Development of Thermal Energy Resources

     A qualifying entity is an industrial or commercial facility operator that recovers thermal energy as a by-product of its primary industrial or commercial processes. The bill permits the sale of recovered thermal energy by a qualifying entity under certain conditions, including:

• The thermal energy is a by-product of the qualifying entity's primary industrial or commercial process, and the thermal energy is not generated primarily for retail sale;
• The qualifying entity's primary business activity is not the operation of a public utility;
• The recovery and sale of thermal energy does not result in an increase in fossil fuel combustion beyond what the qualifying entity's primary industrial or commercial process requires;
• The recovered thermal energy is sold pursuant to a contract between the qualifying entity and a purchaser; and
• The qualifying entity does not sell electricity, natural gas, or other commodities regulated by the public utilities commission as part of the transaction.

     The bill authorizes a local government or a special district (local government) to enter into an agreement with one or more entities for the purpose of providing the local government with service from a thermal energy network. The local government may issue bonds for the purpose of financing thermal energy infrastructure, interconnections, or customer connections within the jurisdiction of the local government.

     The bill also increases the net electric generating capacity of a community geothermal garden from 5 megawatts to 25 megawatts. The bill requires a qualifying retail utility to purchase a minimum amount of electricity from community geothermal gardens, as determined by the public utilities commission.

     Under current law, if a municipality builds or acquires gas or electric works and distribution systems, the municipality must get voter approval at the next municipal election. The bill removes the voter approval requirement if the municipality builds or acquires heating and cooling works and distribution systems for the distribution of heat and cooling obtained from geothermal resources or from waste and cogenerated heat.

     The bill requires the Colorado energy and carbon management commission (commission) and the Colorado geological survey to collect data and information related to the development of geological resources in the state. The commission shall make recommendations to encourage safe and effective development of geothermal resources and report those recommendations to the general assembly on or before November 15, 2026.

     The bill requires investor-owned electric utilities (utilities) to identify small-scale geothermal projects and large-scale geothermal projects (geothermal projects). The utility must solicit proposals for the development of small-scale geothermal projects of up to 25 megawatts of net electric generating capacity and large-scale geothermal projects that are greater than 25 megawatts of net electric generating capacity. The utility may submit the proposals to the public utilities commission as part of the utility's next electric resource planning filing. A utility may also partner with a specific customer or group of customers to develop geothermal projects if the specific customer agrees to certain conditions, such as covering at least 50% of the cost of development of the project.
(Note: This summary applies to this bill as introduced.)