Colorado PUC backs six-month delay in gas-spending incentive

Colorado Public Utilities Commission commissioners backed a six-month delay in a financial incentive tied to Public Service Company of Colorado’s gas-system capital spending, moving its proposed start from Jan. 1 to July 1, 2028. They also supported giving the utility and stakeholders through the end of 2027 to develop an alternative, with the existing mechanism as a fallback if no meaningful alternative emerges.

The commissioners discussed the approach Nov. 4 while considering requests to reconsider the incentive in the utility’s gas rate case. They did not vote to adopt revised terms. The chair directed staff to prepare an order for confirmation, so the existing mechanism has not yet been changed, as commissioners discussed at the meeting.

Public Utilities Commission staff summarized the existing mechanism, ordered in Decision C260627, as comparing the company’s actual 2024 gas capital spending with a baseline. It has a 5% deadband above and below that baseline and a $5 million cap on rewards and penalties. Staff said it was scheduled to begin Jan. 1, 2028. The chair’s proposed delay would give parties more time to work on another approach and allow the commission to observe the company’s 2027 spending trends.

Commissioners discussed encouraging the company to work with stakeholders toward an alternative with meaningful support by the end of 2027. They did not require a particular replacement design or majority support. If no meaningful alternative emerges, the existing spending-based mechanism would remain as the fallback.

The delay would postpone the start of potential rewards or penalties, while an alternative could change how the company’s capital spending is financially incentivized. Commissioners did not set new customer rates or quantify any effect on bills.