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Incentives/Policies for Renewables & Efficiency

Printable Version
Energy Efficiency Resource Standard   

Last DSIRE Review: 08/04/2014
Program Overview:
State: Colorado
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: Custom/Others pending approval
Applicable Sectors: Investor-Owned Utility, Natural Gas Utilities
Electric Sales ReductionStatutory Requirement: 5% of 2006 electricity sales by 2018
Electric Peak Demand ReductionStatutory Requirement: 5% of 2006 peak demand by 2018
Natural Gas Sales ReductionVaries
Web Site:
Authority 1:
CRS 40-3.2-101, et seq.
Authority 2:
Date Enacted:
Date Effective:
CPUC Decision No. C11-0442 (Xcel Energy's Requirements)
Authority 3:
Date Enacted:
Date Effective:
CPUC Decision No. C14-0731 (Xcel Energy's Requirements, 2015-2020)
Authority 4:
Date Enacted:
Date Effective:
CPUC Decision No. R12-0900 (Black Hills Energy's Requirements)
Authority 5:
4 CCR 723-4 (Natural Gas Rules)

The Colorado legislature enacted H.B. 1037 in 2007, requiring electricity and natural gas investor-owned utilities (IOUs) to engage in demand response and adopt demand-side management (DSM) programs that provide financial incentives for customers to purchase more efficient equipment and use more efficient processes. The law requires these utilities to meet minimum energy and demand savings goals but authorized the Colorado Public Utilities Commission (PUC) to revise the goals and establish interim savings goals as it deems appropriate. The PUC has carried out several procedures to establish electric DSM goals and develop cost recovery mechanisms for the two electric IOUs. The PUC reviews programs annually through filings made by each utility as required by the law.

Electricity Savings Goals

The PUC adopted electricity savings goals of 5% of the utility's 2006 peak demand and electricity sales by 2018 for Colorado’s two electricity IUOs, Xcel Energy (also known in Colorado as the Public Service Company) and Black Hills Energy. The PUC set an efficiency target to account for half of the expected increase in demand every year, which meets the goals established by the Colorado legislature. While the statutory goals end in 2018, the PUC extended electricity sales reduction goals through 2020.

Xcel Energy

After establishing the initial goals for both IOUs, the PUC has revisited the goals while reviewing the utilities' DSM plans. The goals established for Xcel Energy in March 2011 were higher than the original goals, beginning with a 1.14% annual reduction in 2012 and increasing each year to a 1.68% annual reduction in 2020. In 2014, the energy saving goals for 2015-2020 were decreased from 2,914 gigawatt-hours (GWh) to 2,400 GWh over the 6-year period, or 400 GWh per year. 

Black Hills Energy

The goals established for Black Hills Energy in 2012 were similarly larger than the original goals and designed to surpass the statutory goal of a 5% reduction of 2006 electricity sales by 2018. The energy savings goals are:

  • 30,935 megawatt-hours (MWh) for 2012-2013,
  • 22,285 MWh for 2014, and
  • 24,992 MWh for 2015.

Demand Reduction Goals

Xcel Energy

The PUC established demand response goals for Xcel Energy for the following amounts, inclusive of a 65 MW annual reduction from energy efficiency:

  • 593 MW in 2015,
  • 602 MW in 2016,
  • 620 MW in 2017,
  • 640 MW in 2018,
  • 663 MW in 2019, and
  • 688 MW in 2020.

Black Hills Energy

The PUC established demand response goals for Black Hills Energy for the following amounts:

  • 8,202 kW for 2012-2013,
  • 6,341 kW for 2014, and
  • 7,017 kW for 2015.

Natural Gas Savings Goals

H.B. 1037 required the PUC to undertake a rule-making proceeding that would develop expenditure and savings goals, determine cost recovery, and create a financial bonus structure. The law also established that gas utilities must spend at least 0.5% of their previous year’s revenue on DSM programs each year. The law prevents the PUC from assigning financial penalties to gas utilities that fail to meet their energy savings goals but requires utilities to submit annual reports to the PUC. The reports must highlight their program spending, energy savings, and the cost effectiveness of their programs from the previous year.

  Keith Hay
Colorado Public Utilities Commission
1560 Broadway, Suite 250
Denver, CO 80202
Phone: (303) 894-2000
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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