Electrical Generation & Distribution Resiliency

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1124 LLS NO. 26-0307.02 Jery Payne x2157 HOUSE SPONSORSHIP DeGraaf, SENATE SPONSORSHIP (None), House Committees Senate Committees Energy & Environment A BILL FOR AN ACT CONCERNING THE RESILIENCY OF THE SYSTEMS THAT PROVIDE ELECTRICITY.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) The bill creates the Colorado electric grid resiliency task force (task force) to study the issue of grid resilience and to make recommendations to the governor and the general assembly. The task force is 18 members. The president of the senate and the speaker of the house of representatives shall organize and call the first meeting of the task force Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

by November 28, 2026. The task force meets at least once every month until it completes its duties, but the chair may call additional meetings. Upon request by the task force, the department of regulatory agencies shall provide office space, equipment, and staff services as necessary. The task force has the following duties on a biennial basis: ! Doing a rigorous, uniform engineering assessment of every covered transformer in Colorado; ! Developing a prioritized statewide hardening and spare-transformer plan with cost estimates, cost-benefit analyses, and recommended funding mechanisms; ! Recommending rules, legislation, and interstate or federal cost-sharing arrangements and publishing a report detailing these recommendations; and ! Reporting its findings to the house of representatives energy and environment committee and the senate transportation and energy committee. The bill sets minimum technical standards for the assessment, plan, and recommendations. A transmission-owning entity must participate in the task force assessment and provide any requested data. These entities may recover reasonable and prudent costs incurred to comply with the bill through rates, member assessments, or ordinary budgeting processes. Owners or operators of covered transformers are required to file with the federal energy regulatory commission a report, marked as "Critical Energy/Electric Infrastructure Information". Standards are set for the report. Biennially, the public utilities commission must prepare a summary of the report and present it to the house of representatives energy and environment committee and the senate transportation and energy committee. The public utilities commission must adopt rules requiring implementation of the highest-priority hardware-based mitigation measures identified by the task force unless equivalent protection is demonstrated. The task force repeals on September 1, 2031. Before the repeal, it is scheduled for review under the sunset law.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly finds and declares that:

(a) Colorado's electric grid is vulnerable to severe space weather events and to the late-time component of a high-altitude electromagnetic pulse;

(b) Geomagnetically induced currents entering the grid through grounded transformer neutrals can cause half-cycle saturation, excessive reactive power consumption, harmonic distortion, and catastrophic failure of extra-high-voltage transformers that require 3 to 6 years or longer to replace;

(c) Not all transmission-owning entities in Colorado are subject to the jurisdiction of the public utilities commission; (d) A coordinated, statewide approach that includes investor-owned utilities, rural electric cooperatives and their wholesale providers, administrations is essential;

municipal utilities, and federal power marketing

(e) In 2013, President Barack Obama recognized the electric grid as one of the nation's most vital critical infrastructure sectors in presidential policy directive 21 and executive order 13636, declaring that its incapacity or destruction "would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters", thereby establishing grid resiliency as an urgent, bipartisan national priority; and

(f) Targeted, hardware-based hardening represents a prudent, cost-effective insurance policy against potentially catastrophic blackouts.

SECTION 2. In Colorado Revised Statutes, add article 44 to title 40 as follows:

ARTICLE 44 Electric Grid Resiliency

40-44-101. Definitions.

(1) "COMMISSION" MEANS THE PUBLIC UTILITIES COMMISSION.

(2) "COVERED ENTITY" MEANS A PERSON THAT OWNS OR OPERATES A COVERED TRANSFORMER.

(3) "COVERED TRANSFORMER" MEANS A POWER TRANSFORMER OR GENERATOR STEP-UP TRANSFORMER WITH A HIGH-SIDE OPERATING VOLTAGE OF ONE HUNDRED KILOVOLTS OR MORE AND A NAMEPLATE RATING OF TWENTY-FIVE MILLION VOLT-AMPERES OR MORE LOCATED IN COLORADO OR SERVING COLORADO LOAD.

(4) (a) "HARDWARE-BASED MITIGATION" MEANS THE USE OF ADVANCED SYSTEMS, DEVICES, AND MATERIALS IN HARDWARE TO ENHANCE THE RESILIENCE AND RELIABILITY OF ELECTRIC GRID COMPONENTS.

