Colorado ratepayers will spend $644 million over the next three years subsidizing their neighbors to abandon natural gas heating. Then they’ll watch their own bills spike as the costs of maintaining 24,000 miles of pipeline fall on fewer customers trapped in a shrinking system.
The Public Utilities Commission finalized rules December 2 requiring utilities to cut natural gas emissions 41% by 2035 and eliminate them entirely by 2050. The decision came despite opposition from utilities, consumer advocates, and labor unions who warned the compressed timeline would devastate affordability.
The Sierra Club and Southwest Energy Efficiency Project—funded by the Energy Foundation, Hewlett Foundation, Edwards Mother Earth Foundation, and the Colorado Governor’s Energy Office—successfully lobbied for the mandate. Black Hills Energy estimates compliance will cost $397 million annually. Xcel Energy projected $1 billion over five years.
A typical home conversion costs over $20,000. Federal rebates offer $140 million through 2029, but only for households earning below 150% of area median income. Most working families don’t qualify. The state mandate remains permanent.
PUC Chairman Eric Blank spent the 1990s leading Western Resource Advocates before co-founding a renewable energy company where he built $4 billion in wind and solar projects. Commissioner Tom Plant runs the Clean Energy Legislative Academy for state lawmakers. Governor Polis appointed both.
These commissioners approved Xcel’s Clean Heat Plan—four times larger than the entire federal rebate program for Colorado. The same foundations funding the groups that lobbied for the mandate now fund celebration of the regulatory victory that justifies their next round of donations.
Natural gas costs Colorado households one-fourth the price of electricity per unit of energy delivered. The state’s own National Renewable Energy Laboratory found that switching to high-efficiency cold-climate heat pumps—the kind suited for Colorado winters—would benefit approximately zero percent of households financially.
Xcel still sought a 9-10% base rate increase in November totaling $356 million. Common Sense Institute projects electricity rates rising 56% by 2030, adding $390-$504 annually to household bills and costing businesses $16.3-$23.5 billion. That could eliminate 25,000 jobs.
Customers remaining on natural gas face worse. As households leave the system, fixed infrastructure costs spread across fewer ratepayers. California analysis projects rates growing 900% by 2050 for those left behind—predominantly elderly, fixed-income, and rural residents unable to afford conversion.
Senate Bill 21-264 caps Clean Heat costs at 2.5% of annual gas bills unless the PUC deems higher spending in the “public interest.” The commissioners already made that determination.
The federal rebate program excludes propane users entirely—the fuel most rural mountain households depend on. These counties face colder temperatures precisely where heat pumps lose efficiency, yet subsidize urban conversions through utility rates.
House Assistant Minority Leader Ty Winter condemned the decision: “Colorado has already watched thousands of good paying jobs disappear and seen severance tax revenue drained from the schools, roads, and rural hospitals that depend on it. Now the state is moving to dictate how families in rural Colorado heat their homes.”
Black Hills Energy noted that customer growth increases total natural gas required to calculate emission reductions, making targets “more cost-effective” if growth were removed. Fewer customers means easier compliance. The utility has financial incentive to accelerate the exodus that devastates remaining ratepayers.
Xcel Energy earns 9.3% return on equity for capital investments. The company plans to increase its Colorado electric assets from $8 billion in 2021 to $44.6 billion by 2032. Clean Heat mandates requiring infrastructure buildout guarantee those profits.
Heat pump contractors registered with state programs—Elephant Energy, UniColorado, and others—access the $644 million market. The Denver Regional Council of Governments received $200 million in federal grants to coordinate conversions. The Colorado Energy Office distributes these dollars through registered contractor networks while steering policy through PUC appointees who share the governor’s agenda.
When federal rebate funding exhausts in 2029, the state mandates requiring 41% cuts by 2035 and 100% elimination by 2050 remain in full force. Colorado statute requires utilities to file Clean Heat Plans every four years. The PUC must approve them. Ratepayers must pay.
Foundation-funded groups lobbied appointees with matching ideologies to approve ratepayer spending. Utilities earn guaranteed returns. Contractors gain subsidized markets. Federal money sweetens the pitch temporarily.
Then the federal money disappears. The mandate remains. And Colorado ratepayers discover they’ve been funding the elimination of their most affordable heating option while subsidizing profits for everyone involved—with no vote, no choice, and no way out except abandoning the system that will cost them more whether they stay or leave.
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