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S&P Global Market Intelligence ($):

Colorado will require investor-owned electric utilities to incentivize building electrification, marking a new strategy to reduce the building sector’s reliance on natural gas and other fossil fuels for heating and cooking.

Colorado Gov. Jared Polis signed the legislation, SB21-246, into law on June 21, setting in motion a process that will see the Colorado Public Utilities Commission implement a beneficial electrification program. Under that program, investor-owned electric utility operators Xcel Energy Inc. and Black Hills Corp. will have to develop plans to displace fossil fuel-powered appliances and heating systems in favor of high-efficiency electric alternatives, like heat pumps and induction stoves.

The utilities will not only be able to recover the cost of operating the programs, but they will qualify for incentives by exceeding any electrification or emissions reduction targets that regulators establish. The law authorizes the companies to offer incentives to their electric customers, even if another utility distributes gas to the customer.

Xcel and Black Hills both provide electric and gas distribution services in Colorado. Atmos Energy Corp. distributes gas to about 120,000 Coloradans, while Colorado Natural Gas Inc. serves roughly 22,600 Centennial State customers.

[Tom DiChristopher]

More: Colorado requires utilities to run building electrification incentive programs

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