Colorado bill aims to establish an RNG standard for gas utilities

By Erin Voegele | February 19, 2020

Legislation recently introduced in the Colorado Senate aims to establish a renewable natural gas (RNG) standard that would require large gas utilities within the state to source a certain percentage of the fuel they supply from renewable resources.  Smaller gas utilities would also be able to opt into a RNG program.

The bill, SB20-150, was introduced on Jan. 28 and assigned to the Committee on Transportation and Energy. The Senate Committee on Transportation and Energy voted four to one on Feb. 11 to refer an amended version of the bill to the Committee on Appropriations.

Information published by the Colorado General Assembly indicates that the bill aims to require the Colorado Public Utilities Commission to adopt a rules by July 31, 2021, establishing an RNG program for large natural gas utilities, which are defined as gas utilities that have at least 200,000 customer accounts in the state. The PUC would also develop an RNG program for small gas utilities, defined as those that have fewer than 200,000 customer accounts in Colorado.

The bill defines RNG as biogas that is blended with, or substituted for, geologic natural gas; hydrogen gas derived from renewable energy sources; or methane gas derived from any combination of biogas, hydrogen gas or carbon oxides derived from renewable energy sources, waste carbon dioxide, coalbed methane resulting from human activity, naturally occurring coalbed deposits, municipal solid waste landfills, waste tire or municipal solid was pyrolysis, or biogas recovery from manure management systems and anaerobic digesters.

Large gas utilities would be required to supply at least 5 percent RNG by Jan. 1, 2025; 10 percent RNG by Jan. 1, 2030; and 15 percent RNG by Jan. 1, 2035. According to the bill, if a large natural gas utility’s total incremental annual cost to meet the targets of the RNG program exceed 5 percent of its total revenue requirement for a particular year, the utility is not to make additional qualified investments under the RNG program for that year without approval from the PUC.

Small gas utilities would be given the option to opt into a RNG program established by the PUC. According to the bill, the program would be required to include a rate cap limiting a small natural gas utility’s costs of procuring RNG from third parties and qualified investments in RNG infrastructure.

Additional information is available on the Colorado General Assembly website.