(b) "HARDWARE-BASED MITIGATION" INCLUDES THE DEVELOPMENT OF TRANSFORMER RESILIENCE, SOLID-STATE POWER SUBSTATIONS, AND MICROGRIDS.

"TASK FORCE" MEANS THE COLORADO ELECTRIC GRID RESILIENCY TASK FORCE CREATED IN SECTION 40-44-102.

(6) (a) "TRANSMISSION-OWNING ENTITY" MEANS A PERSON THAT OWNS, OPERATES, OR CONTROLS COVERED TRANSFORMERS.

(b) "TRANSMISSION-OWNING ENTITY" INCLUDES INVESTOR-OWNED UTILITIES, COOPERATIVE ELECTRIC ASSOCIATIONS, MUNICIPALLY OWNED UTILITIES, WHOLESALE GENERATION AND TRANSMISSION PROVIDERS, AND FEDERAL POWER MARKETING ADMINISTRATIONS.

Colorado electric grid resiliency task force - creation - membership.

(1) Creation and duration. THE COLORADO ELECTRIC GRID RESILIENCY TASK FORCE IS CREATED TO STUDY THE ISSUE OF GRID RESILIENCE AND TO MAKE RECOMMENDATIONS TO THE GOVERNOR AND THE GENERAL ASSEMBLY.

(2) Membership. THE TASK FORCE CONSISTS OF THE FOLLOWING EIGHTEEN MEMBERS:

(a) (I) (A) FOUR LEGISLATIVE MEMBERS, APPOINTED BY THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, WITH TWO MEMBERS FROM EACH CHAMBER AND TWO MEMBERS FROM EACH MAJOR POLITICAL PARTY, AS DEFINED IN SECTION (B) THE DIRECTOR OF THE COLORADO RESILIENCY OFFICE ESTABLISHED IN SECTION 24-32-121 WITHIN THE DEPARTMENT OF LOCAL AFFAIRS, OR THE DIRECTOR'S DESIGNEE;

(C) THE DIRECTOR OF THE DIVISION OF HOMELAND SECURITY AND EMERGENCY MANAGEMENT CREATED IN SECTION 24-33.5-1603 WITHIN THE DEPARTMENT OF PUBLIC SAFETY, OR THE DIRECTOR'S DESIGNEE; AND (D) THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REGULATORY AGENCIES, OR THE EXECUTIVE DIRECTOR'S DESIGNEE.

(II) THE MEMBERS APPOINTED PURSUANT TO SUBSECTIONS (2)(a)(I)(A) TO (2)(a)(I)(D) OF THIS SECTION CONSTITUTE A PANEL THAT SHALL APPOINT BY MAJORITY VOTE:

(A) TWO REPRESENTATIVES OF INVESTOR-OWNED UTILITIES;

(B) TWO REPRESENTATIVES OF RURAL ELECTRIC COOPERATIVES OR RURAL ELECTRIC WHOLESALE PROVIDERS;

(C) TWO REPRESENTATIVES OF MUNICIPALLY OWNED ELECTRIC UTILITIES, EITHER A SINGLE UTILITY OR JOINT ACTION AGENCIES CREATED BY MULTIPLE MUNICIPALLY OWNED ELECTRIC UTILITIES;

(D) ONE REPRESENTATIVE OF A MULTISTATE GENERATION AND TRANSMISSION ASSOCIATION;

(E) ONE MEMBER WITH TECHNICAL EXPERTISE IN ENGINEERING RELATED TO GEOMAGNETICALLY INDUCED CURRENTS AND HIGH-ALTITUDE ELECTROMAGNETIC PULSES;

(F) ONE MEMBER WITH TECHNICAL EXPERTISE IN TRANSMISSION PLANNING; AND

(G) ONE REPRESENTATIVE OF LARGE INDUSTRIAL POWER USERS.

(III) A UTILITY OR AN ASSOCIATION OF UTILITIES MAY NOMINATE INDIVIDUALS DESCRIBED IN SUBSECTIONS (2)(a)(II)(A) TO (2)(a)(II)(G) OF THIS SECTION TO THE PANEL DESCRIBED IN THE INTRODUCTORY PORTION OF SUBSECTION (2)(a)(II) OF THIS SECTION.

