HB 26-1225

HB 26-1225, also known as the Distributed Energy Resources Requirements bill, aims to improve community solar programs and streamline interconnection processes for renewable energy systems in Colorado. Starting July 1, 2026, it requires annual adjustments to fixed credits given to subscribers of community solar gardens to keep up with changing electricity rates. Additionally, the bill prevents utility companies from charging customers for interconnection costs until just before those costs are incurred and encourages utilities to work with third parties on studies and upgrades needed for connecting new energy resources. The bill has been signed into law, meaning these changes will take effect as scheduled unless further action is taken.

Official Summary

Under current law, each subscriber to a community solar garden receives a net metering credit to their electric bill. The community solar subscriber organization can choose between a fixed bill credit or a bill credit that is adjusted annually. The bill states that, on and after July 1, 2026, an annual adjustment mechanism must be applied to fixed bill credit rates to index the value of the fixed bill credit to changing rate trends October 1, 2026, a subscriber organization may choose a fixed bill credit for the subscriber organization's income-qualified subscribers and a bill credit that changes annually for the subscriber organization's other customers. The public utility providing the bill credit must adjust the fixed bill credit annually to ensure that the credit remains aligned with changes in electricity rates over time.     A public utility is permitted under current law to recover its prudently incurred costs to facilitate a timely interconnection of a distributed energy resource. The bill prohibits a public utility from requiring an interconnection customer to pay the costs associated with interconnection facilities and upgrades until 30 days before the public utility incurs the costs. The bill allows a public utility to require an interconnection customer to provide security for the estimated full costs of interconnection at the time of mutual execution of an interconnection agreement.      The bill requires a public utility to: On or before July 1, 2026, develop a process to allow an interconnection customer to contract with a third party to perform an interconnection study; On or before September 1, 2026, develop a process to allow for the concurrent performance of all needed interconnection studies; and On or before October 1, 2026, develop a process to allow an interconnection customer to contract with a third party to perform any upgrades needed for interconnection, including engineering, procurement, and construction upgrades.      The bill requires a public utility with more than 500,000 customers in the state to, on or before August 15, 2026, convene a working group to accelerate distributed generation interconnection. The working group is tasked with discussing, if applicable, a cluster and batch study process for interconnection studies and a process for the public utility to accept a surety bond for interconnection upgrade work. The working group is also directed to discuss and implement a process for third-party interconnection studies and upgrades.      On or before December 15, 2026, the public utility is required to provide to the public utilities commission (commission) any recommendations of the working group. The commission is required to review the recommendations provided by the working group, and the public utility is directed to implement any unanimous recommendations on or before January 1, 2027, and other recommendations on or before January 31, 2027.      An The bill specifies that any interconnection study and upgrades that are performed by a contracted third party must meet applicable safety, reliability, labor, and technical standards.      The bill amends the definition of 'dispatchable distributed generation' and requires the commission to evaluate the size of off-site renewable distributed generation or storage facility and installation limitations as part of a future renewable energy standard compliance plan.(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

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