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Colorado Certificate of Public Convenience and Necessity (7-CO-c)

A utility seeking authority to construct and operate a facility or an extension of a facility must file an application for a Certificate of Public Convenience and Necessity (CPCN) with the Colorado Public Utilities Commission (Commission). 4 CCR 723-3-3102; CRS 40-5-102, Certificate of Public Convenience and Necessity. If the developer does not qualify as a “public utility” under Colorado law, then a CPCN is not required. The Commission regulates public utilities pursuant to Colorado Code of Regulations 4 CCR 723-3, Rules Regulating Electric Utilities, Colorado - C.R.S. 40-5-101 et seq., Utilities-New Construction – Extension and CRS 24-65.1-108. In addition, state law requires the Commission to give the fullest possible consideration to the cost-effective implementation of clean energy in its considerations of generation acquisitions for electric utilities, keeping in mind economic and environmental factors. Colorado - C.R.S. 40-2-101 et seq., Public Utility Commission – Renewable Energy Standard.


Hydropower

The Federal Energy Regulatory Commission (FERC) has jurisdiction over most hydroelectric projects, including primary transmission lines required for the project. However, a developer may need to obtain a CPCN from the Commission for transmission line extension projects, interconnected group net-metered hydroelectric power systems, and conduit projects less than five megawatts. CRS 40-5-102, Certificate of Public Convenience and Necessity.


Certificate of Public Convenience and Necessity Process

7-CO-c.1 to 7-CO-c.2 — Does the Developing Entity Fall Under the Definition of a Public Utility?

If the developer does not fall under the definition of a public utility, then a Certificate of Public Convenience and Necessity (CPCN) is not necessary and the project may continue. A “public utility” means any utility as defined by Colorado - C.R.S. 40-1-101 et seq., Definitions, providing electric, steam, or associated services in the state of Colorado. 4 CCR 723-3-3001(oo).

According to CRS 40-1-103,- Public Utility Defined, "the term 'public utility'...includes every...electrical corporation...operating for the purpose of supplying the public for domestic, mechanical, or public uses and every corporation, or person declared by law to be affected with a public interest, and each of the preceding is hereby declared to be a public utility and to be subject to the jurisdiction, control, and regulation of the commission..." In addition "[e]very cooperative electric association, or nonprofit electric corporation or association, and every other supplier of electric energy, whether supplying electric energy for the use of the public or for the use of its own members, is hereby declared to be affected with a public interest and to be a public utility and to be subject to the jurisdiction, control, and regulation of the commission and to the provisions of articles 1 to 7 of this title."

Under the broad definition of public utility, a geothermal energy generation facility is most likely a public utility.

However, rural electric cooperatives do not need a CPCN for new construction or an expansion of generation facilities if such construction or expansion is contained entirely within the cooperative’s certificated area. 4 CCR 723-3-3205(a).

7-CO-c.3 - Is Facility Construction in the Ordinary Course of Business?

The utility does not need to apply to the Colorado Public Utilities Commission (Commission) for approval of construction and operation of a facility or an extension of a facility, which is in the ordinary course of business. 4 CCR 723-3-3205(b). The ordinary course of business includes:

  • Facilities generating less than 10MW, and
  • A generating plant remodel, or installation of any equipment, or building space required for pollution control systems.

4 CCR 723-3-3205(b).

The Commission makes an assessment of whether the project is constructed in the “ordinary course of business” on a case-by-case basis, but there are a number of factors the Commission generally takes into account when making the determination, including:

  • Whether the facilities service continuous areas to expand service to new customers;
  • Expansion of service into other non-contiguous areas within a utility’s certified service territory;
  • New supply source connections;
  • The accounting treatment of facilities;
  • The existence of any other utilities that may be impacted by the new facilities;

Colorado Public Utility Commission Decision R09-0365 at ¶25.

The Commission may also look at the factors below to determine whether the proposed project is in the “normal course of business”:

  • Size, cost and planned operation of the project;
  • Whether the project is necessary to serve load growth;
  • The presence of novel financing arrangements, which usually indicate that the project is not in the ordinary course of business;
  • Whether the project from other distribution system expansions in the ordinary course of business to serve current and anticipated customers.

Colorado Public Utility Commission Decision R08-0925 at ¶¶28, 33.

The Commission also stated that the “normal course of business includes only that which is routine, ordinarily-occurring, and usual for the business under review.” Colorado Public Utility Commission Decision R05-1224.