(b) THE CHIEF EXECUTIVE OFFICER OF THE WESTERN AREA POWER ADMINISTRATION WITHIN THE UNITED STATES DEPARTMENT OF ENERGY, OR THE CHIEF EXECUTIVE OFFICER'S DESIGNEE.

(3) Appointment authority - terms.

(a) (I) THE APPOINTING AUTHORITIES DESCRIBED IN SUBSECTION (2)(a)(I)(A) OF THIS SECTION SHALL MAKE THEIR INITIAL APPOINTMENTS TO THE TASK FORCE NO LATER THAN SEPTEMBER 12, 2026. THE MEMBERS APPOINTED UNDER SUBSECTION (2)(a)(I)(A) OF THIS SECTION SERVE A TERM OF TWO YEARS. THE MEMBERS APPOINTED UNDER SUBSECTION (2)(a)(II) OF THIS SECTION SERVE A TERM OF FOUR YEARS.

(II) THE PANEL DESCRIBED IN SUBSECTION (2)(a)(II) OF THIS SECTION SHALL MAKE ITS INITIAL APPOINTMENTS TO THE TASK FORCE NO LATER THAN OCTOBER 30, 2026.

(b) EACH MEMBER OF THE TASK FORCE WHO IS APPOINTED UNDER SUBSECTION (2) OF THIS SECTION SERVES AT THE PLEASURE OF THE APPOINTING OFFICIAL. IF A TASK FORCE MEMBER IS REMOVED BY THE APPOINTING AUTHORITY OR RESIGNS, THE APPOINTING AUTHORITY SHALL APPOINT ANOTHER MEMBER TO FILL THE VACANCY WITHIN FORTY-EIGHT DAYS FOLLOWING THE REMOVAL.

(4) Remuneration.

(a) NOTWITHSTANDING SECTION 2-2-326, EACH LEGISLATIVE MEMBER OF THE TASK FORCE SERVES WITHOUT COMPENSATION BUT IS ENTITLED TO RECEIVE REIMBURSEMENT FOR ACTUAL AND NECESSARY EXPENSES INCURRED IN THE PERFORMANCE OF THE MEMBER'S DUTIES ON THE TASK FORCE.

(b) THE NONLEGISLATIVE MEMBERS OF THE TASK FORCE SERVE WITHOUT COMPENSATION AND WITHOUT REIMBURSEMENT FOR EXPENSES;

EXCEPT THAT A TASK FORCE MEMBER WHO IS A STATE EMPLOYEE MAY BE PAID IN ACCORDANCE WITH THE STATE EMPLOYEE'S NORMAL PAY.

(5) Meetings.

(a) THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES SHALL ORGANIZE AND CALL THE FIRST MEETING OF THE TASK FORCE BY NOVEMBER 28, 2026.

(b) THE TASK FORCE SHALL ELECT A CHAIR FROM AMONG ITS MEMBERS.

(c) THE TASK FORCE SHALL MEET AT LEAST ONCE EVERY MONTH UNTIL IT COMPLETES ITS DUTIES DESCRIBED IN SECTION 40-44-103. THE CHAIR MAY CALL SUCH ADDITIONAL MEETINGS AS ARE NECESSARY FOR THE TASK FORCE TO COMPLETE ITS DUTIES.

(6) Department of regulatory agencies support. UPON REQUEST BY THE TASK FORCE, THE DEPARTMENT OF REGULATORY AGENCIES SHALL PROVIDE OFFICE SPACE, EQUIPMENT, AND STAFF SERVICES AS MAY BE NECESSARY TO IMPLEMENT THIS ARTICLE 44.

40-44-103. Task force duties.

