Facing rising utility bills, clean energy mandates and new demands for power, especially from data centers, a chorus of utilities and business groups is united saying the Colorado Public Utilities Commission needs an overhaul.
In part, the push appears to be prompted by some controversial commission decisions. On Saturday, Republican lawmakers tried unsuccessfully to amend the bill dealing with the routine reauthorization of the commission to expand the three-person panel to five members.
“We’re simply not getting a good representation on the PUC with three people,” said Rep. Dan Woog, a Frederick Republican. “It’s just of the utmost importance that we have people there that understand different parts of the state.”
Xcel Energy, which is regulated by the PUC and has $511 million in electricity and gas rate increases pending before the commission, has been a major advocate of a five-member commission.
Robert Kenney, president of Xcel’s Colorado subsidiary, said it would be an opportunity to add “more ideological diversity” to the commission.
“Being able to test your ideas against other people who don’t necessarily share your same perspective leads to generally better public policy outcomes,” Kenney said. “So that’s what I mean about greater ideological diversity.”
“It is not a commentary on the three specific commissioners. I will be really clear about that,” Kenney said.
A compromise amendment was added for a study of the composition, budget and operations of the PUC. The fiscal note on a bill for a five-member commission last session estimated the cost at just under $1 million.
House Biill 1326, also known as the Sunset Public Utilities Commission bill, is racing through the legislative session in its final days and would extend the operations of the PUC for 11 years.
What does the Public Utilities Commission oversee?
The commission oversees 178 companies and services ranging from taxis to telecommunications to railroads to pipelines.
Its main focus, however, has been on the electric and gas utilities it regulates and particularly the single biggest utility, the subsidiary of Minneapolis-based Xcel Energy, which serves 1.6 million electric customers and 1.5 million natural gas customers in the state.
Some critics contend that the commission is putting green energy ahead of cost savings; others say that it is focused on urban areas at the expense of rural ones. Xcel Energy has criticized the size of some of its rate and resource decisions.
“The PUC has been performing well in its role of protecting consumers from potential exploitation from monopoly utilities,” said Erin Overturf, clean energy director for the environmental nonprofit Western Resource Advocates.
“So, it is interesting that we’re seeing what kind of feels like a coordinated effort from utilities to undermine faith in the PUC or to fundamentally reshape the agency.”
It is an unprecedented time for the commission as the rate requests and investment plans rise into the billions of dollars, the legislature continues to issue mandates to the PUC and the demand for power rises.
“We’re dealing with the largest demand for energy probably since the invention of air conditioning,” said Ray Rivera, director of Colorado Energy Crossroads, a coalition of labor unions, business groups and utilities.
“So, you know, we need to modernize the PUC to meet that demand,” Rivera said. The two electric utilities regulated by the PUC — Xcel Energy and Black Hills Energy — are coalition members.
There have been a few decisions that have drawn criticism and huge spending requests have sometimes left utilities and the commission at loggerheads.
A commission ruling, employing a little-used statute, overturned an Elbert County denial of Xcel Energy permits for a high-tension transmission line through the county, sparking anger from rural legislators.
The decision allowed Xcel Energy to use eminent domain to gain the rights of way it needs. Elbert County has asked for a rehearing before the PUC.
The commission has received a steady stream of mandates from the legislature, which in the last five years passed at least 20 bills to initiate programs to do things such as promote EVs, mitigate wildfires, upgrade distribution lines and cut greenhouse gas emissions.
Legislation enabled the utilities to do things like add charges on customer bills for new programs or allow Xcel Energy to accelerate recovery of funds or include performance bonuses.
The Xcel Energy EV, wildfire mitigation, distribution and clean heat plans — to reduce greenhouse gas emissions from natural gas utilities — total about $3 billion.
In each case the commission was left to interpret the legislature’s orders and devise a plan.
For the 2019 “Just Transition from Coal-based Electrical Energy Economy” law, the commission had to come up with ways to soften the blow of coal-fired plants closing in Craig, Hayden, Pueblo and Morgan County.
The solution, however, left some of the communities, especially Pueblo, feeling shortchanged. Pueblo business organizations support the five-member commission now.
“The legislature has the lion’s share of the blame here, because they are handing the PUC increasingly incoherent mandates,” said Sarah Montalbano, an analyst with the Independence Institute, a conservative political nonprofit.
“They’re doing a fair job with what they’re being handed by the legislature, but they’ve absolutely been straying from ratepayer protection,” Montalbano said.
Particularly contentious was the commission’s execution of Senate Bill 264, the 2021 legislation requiring natural gas utilities to develop “Clean Heat Plans” to cut their greenhouse gas emissions 22% by 2030 with a 2.5% cap on how much rates could rise.
The utilities presented data to the commission that they couldn’t get to a 22% reduction with the funds limited by a 2.5% rate cap. The commission granted waivers. Xcel Energy’s Clean Heat Plan will cost $440 million.
“I think they strayed from the cost protection mission on that one,” Montalbano said.
