In Colorado, one regulatory body oversees everything from home energy costs to driverless cars

Will the cost of keeping the heat and lights on at home keep climbing? Will renewable energy provide enough power for all the homes, businesses, electric vehicles and energy-intensive computing centers? What about driverless cars?

Those are just a few of the questions facing Coloradans as technology leaps forward and companies juggle growing demand for electricity while tackling goals to cut greenhouse gas emissions. At the center of crucial decisions on energy resources, mitigating climate change, changes in telecommunications and transportation and the safety of natural gas pipelines is the Colorado Public Utilities Commission.

In fiscal 2023-2024, the agency, PUC for short, fully regulated 178 utilities and 379 transportation carriers. The PUC had partial authority over two municipal utilities, one cooperative electric utility and 276 telephone service providers that deliver connections via the internet. The agency also dealt with the safety of 1,810 transportation carriers and 109 gas pipeline operations in the state.

The commission is expected to ensure the services are safe, reliable and affordable.

Even with all that in the agency’s wheelhouse, Director Rebecca White isn’t sure a lot of people know much about the PUC. Or that it even exists.

“We’re trying to make it a little bit easier to engage with an agency that maybe a lot of you hadn’t even heard of until this issue came before you all,” Rebecca White told a room of more than 200 people at the Elbert County Fairgrounds on Dec. 12.

White and the three commissioners held a hearing in Kiowa on Xcel Energy’s request that the PUC overturn Elbert County’s denial of permits for construction of 48 miles of transmission lines and equipment. The county wants the lines, part of Xcel’s expansive Colorado Power Pathway project, built farther east of the proposed route.

The commissioners and staff members went to Pueblo and Canon City in 2024 to hear from residents and business people when Black Hills Energy proposed raising rates by nearly 14%. PUC spokeswoman Megan Castle said the agency has increased the number of in-person and virtual public hearings and has expanded its method of outreach: using social media, NextDoor and the PUC website for feedback on specific topics, such as new safety rules for ride-share companies.

“Everything we touch impacts the daily lives of Coloradans,” said White, director since May 2023. “You’ve got your utility bill. We also regulate natural gas pipeline safety.”

The commission regulates taxi rates, towing companies and aspects of ride-share companies, such as licensing, permits and safety requirements. White said you could argue that the public doesn’t have to pay a lot of attention to the PUC because the agency is there to serve the public interest.

“But I want folks to know when they have the opportunity to weigh in and give us their input,” she added. “That’s really important, otherwise we’ll only hear from the utilities.”

Participation by the public is up because the PUC has prioritized more hearings to take public comment, said Erin O’Neill, deputy director of energy and water utilities. Virtual hearings also make it easier for people to engage.

“It’s so much easier for people to jump on a Zoom call instead of physically coming down and sitting there for two hours,” O’Neill said.

In recent hearings, PUC staff members have mentioned the high number of comments the public has submitted in certain cases. Proposed rate increases drive feedback. The commission received a flurry of complaints about soaring heating bills in 2023 and random power outages in metro Denver and on the Western Slope, prompting an investigation by the staff.

Colorado’s energy future, including efforts to transition from fossil fuels to renewable and carbon-free power sources, generates reams of comments and documents from utilities, the public, consumer advocates and parties who file as intervenors in the proceedings

The most recent big-ticket topic was the first phase of Xcel Energy’s just transition plan, intended to map out the path that Colorado’s largest electric utility will take to meet state mandates for cutting greenhouse gas emissions as well as the demand for more electricity. The plan, recently approved by the PUC, includes phasing out all the company’s coal plants and providing compensation for communities that have been home to coal plants and mines for decades.

Environmentalists and others called for renewable energy projects to replace coal plants and warned that Xcel’s projected power needs were too large and would leave ratepayers bearing the financial burden. The PUC reduced the projected power needs after citing Xcel’s forecast that residential customers could see a 50% jump in rates in 2031.

However, Denver-area businesses, worried about accommodating growth, urged the PUC not to scale back Xcel’s target. Residents and business leaders in communities where coal has been a big part of the economy campaigned for natural gas or nuclear power to replace coal plants rather than solar and wind power and batteries.

The plan could produce billions of dollars in spending. It generated hundreds of pages of documents. The written decision issued in November was 276 pages long.

