Colorado businesses and utilities say they will struggle to meet accelerated carbon reduction standards under a proposal that has yet to be officially introduced at the Capitol, arguing the state needs the time to “build out the framework thoughtfully” in order to avoid soaring costs.

The legislation — the sponsors are yet unknown — would require electric utilities to reduce greenhouse gas emissions by 95% compared to 2005 levels by 2035 and 100% by 2040. The Colorado Energy Office’s Greenhouse Gas Pollution Reduction Roadmap, created through legislation passed in 2019, requires utilities to reduce greenhouse gas pollution by 65% by 2035 and 100% by 2050, compared to 2005 levels.

The bill would also impose a 1.5% rate or cost impact cap on utilities and require the Public Utilities Commission to assess the “equity” impacts of all utilities’ emissions reduction plans and rules, including benefits to “disproportionately impacted communities.”

It’s not immediately clear what the 1.5% cap means, such as whether it’s designed to prohibit utilities from passing more than 1.5% of costs to consumers.

Some view the would-be legislation as representing yet another significant move to restructure the operations of utilities in order to achieve climate goals, even as companies maintain that meeting shorter-term requirements is already arduous. A separate bill, House Bill 1269, seeks to ease some of the requirements outlined in a 2021 law, which established the building performance program in the Colorado Energy Office.

Under Democratic control of the state Capitol, Colorado has ramped up efforts to quickly transition away from fossil-fired energy. Supporters argued the transition — while acknowledging it might be painful in the short term — positions Colorado for a more sustainable and energy-efficient future. They said it would help wean the country from dependence on foreign oil. Ultimately, they added, the transition toward green energy is good for the environment and people’s health.

Critics maintained the quick transition is failing to protect American consumers, particularly low-income residents, who already contend with soaring inflation, and that the singular focus on alternative energy is short-sighted, given that America is rich in all forms of energy and that nuclear power can provide the state with a viable, sustainable and “green” baseline. Critics also said the goals are unrealistic and forcing businesses to comply would be costly and counterproductive.

Late last month, several dozen utilities, labor unions and electric officials sent a letter to Democratic and Republican leaders in the state legislature, urging them not to grant the bill a late status.

“As a group, we have not historically agreed on all aspects of the energy transition and have often engaged in vigorous debate on what the best path forward is for our State’s energy future,” the groups said. “However, we come together to ask that you not grant late bill status for legislation that would preemptively advance the clean energy targets for the power sector forward a full decade, from 2050 to 2040 — not because we don’t think it may be possible to get there, but because we have to build out the framework thoughtfully, and with intention, to ensure that the energy transition doesn’t needlessly result in soaring energy costs.”

One of the letter’s signatories is Xcel Energy, the state’s largest utility company.

Tyler Smith, the company’s director of regional government affairs, said moving the goalposts up by a decade could decrease grid reliability and increase costs.

Those costs have already gone up by nearly 40% since 2019, according to Carly West of the Denver Metro Chamber of Commerce

“I would absolutely anticipate those costs to be passed on to consumers, and I don’t think it’s a reasonable proposition to tell one business that they have to incur a significant amount of costs to invest in something in a very rapid timeframe and then expect them to somehow be able to absorb these costs,” said West. “That’s not how a business can operate.”

The push to accelerate the carbon emissions goals is occurring amid a lot of uncertainty. Last month, economists warned that while the state isn’t expected to face a recession in the near future, residents may “increasingly” report feeling like they are experiencing one, “as certain sectors are expected to falter.”

In a statement, Xcel’s Smith said the company supports legislation that “improves the economic development for the region and the state.”

“We are working with the Colorado Public Utilities Commission and our Colorado communities on a just transition designed to minimize impacts of the changing energy landscape,” Smith said. “We are always committed to and working with lawmakers and stakeholders to ensure we make progress on company and state carbon reduction goals.”

Meghan Dollar of the Colorado Chamber of Commerce said many of the organization’s members from the utility sector expressed frustration they hadn’t been more involved in crafting the proposal.

“When you are kind of changing those (goals) with very little input from the entities that have to implement it, that’s really problematic,” she said.

Businesses are also worried about the timing of the bill’s introduction. Bringing forward such an extensive piece of policy — the latest draft is more than 60 pages long — with just over a month left in the session doesn’t leave much time for serious discussion about its implications, said West.

“It’s certainly not a lack of commitment or work to get there, but 10 years is a pretty quick escalation, especially when we’re sitting here in 2025 talking about a shift to 2040 instead of 2050,” she said. “That’s a really significant shift in timeline.”

According to Dollar, the Colorado Energy Office sent an email stating it might be drafting the bill shortly, meaning it had received late bill permission from legislative leadership.

West said the Colordo Energy Office’s greenhouse gas emissions goals are already quite ambitious and that utilities are doing their best to ensure they’re on track to meet them by the required deadlines.

“When we look at what it would take to bump those deadlines up by a decade and make them happen faster, I think that raises a lot of questions about what is the actual path to doing that,” she said.

Certain technologies created to reduce greenhouse gas emissions are new, West noted, adding they will require some time before they can be implemented successfully.

“There’s questions about first-generation technology — not just how much it costs, but if it’s really ready to be deployed on that kind of scale,” she said.

West said businesses are worried about the economy: “This is an extraordinarily bad time, I would say, to increase costs on something that is already on track to deliver the results that we’re looking for in terms of emissions reductions, but in a more feasible timeframe.”