Colorado Certificate of Public Convenience and Necessity (8-CO-c)
The Colorado Public Utilities Commission (Commission) requires developers, which fall under the definition of “public utility” and “cooperative electrical associations” which choose not to be regulated as public utilities (CEAs), to apply for a Certificate of Public Convenience and Necessity (CPCN) for new construction and extension of transmission facilities in the state. 4 CCR 723-3-3206, Construction or Extension of Transmission Facilities.
“Public utility” is defined, in part, as “…every…electrical corporation…person or municipality 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…” CRS 40-1-103(1)(a)(I). The law defines “person” as “any individual, firm, partnership, corporation, company, association, joint stock association, and other legal entity.” CR.S 40-1-102(10). CEAs are utilities owned by the member-consumers they serve and regulated by those member-consumers, acting through an elected governing body. CRS 40-9.5-101.
CEAs that choose not to be regulated as public utilities will be exempt from the CPCN requirement if they meet certain criteria. The developer must comply with local government regulation regardless of whether a CPCN is required. C.R.S. 40-5-101(1)(b)(3).
Certificate of Public Convenience and Necessity Process
8-CO-c.1 - Notify Affected Local Governments of Project Plans
A developer falling under the definition of a public utility or CEA must not construct or install a new facility, plant, or system within the territorial boundaries of a local government unless the construction or installation complies with the local government's zoning rules, resolutions, or ordinances. CRS 40-5-101(1)(b)(3).
Pursuant to the above statute, a developer must notify the affected local government of its plans to site a major electrical facility within the jurisdiction of the local government. The developer must notify the local government prior to submitting the preliminary or final permit application, but in no event later than filing a request for a certificate of public convenience and necessity (CPCN) or the filing of any annual filing with the public utilities commission that proposes or recognizes the need for construction of a new facility or the extension of an existing facility. CRS 29-20-108(4)(a).
After receipt of notification, the developer must obtain the applicable permits from each affected local government. The developer may obtain these additional permits simultaneously with the proceedings for the CPCN. The Colorado Public Utilities Commission (Commission) may issue a CPCN without possession of all the local permits. See, Colorado - C.R.S. 40-5-101 - New Construction - Extension - Compliance with Local Zoning Rules.
8-CO-c.2 to 8-CO-c.4 - Will the Transmission Be Constructed by a Public Utility or a Cooperative Electrical Association?
Public utilities must request a CPCN for all projects the Commission considers not “in the ordinary course of business.” CEAs, under certain circumstances, will not need to request a CPCN from the Commission.
CEAs are exempt from the CPCN requirement if the association has elected to exempt itself from Public Utilities Law under C.R.S. 40-9.5-103 and the construction or extension is contained entirely within the CEA’s certificated area. 4 C.C.R. 723-3-3206.
8-CO-c.5 – Is the Project in the Ordinary Course of Business?
Public utilities and CEAs (which do not meet the above mentioned exemption requirements) must request a CPCN for new construction or extension of transmission facilities that are deemed by the Commission to not be “in the ordinary course of business.” 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.
For new construction, a CPCN is required for projects meeting the following criteria:
- Transmission facilities designed at 230Kv or above, even if initially operated at a lower voltage. However, a radial transmission line designed at 230Kv or above that serves a single retail customer and terminates at that customer’s premises will not require a CPCN application.
- Transmission facilities designed at 115Kv or 138Kv if the facilities do not meet the noise and magnetic field thresholds listed in 4 C.C.R. 723-3-3206(e) and (f) or the Commission determines that the facilities are not in the ordinary course of business. 4 C.C.R. 723-2-3206(b)(II).
For the extension of an existing facility, the developer must file a CPCN for projects meeting the following criteria:
- Modification to any existing transmission facility that results in the increase in the noise or magnetic field levels and such levels are above the thresholds listed in 4 C.C.R. 723-3-3206(e) and (f). 4 C.C.R. 723-3-3206(c)(1).
- Modification to any existing transmission facility so that it will be operated at a higher voltage, with or without conducter replacement, unless a CPCN has already been approved for the operation of the transmission facility at a higher voltage or unless the upgrade is to a voltage less than 230Kv and the noise and magnetic field thresholds listed in 4 C.C.R. 723-3-3206(e) and (f) are met. 4 C.C.R. 723-3-3206(c)(2).
8-CO-c.6 - Initiate CPCN Process
A developer must request a CPCN for all projects that are not in the ordinary course of business or projects that do not fall under the aforementioned CEA exemptions. For more information, see:
8-CO-c.7 and 8-CO-c.8 – Request Notification from the Commission that a CPCN Will Not Be Required
No public utility or cooperative electric association, which has voted to exempt itself pursuant to CRS 40-9.5-103 may commence new construction, or extension of transmission facilities or projects until either the Commission notifies the utility that such facilities or projects do not require a CPCN or the PUC issues a CPCN. 4 C.C.R. 723-3-3206(a)
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- Code of Colorado Regulations 4 CCR 723-3, Rules Regulating Electric Utilities
- Colorado – C.R.S. 40-1-103 - Public Utility Defined
- Colorado — C.R.S. 40-1-102 - Definitions
- Colorado - C.R.S. 40-9.5-101 - Cooperative Electrical Associations - Legislative Declaration
- Colorado - C.R.S. 40-5-101 - New Construction - Extension - Compliance with Local Zoning Rules
- Colorado - C.R.S. 29-20-108 - Local Government Regulation
- 4 C.C.R. 723-3-3206 - Construction or Extension of Transmission Facilities
- Colorado - C.R.S. 40-9.5-103 - Exemption from "Public Utilities Law"
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- Colorado Public Utility Commission Decision R09-0365
- Colorado Public Utility Commission Decision R08-0925
- Colorado Public Utility Commission Decision R05-1224
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