7-CO-c.4 — Application for CPCN

The developer must submit a complete CPCN seeking approval by the Commission to provide service to a new geographic area, enter a franchise agreement, or to construct and operate a facility or an extension of a facility. 4 CCR 723-3-3002(a), Applications. All applications, at minimum, must include, either in the application or in appropriately identified attached exhibits:

  • The name and address of the applying utility;
  • The name(s) under which the applying utility is, or will be, providing service in Colorado;
  • The name, address, telephone number, facsimile number, and e-mail address of the applying utility's representative to whom all inquiries concerning the application should be made;
  • A statement that the applying utility agrees to answer all questions propounded by the Commission or its Staff concerning the application;
  • A statement that the applying utility shall permit the Commission or any member of its Staff to inspect the applying utility's books and records as part of the investigation into the application;
  • A statement that the applying utility understands that, if any portion of the application is found to be false or to contain material misrepresentations, any authorities granted pursuant to the application may be revoked upon Commission order;
  • In lieu of the separate statements required by subparagraphs (IV) through (VI), a utility may include a statement that it has read, and agrees to abide by, the provisions of subparagraphs (IV) through (VI);
  • A statement describing the applying utility’s existing operations and general service area in Colorado;
  • For applications listed in 3002(a)(I), (II), (III), (V), and (VI), a copy of the applying utility's or parent company’s and consolidated subsidiaries’ most recent audited balance sheet, income statement, statement of retained earnings, and statement of cash flows so long as they provide Colorado specific financial information;
  • A statement indicating the town or city, and any alternative town or city, in which the applying utility prefers any hearings be held;
  • Acknowledgment that, by signing the application, the applying utility understands that:
(A) The filing of the application does not by itself constitute approval of the application;
(B) If the application is granted, the applying utility shall not commence the requested action until the applying utility complies with applicable Commission rules and any conditions established by Commission order granting the application;
(C) If a hearing is held, the applying utility must present evidence at the hearing to establish its qualifications to undertake, and its right to undertake, the requested action; and
(D) In lieu of the statements contained in (A) through (C), an applying utility may include a statement that it has read, and agrees to abide by, the provisions of subparagraphs (b)(XI)(A) through (C).
  • An attestation which is made under penalty of perjury; which is signed by an officer, a partner, an owner, an employee of, an agent for, or an attorney for the applying utility, as appropriate, who is authorized to act on behalf of the applying utility; and which states that the contents of the application are true, accurate, and correct. The application shall contain the title and the complete address of the applicant (developer).

4 CCR 723-3-3002(a), Applications.

In addition to the requirements of specific rules, all applications must include the information listed (a)(I) through (V) of 4 CCR 723-3-1310. Applying utilities may either include the information in the application itself, or incorporate the information by reference to the miscellaneous docket created under rule CCR 723-3-1310.

4 CCR 723-3-3002(c), Applications.

An application for a CPCN to construct and to operate facilities or an extension of a facility must include, in the following order and specifically identify, the following information:

(I) The information required above.
(II) A statement of the facts (not conclusory statements) relied upon by the applying utility to show that the public convenience and necessity require the granting of the application or citation to any Commission decision that is relevant to the proposed facilities.
(III) A description of the proposed facilities to be constructed.
(IV) Estimated cost of the proposed facilities to be constructed. If the facility is a transmission facility, the estimated costs must be itemized as land costs, substation costs, and transmission line costs.
(V) Anticipated construction start date, construction period, and in-service date.
(VI) A map showing the general area or actual locations where facilities will be constructed, population centers, major highways, and county and state boundaries.
(VII) As applicable, electric one-line diagrams.
(VIII) As applicable, information on alternatives studied, costs for those alternatives, and criteria used to rank or eliminate alternatives.
(IX) As applicable, a report of prudent avoidance measures considered and justification for the measures selected to be implemented.
(X) For transmission construction or extension, the utility must also comply with rule 4 CCR 723-3-3206.

4 CCR 723-3-3102(b).

The developer should follow the filing instructions pursuant to 4 CCR 723-1-1204, Filing.

7-CO-c.5 to 7-CO-c.6 — Review Application Materials for Completeness

The Commission will review the application materials to ensure completeness. Within fifteen (15) days from the date a developer files an application, the Commission must provide notice of the application to any person, who in the opinion of the Commission, may be affected by the grant or denial of the application. 4 CCR 723-1-1206, Commission Notice. The notice must state:

  • The name and address of the applicant (developer);
  • The caption and proceeding number of the proceeding;
  • The date the application was filed;
  • A brief description of the purpose and scope of the application;
  • Whether the applicant (developer) has filed testimony and is seeking a Commission decision within 120 days, or has waived the time limits under CRS 40-6-109.5, Hearings on Applications;
  • The date by which any objection, notice of intervention as of right, motion to permissively intervene, testimony or any other document must be filed;
  • A statement that the Commission may consider the application without a hearing if:
    • no notice of intervention as of right or motion to permissively intervene is timely filed, or
    • no notice of intervention as of right or motion to permissively intervene requests a hearing and contests or opposes the application; and
  • A statement that any person who files an objection, notice of intervention as of right, motion to permissively intervene, testimony, or any other document must do so in accordance with the instruction set forth in the notice; and that the Commission may dismiss or strike any such document not filed in accordance with the instructions set for in the notice.