(1) Duties. THE TASK FORCE SHALL:

(a) ON OR BEFORE JULY 1, 2028, AND JULY 1 OF EACH EVEN-NUMBERED YEAR THEREAFTER, COMPLETE OR CAUSE TO BE COMPLETED A RIGOROUS, UNIFORM ENGINEERING ASSESSMENT OF EVERY COVERED TRANSFORMER IN COLORADO;

(b) ON OR BEFORE JULY 1, 2028, AND JULY 1 OF EACH EVEN-NUMBERED YEAR THEREAFTER, DEVELOP A PRIORITIZED STATEWIDE HARDENING AND SPARE-TRANSFORMER PLAN WITH COST ESTIMATES, COST-BENEFIT ANALYSES, AND RECOMMENDED FUNDING MECHANISMS;

(c) RECOMMEND RULES, LEGISLATION, AND INTERSTATE OR FEDERAL COST-SHARING ARRANGEMENTS;

(d) ON OR BEFORE NOVEMBER 15, 2028, AND NOVEMBER 15 OF EACH EVEN-NUMBERED YEAR THEREAFTER, PUBLISH A REPORT DETAILING ITS RECOMMENDATIONS CONCERNING CHANGING OR PROPOSING NEW RULES, LEGISLATION, OR INTERSTATE OR FEDERAL COST-SHARING ARRANGEMENTS; AND (e) NOTWITHSTANDING SECTION 24-1-136 (11)(a)(I), ON OR BEFORE FEBRUARY 1, 2029, AND FEBRUARY 1 OF EACH ODD-NUMBERED YEAR THEREAFTER, REPORT ITS FINDINGS DETAILED IN THE REPORT PUBLISHED IN ACCORDANCE WITH SUBSECTION (1)(d) OF THIS SECTION TO THE HOUSE OF REPRESENTATIVES ENERGY AND ENVIRONMENT COMMITTEE AND THE SENATE TRANSPORTATION AND ENERGY COMMITTEE, OR THEIR SUCCESSOR COMMITTEES.

(2) Minimum technical standards. IN COMPLETING THE DUTIES DETAILED IN SUBSECTION (1) OF THIS SECTION, THE TASK FORCE MUST:

(a) USE THE LATE-TIME (E3) HIGH-ALTITUDE ELECTROMAGNETIC PULSE WAVEFORM AND PARAMETERS SPECIFIED IN FIGURE A.5 OF I NTERNATIONAL E LECTROTECHNICAL C OMMISSION 61000-2-9:2025, WITH A PEAK ELECTRIC FIELD OF EIGHTY-FIVE VOLTS PER KILOMETER AND A PEAK MAGNETIC FIELD OF TWENTY THOUSAND NANOTESLAS FOR TYPICAL LOW-CONDUCTIVITY GROUND;

STANDARD

(b) MODEL OPERATING CONDITIONS AT FULL RATED LOAD AT THE TIME OF EXPOSURE;

(c) APPLY AGE AND CONDITION DE-RATING PURSUANT TO INSTITUTE OF ELECTRICAL AND ELECTRONICS ENGINEERS STANDARD C57.91-2011 AND C57.110-2018;

(d) INCORPORATE SITE-SPECIFIC OR BEST-AVAILABLE REGIONAL GROUND CONDUCTIVITY MODELS; AND

(e) QUANTIFY, FOR EACH COVERED TRANSFORMER, SUSCEPTIBILITY TO HALF-CYCLE SATURATION, GEOMAGNETICALLY-INDUCED-CURRENT DRIVEN HARMONICS, REACTIVE POWER ABSORPTION, AND HOT-SPOT HEATING OR INSULATION DEGRADATION.

40-44-104. Mandatory participation and cost recovery.

(1) A TRANSMISSION-OWNING ENTITY SHALL PARTICIPATE IN THE TASK FORCE ASSESSMENT DESCRIBED IN SECTION 40-44-103 AND PROVIDE ANY REQUESTED DATA.

(2) REASONABLE AND PRUDENT COSTS INCURRED TO COMPLY WITH THIS ARTICLE 44 OR RULES ADOPTED UNDER THIS ARTICLE 44 ARE RECOVERABLE THROUGH RATES, MEMBER ASSESSMENTS, OR ORDINARY BUDGETING PROCESSES.

40-44-105. Reporting.