And it’s not over. Numerous parties have asked the PUC to reconsider the decision. The commission currently has 40 open proceedings, some of which might take a year or more to complete.

It’s complicated

“In the old days, the PUC would just have a rate case or two to worry about. Now, it’s really complex because you have this energy transition going on,” said John Gavan, who was a commissioner from 2019 until January 2023.

Gavan, a former board member of the Delta-Montrose Electric Association, joined the commission just as House Bill 1261 was passed. The law set statewide goals for dramatically cutting greenhouse gas emissions from 2005 levels.

The governor appoints the three commissioners, who must be confirmed by the state Senate.

Gavan said the PUC has had to make hard decisions when balancing the benefits of reducing emissions with keeping utility rates affordable. He points to the recent decision on a “clean heat” policy that requires investor-owned utilities to slash emissions from the natural gas they provide by 41% in 10 years.

Republicans in the Colorado House attacked the policy. Their letter asking the PUC to reverse the decision said the move will drive up people’s heating bills and ignores “that natural gas is one of the only reliable and affordable ways thousands of Coloradans stay warm.”

Gavan said transportation has become a flash point with “all kinds of issues and regulatory problems” involving ride-share companies. “And get ready. You just saw that Waymo is going to start operating in Denver,” he said, referring to the autonomous driving technology company.

Asked what it is about his job that keeps him up at night, PUC Chairman Eric Blank answered, “Affordability, affordability, affordability.

“We have to do everything we can to make sure that energy is affordable,” Blank said.

The cost of wind and solar power have declined, becoming competitive with coal and natural gas. The Energy Information Administration reported that renewables made up 43% of Colorado’s in-state electricity net generation in 2024. Coal-fired power plants accounted for 27% of the total, down from 60% a decade earlier, and natural gas made up about 29%.

Natural gas heats the majority of the state’s buildings, according to the Colorado Energy Office.

White said Colorado is fortunate in that its electricity rates are below the national average. “But that doesn’t mean we’re taking our eyes off that ball.”

The national average cost of electricity in September was 18.07 cents per kilowatt hour. Colorado’s average was 16.7 cents.

At the same time, rising costs are top of mind for the PUC. Blank said while Xcel Energy’s retail sales rose around 0.3% the last 15 years, the company says they could increase 4% to 8% over the next few years.

The utility’s rate base was roughly $8 billion when Blank joined the PUC. The rate base is the total value of a utility’s assets, including power plants, on which a company can earn a profit. Blank said Xcel has indicated it might need to invest more than $20 billion over the next five years.

“That can be a very big increase in average residential rates,” Blank said.

A wild card is the potential expansion of data centers, large computing facilities important to the growth of AI. Xcel officials said in 2024 that about half of the growth the Minneapolis-based company could see in data-center customers will likely occur in Colorado.

The PUC included provisions in Xcel’s just-transition proposal that are aimed at ensuring that other customers don’t get stuck paying for the electricity if some of the data centers don’t materialize.

The New York Times reported that rising utility bills were a factor in some state and local elections in November. Virginia Gov.-elect Abigail Spanberger pledged to lower energy bills and make data centers pay more. New Jersey Gov.-elect Mikie Sherrill promised to freeze utility rates.

A really good slingshot

University of Denver law professor K.K. DuVivier, who focuses on energy, has followed the PUC and participated in various proceedings for several years. She said she has seen changes during that time in how the commission operates and believes members have become less likely to bend to utilities’ will.

“One thing I’ve been seeing over the years is that our legislature has been giving more power to the PUC to protect the public and I’m really happy about that,” DuVivier said.

When the Colorado General Assembly considers the PUC sunset law in the upcoming session, DuVivier hopes lawmakers expand the agency’s authority as part of the process that reviews programs. Lawmakers will vote on reauthorizing the agency.

There’s a kind of social contract under which utilities operate essentially as monopolies to provide a public service and in exchange are regulated. DuVivier thinks more competition in areas such as rooftop solar and electric vehicle charging could spur more innovation, energy efficiency and cost savings.

“It’s so convenient to let the monopoly just step into areas that were once competitive or could be competitive,” DuVivier said.

She sees a disparity in the balance of power between the PUC and the larger companies. Utilities don’t always release all the information the public and other parties need to make their cases, she said.

Former PUC member Gavan agreed. “The utilities hold all the key data and prying it out of them is a real challenge,” he said.