4 CCR 723-1-1206(b), Commission Notice.

7-CO-c.7 to 7-CO-c.8 — Will the Construction Lead to a Rate Change?

If the construction leads to a rate change for the public, then the developer should keep the following rules in mind:

According to CRS 40-3-104(1)(a), in the case of a public utility other than a rail carrier...no change shall be made by any public utility in any rate, fare, toll, rental, charge, or classification or in any rule, regulation, or contract relating to or affecting any rate, fare, toll, rental, charge, classification, or service or in any privilege or facility, except after thirty days' notice to the Commission and the public.

The developer must give notice to the Commission regarding the rate change. The developer must file and keep open for public inspection new schedules stating plainly the changes made in the schedules and the time when the changes will go into effect. CRS 40-3-104(1)(c). The developer must give the notice within seven (7) days after filing an application with the Commission. 4 CCR 723-3-3002(d), Applications.

For public utilities, additional notice is required prior to an increase or other change in any rate, ...classification, or service and may be made, at the option of the public utility, by any of the following methods:

  • Publication of a notice in each newspaper of general circulation in each county in which the public utility provides service;
  • Mailing of a notice to each affected customer of the public utility during the first twenty days of the thirty-day period prior to the effective date of the increase or change;
  • Inclusion of an insert in the bill mailed to each affected customer of the public utility during a regular billing cycle not later than the twentieth day of the thirty-day period prior to the effective date of the increase or change; or
  • Upon application by the public utility, such other manner as the commission may prescribe.

CRS 40-3-104(1)(c).

7-CO-c.9 — Submit Public Comment

The Commission may accept oral or written comments from the public concerning any proceeding. 4 CCR 723-1-1509(a), Public, Academic, or Policy Comments.

7-CO-c.10 — Did the Commission Approve the CPCN?

The Commission must respond, in writing, to permit applications within a reasonable time. The period may not exceed sixty (60) days. If the Commission needs additional information from the applicant (developer) to make a decision, the Commission must set a reasonable time for response following the receipt of the additional information. CRS 24-65.1-108(1).

In addition, when the Commission denies a permit, the denial must specify:

  • The regulations, guidelines, and criteria or standards used in evaluating the application;
  • The reasons for denial and the regulations, guidelines, and criteria or standards the application fails to satisfy; and
  • The action that the applicant (developer) would have to take to satisfy the state agency's or commission's permit requirements.

CRS 24-65.1-108(2).

7-CO-c.11 — CPCN

The developer must comply with the terms and conditions of the CPCN as the Commission may designate. CRS 40-5-103, Certificate-Application for-Issuance.

7-CO-c.12 — Petition for Rehearing, Reargument, or Reconsideration (If Applicable)

Any party may file an application for Rehearing, Reargument or Reconsideration (RRR) of any Commission decision or of any recommended decisions that becomes a Commission decision by operation of law. 4 CCR 723-1-1506(a), Rehearing, Reargument, or Reconsideration.

No response to an application for RRR may be filed, except upon motion. Any motion for leave to file a response must demonstrate a material misrepresentation of a fact in the record; an incorrect statement or error of law; an attempt to introduce facts not in evidence; accident or surprise, which ordinary prudence could not have guarded against; or newly discovered facts or issues material for the moving party which that party could not, with reasonable diligence, have discovered prior to the time the application for RRR was filed. 4 CCR 723-1-1506(b), Rehearing, Reargument, or Reconsideration.

The Commission may waive or shorten response time to a motion requesting leave to file a response to an application for RRR upon the motion of a party or on its own motion if it is found that time is of the essence or the requested relief is unopposed. The Commission can act immediately after the grant of the waiver or the expiration of the shortened of response time. 4 CCR 723-1-1506(c), Rehearing, Reargument, or Reconsideration.

Any party must file an application for RRR, or a motion for an extension of time in which to file such an application, within twenty (20) days after the date of the Commission decision, or after the date on which a recommended decision by a hearing Commissioner or an Administrative Law Judge has become the decision of the Commission. A motion for extension of time based upon the unavailability of a transcript shall show that the transcript request was filed within seven (7) days of the date on which the Commission decision was mailed. 4 CCR 723-1-1506(d), Rehearing, Reargument, or Reconsideration.

An application for RRR does not stay the Commission’s decision unless the Commission orders a stay. If the Commission does not act upon an application for RRR within thirty (30) days of its filing, the application is denied and the Commission’s decision is final. 4 CCR 723-1-1506(e), Rehearing, Reargument, or Reconsideration.

7-CO-c.13 — Appeal (If Applicable)

Any party to the proceeding may appeal the Commission’s decision within thirty (30) days to the District Court. CRS 40-6-115(1), Review by District Court.




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References

  • Colorado Public Utility Commission Decision R08-0925
  • Colorado Public Utility Commission Decision R05-1224
  • Colorado Public Utility Commission Decision R09-0365

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