4 ninety-day period after final adjournment of the general assembly; except5 that, if a referendum petition is filed pursuant to section 1 (3) of article V6 of the state constitution against this act or an item, section, or part of this7 act within such period, then the act, item, section, or part will not take8 effect unless approved by the people at the general election to be held in9 November 2024 and, in such case, will take effect on the date of the10 official declaration of the vote thereon by the governor.11 HB24-1370 -13-