(1) ON OR BEFORE DECEMBER 31, 2027, AND DECEMBER 31 OF EACH ODD-NUMBERED YEAR THEREAFTER, A COVERED ENTITY SHALL FILE WITH THE FEDERAL ENERGY REGULATORY COMMISSION A REPORT, MARKED INFORMATION", CONTAINING:

AS "C RITICAL E NERGY /E LECTRIC I NFRASTRUCTURE

(a) TRANSFORMER SPECIFICATIONS AND INFORMATION, INCLUDING:

(I) TRANSFORMER MANUFACTURERS;

(II) COUNTRY AND DATE OF MANUFACTURE;

(III) DATE ENERGIZED;

(IV) GENERAL LOCATION AND FUNCTION;

(V) DETAILED DESIGN DATA, INCLUDING CORE TYPE, WINDING CONFIGURATION, RESISTANCE, AND SINGLE-PHASE OR THREE-PHASE POWER; AND MEASURED OR CALCULATED DIRECT CURRENT

(VI) MEGAVOLT-AMPERES RATING AND VOLTAGE RATIO;

(b) SUSCEPTIBILITY FINDINGS AS DESCRIBED IN SECTION 40-44-103 (2)(e);

(c) ESTIMATED REPLACEMENT COST AND LEAD TIME;

(d) RECOMMENDED MITIGATION MEASURES AND COST ESTIMATES, TO INCLUDE:

(I) EXPLICIT CATEGORIZATION OF OPTIONS BY COST TIER AND EFFECTIVENESS, WITH A PREFERENCE FOR HARDWARE UPGRADES OVER DEPLOYING SPARE HARDWARE;

(II) INTERSTATE COST-SHARING OPTIONS; AND

(III) COST-BENEFIT ANALYSES OF MITIGATION STRATEGIES;

(e) A PRIORITIZED LIST FOR HARDENING OR SPARE PROCUREMENT FOCUSED MITIGATION, BUT REACTIVE OPERATIONAL PROCEDURES ALONE ARE NOT SUFFICIENT PROTECTION UNDER THIS SUBSECTION (1)(e), WITH BLOCKING OR SIGNIFICANTLY REDUCING GEOMAGNETICALLY INDUCED CURRENTS FLOW AS THE PRIMARY FOCUS; AND ON AUTOMATIC, NONPROCEDURAL HARDWARE-BASED

(f) RECOMMENDED FUNDING MECHANISMS, INCLUDING FEDERAL GRANTS AND RATE RECOVERY.

NOTWITHSTANDING SECTION 24-1-136 (11)(a)(I), ON OR BEFORE FEBRUARY 1, 2029, AND FEBRUARY 1 OF EACH ODD-NUMBERED YEAR THEREAFTER, THE COMMISSION SHALL PREPARE A SUMMARY OF THE REPORTS DESCRIBED IN SUBSECTION (1) OF THIS SECTION AND PRESENT IT TO THE HOUSE OF REPRESENTATIVES ENERGY AND ENVIRONMENT COMMITTEE AND THE SENATE TRANSPORTATION AND ENERGY COMMITTEE, OR THEIR SUCCESSOR COMMITTEES.

40-44-106. Sunset review - repeal.

SECTIONS 40-44-102 TO 40-44-105 ARE REPEALED, EFFECTIVE SEPTEMBER 1, 2031. BEFORE THE REPEAL, SECTIONS 40-44-102 TO 40-44-104 ARE SCHEDULED FOR REVIEW IN ACCORDANCE WITH SECTION

40-44-107. Rules.

ON OR BEFORE JULY 1, 2029, THE COMMISSION SHALL ADOPT RULES APPLICABLE IMPLEMENTATION MITIGATION MEASURES IDENTIFIED BY THE TASK FORCE UNLESS EQUIVALENT PROTECTION IS DEMONSTRATED.

TO ENTITIES OF THE UNDER ITS JURISDICTION HIGHEST-PRIORITY REQUIRING HARDWARE-BASED

SECTION 3. In Colorado Revised Statutes, 2-3-1203, add (22)(a)(IX) as follows: 2-3-1203. Sunset review of advisory committees - legislative declaration - definition - repeal. (22) (a) The following statutory authorizations for the designated advisory committees will repeal on September 1, 2031: (IX) THE COLORADO ELECTRIC GRID RESILIENCY TASK FORCE CREATED IN SECTION 40-44-102.

SECTION 4. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.