On December 1, 2025, the Colorado Public Utilities Commission (PUC) issued a decision establishing a new greenhouse gas emissions reduction target for certain natural gas utilities under its regulation. The ruling sets a goal to cut emissions by 41 percent from 2015 levels by the year 2035. Decisions on future targets for 2040, 2045, and 2050 have been postponed until at least December 1, 2032.
The decision also allows recovered methane to be used toward meeting these targets without imposing a specific limit on its usage. This follows the PUC’s rulemaking process that began in July of this year, which included opportunities for public comment both online and during a hearing held on September 18.
Stakeholders who wish to challenge or seek reconsideration of the new rules can file an Application for Rehearing, Reargument, or Reconsideration by December 22. The Commission will consider any such requests in a public meeting scheduled for January. Individuals interested in submitting comments may do so online or via email, including the relevant proceeding number as specified on the PUC website.
The action is part of compliance with Senate Bill 21-264. This legislation requires investor-owned gas utilities serving fewer than 90,000 customers to develop clean heat plans aimed at reducing greenhouse gas emissions statewide. Initial reduction targets were set for both 2025 and 2030; SB21-264 directs the PUC to determine further targets through rulemaking and gives it authority to specify how much emission reduction can come from recovered methane after 2030 if it meets certain criteria.
Cost impacts are also addressed by state law. The legislature capped potential rate increases related to these clean heat strategies at no more than 2.5% of annual gas bills per utility customer. Each utility must submit scenarios showing how they will meet emission goals without exceeding this threshold.
So far, two Clean Heat Plans have received approval from the PUC while another remains under review.
The requirements currently apply only to Atmos Energy, Black Hills Energy, and Xcel Energy customers—others are not affected. Utilities may achieve reductions through energy efficiency measures, electrification initiatives, use of recovered methane or green hydrogen, thermal energy technologies, or tire pyrolysis projects. Customers can voluntarily participate by adopting electric heat pumps or pursuing other energy-saving upgrades supported by rebates and incentives.
The Clean Heat Plan targets include:
– A four percent reduction from baseline emissions by 2025
– A twenty-two percent reduction by 2030
– A forty-one percent reduction by 2035
Future benchmarks will be established before December of 2032.
Additional plan considerations require consultation with the Colorado Department of Public Health and Environment and assessment of costs—including fuel prices and infrastructure investments—as well as consideration of social costs associated with carbon and methane emissions.
More information about Clean Heat Plans is available at puc.colorado.gov/cleanheatplans.
