ColoradoSB26-1422026 Regular SessionSenate

Development of Thermal Energy Resources

Sponsored By: Cathy Kipp (Democratic), Junie Joseph (Democratic), Matt Ball (Democratic), Ryan Gonzalez (Republican)

Signed by Governor

Business & Economic DevelopmentEnergyLocal Government

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 6 benefits, 0 costs, 3 mixed.

Wage and training protections for geothermal workers

Beginning August 12, 2026, geothermal projects authorized under this law must follow prevailing-wage rules when classified as energy sector public works. These projects must also meet state apprenticeship-use requirements and other required labor standards. The protections cover workers on qualifying small- and large-scale projects, not every geothermal project. The law sets no specific wage amount.

Colorado studies support for geothermal development

The Energy and Carbon Management Commission must recommend ways to support safe geothermal development and consult knowledgeable state agencies. Recommendations may consider a nonregulatory authority to support public-private partnerships, federal funding, and financial risk protection. Possible support includes deep exploratory drilling, transmission, and thermal network studies. Recommendations are due to legislative committees by November 15, 2026; specified related provisions expire September 1, 2028, unless continued. The law does not create the authority or provide funding for it.

Community geothermal gardens get higher capacity limits

Beginning August 12, 2026, community geothermal gardens can have up to 25 megawatts of net electric generating capacity. This replaces the prior 5-megawatt nameplate limit and approvals allowing up to 10 megawatts. Projects can be larger, but 25 megawatts remains the fixed ceiling for this category. The change does not guarantee construction or lower electricity bills.

Free geothermal data with privacy protections

The Energy and Carbon Management Commission and Colorado Geological Survey must help collect geothermal data when funding or donations are available. They can use existing wells where feasible, or new wells when funded, and must provide free, searchable public access. Collection must respect property rights and avoid added risks to people, the environment, and wildlife. Outside contributions are voluntary, and proprietary data cannot be forced into public release without the owner's consent. The commission cannot make oil and gas approvals depend on adding operators' wells to the program.

Local governments can arrange shared heating

Beginning August 12, 2026, local governments and special districts can combine thermal energy demand, including demand from willing private participants. This demand-sharing activity is not regulated as a utility. Local governments can sign service agreements lasting up to 25 years, with government payments subject to yearly funding approval. Private contracts to build or run networks need governing-body approval; service agreements can also show customer demand in utility proceedings. Networks can serve outside local boundaries through government-to-government or participant agreements, and thermal service does not violate exclusive natural gas franchises.

Local network financing keeps voter safeguards

Local governments already allowed to issue bonds can finance thermal networks and customer connections. Network bonds issued under this authority must be repaid solely from network revenue, not as general government obligations. Any general obligation bonds remain subject to constitutional and legal limits. Municipalities must get voter approval before selling or disposing of a thermal network, including approval of the deal's terms and payment. The law sets no bond amount or household charge.

Some thermal operators avoid utility oversight

Eligible private companies can operate, maintain, or manage thermal networks for local governments without being treated as utilities. Their work is generally outside Public Utilities Commission oversight. This exemption excludes commission-regulated utilities and public utility affiliates. The law does not set household rates for these operators.

Utilities review larger geothermal projects and costs

Beginning August 12, 2026, investor-owned electric utilities considering geothermal projects over 25 megawatts must seek bids, targeting no more than 300 megawatts. Each utility can submit only one application through this process and must apply within 120 days after bidding ends if a bid arrives. The commission must act within 120 days, or 180 days for good cause, reviewing costs, customer impacts, reliability, benefits, and the public interest. Utilities can seek project, contract, cost-recovery, and investment-return approvals; approved recovery permits charges through customer rates. Utilities must use this experience in future electricity resource planning, but project approval and household savings are not guaranteed.

Utilities review smaller geothermal projects and costs

Beginning August 12, 2026, investor-owned electric utilities must identify geothermal opportunities of 25 megawatts or less and seek bids when considering development. After receiving a bid, utilities must apply within 120 days after the solicitation ends. The Public Utilities Commission must act within 120 days, or 180 days for good cause, considering costs, customer impacts, benefits, and the public interest. Utilities can request project and contract approvals, cost recovery, and a return on invested capital for utility-owned projects in useful service. Approved recovery allows costs through customer rates; the law guarantees neither construction nor lower bills.

Sponsors & Cosponsors

Cosponsors

Amy Paschal
Democratic • House
Bob Marshall
Democratic • House
Gretchen Rydin
Democratic • House
Jennifer Bacon
Democratic • House
Jamie Jackson
Democratic • House
Julie McCluskie
Democratic • House
Jacque Phillips
Democratic • House
Karen McCormick
Democratic • House
Kenny Nguyen
Democratic • House
Lori Goldstein
Democratic • House
Lesley Smith
Democratic • House
Monica Duran
Democratic • House
Manny Rutinel
Democratic • House
Sen. A. Benavidez
Affiliation unavailable
Dylan Roberts
Democratic • Senate
Iman Jodeh
Democratic • Senate
Judy Amabile
Democratic • Senate
Jeff Bridges
Democratic • Senate
James Coleman
Democratic • Senate
Kyle Mullica
Democratic • Senate
Lisa Cutter
Democratic • Senate
Lindsey Daugherty
Democratic • Senate
Marc Snyder
Democratic • Senate
Tony Exum
Democratic • Senate
William Lindstedt
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 157 • No: 26

Senate vote • 5/5/2026

House amendments: Repass

Yes: 25 • No: 7

Senate vote • 5/5/2026

House amendments: Concur

Yes: 32 • No: 0

House vote • 5/4/2026

Third reading: Bill

Yes: 55 • No: 10

House vote • 4/30/2026

Refer Senate Bill 26-142, as amended, to the Committee of the Whole.

Yes: 13 • No: 0

Senate vote • 4/28/2026

Third reading: Bill

Yes: 27 • No: 7

Senate vote • 4/22/2026