And then in December the commission voted to raise the 2035 reduction target to 41%. Xcel Energy proposed 30% and environmental groups were pushing for 55%. It was a 2-1 vote, with PUC Chairman Eric Blank voicing concern about the sharp increase.
Advance Colorado, which describes itself as an organization focused on “reversing radical policies that are harming the state,” has filed a ballot initiative to put “a right to natural gas” in the state constitution.
Commissioners claim shortage of information
As the demands for new investment and rates have increased and Xcel Energy has faced problems running its plants, the commissioners have expressed frustration with the company.
In 2024, the commission was deluged with complaints as Xcel customers suffered a doubling of blackouts and logged customer complaints jumped 100% in three years, according to a commission report.
“We’re seeing a company before us requesting tens of billions of dollars to buy new things, to do new things when they appear to be falling short of their basic core commitments to the customers that they exist to serve,” Commissioner Megan Gilman said at the time.
Xcel Energy responded to the report, saying it was adding staff and addressing the issues.
The commission has also repeatedly chided Xcel for not providing adequate information for its decision-making, most recently citing issues with transmission.
“I am really frustrated with the company’s transmission analysis and planning,” Blank said May 6. “They need to quickly provide us with a better picture of the transmission system … before we spend hundreds of millions of dollars or billions of dollars in additional resources.”
The commission has also been concerned over multiple plant failures potentially leading to a shortage of peak power for the summer.
In August, the breakdown-prone Comanche 3 Unit in Pueblo was damaged by “severe vibrations.” In late November, Hayden Units 1 and 2 went offline due to a partial collapse of a portion of a scrubber removing pollutants from emissions.
Xcel’s Cabin Creek Pump Storage Project and its 93 megawatts of power suffered a turbine failure in February.
“I’ve been on this commission for six years,” Gilman said at one review. “This is the second entire year that Comanche 3 has not run. That’s a third of the time I’ve been here, and that’s only with these two major outages.”
However, the prospect of billions of dollars in investments driving up rates concerns the commission most.
Xcel Energy, as all investor-owned utilities, makes its money not so much by selling electricity as building new plants and wires, putting them into a so-called rate base, and getting that money back, plus a return on it.
The utility’s $15 billion, four-year investment plan for its electric system would by one estimate increase the rate base to about $38 billion in 2032. It was $6 billion in 2021.
This on its own could lead to a doubling or tripling of electricity rates.
Xcel Energy says the investments are needed to upgrade an aging grid, provide for growing electricity demand, harden the system against wildfire and extreme weather, ensure reliable service and meet the state clean energy goals.
The investments and rates will be offset by a big increase in electricity sales to data centers and other industrial users, the company projects.
The commissioners say they are concerned about what happens if the capital investments are made and the sales and revenue growth don’t materialize.
“It appears increasingly that the benefits are set to flow to the company given any scenario and the vast majority if not all the risk appears to be on the customer. That is the piece we need to address,” Gilman said at one meeting.
Republicans argue for geographic representation
Xcel Energy had sought 12,000 to 14,000 MW of new generation in its plan, but concerned about the impact on rates, the PUC scaled it back to about 7,000 MW.
“This is a regulated monopoly operating in a legally defined service territory where competition is prohibited, and in return for that privilege of operating as a monopoly, they shouldn’t be driving profit at the expense of customers,” Blank said previously.
Xcel Energy is seeking a $356 million electricity rate hike and a $155 million natural gas rate increase. The commission staff calculates that the electricity increase would raise residential bills 30%.
In 2025, Xcel Energy’s Colorado operations made $903 million in operating profits.
It is against this backdrop that the debate on overhauling the commission is taking place.
“We’re all trying to do the same thing on behalf of our customers in our communities,” Xcel Energy’s Kenney said. “There’s been an increasing or evolving tension, and I think that’s unfortunate.”
There is a hope that expanding the commission could defuse some of that tension.
“How can we create something that’s not adversarial, but rather helping look at long-term planning, look at alignment?” said Richard Werner, Upstate Colorado Economic Development CEO and a supporter of a five-member commission.
Of course, since the PUC is a quasi-judicial process, it is designed in some measure to be adversarial.
The Republican legislators offering amendments were pushing for geographic representation.
“It’s common sense — certainly for those of us who believe that we need to do this,” Woog said. “The PUC wields a lot of power to serve the entire state,” Woog said.
Blank is a Boulder resident. Gilman lives in Edwards and Commissioner Tom Plant is from Buena Vista.
The Public Utilities Commission was created in 1913 and proponents of the five-member board say it is time for a change.
“The world in which we are operating today is infinitely more complex than it was, certainly 100 years ago and even 10 years ago, which, to my mind, dismisses the argument of continuing to do things the same way,” Kenney said.
Though, he did say the majority of utility commissions in the U.S. have three members.
“I don’t completely understand the focus on fundamentally restructuring the commission right now,” Overturf, of Western Resource Advocates, said. “It is not necessarily going to result in increased efficiency or better outcomes. In fact, they’re just going to raise the costs associated with running the agency.
“It looks like a solution in search of a problem.”