Gov. Jared Polis is cautioning Colorado’s energy leaders that electrification efforts could lead to rate increases if they aren’t managed carefully. 

In a letter sent to a number of organizations, including the Colorado Public Utilities Commission, the Office of Economic Development and International Trade (OEDIT), and the Colorado Energy Office, Polis called for an “all-of-government approach” to electrification in Colorado, “emphasizing the opportunity to put downward pressure on electricity rates, support clean energy, and further economic success.”

While electrification can save households hundreds of dollars per year on utilities, it also has the potential to increase rates, if not managed well, the governor said.

“Other states that have not carefully managed the electrification transition are seeing large increases in utility rates,” he said, noting that California has seen utilities rates more than double in the last decade due to what he described as poor management of its electrification transition. 

“If done well, these efforts can continue to incentivize economic growth and investment in Colorado, and provide more transparency and regulatory certainty for everyone living and doing business in Colorado,” he said. 

Polis advocated for siting large new loads near retiring coal plants or other economically disadvantaged areas to create new jobs and increase economic growth. This approach would also allow the state to take advantage of tax credits from the Inflation Reduction Act, which incentivizes new energy generation tied to retiring coal plants.

Polis also suggested that utility companies could help cover some of the costs associated with the transition. 

“There is an opportunity in Colorado to invest a few millions or tens of millions (which could potentially be supported in part by the regulated utility system) in ways that could allow the state to better plan for and shape billions or tens of billions of dollars of new loads and utility investment to lower rates for all customers, fund a more optimal build-out of our energy infrastructure, and support economic development where it can have the largest impact,” he said.  

According to Polis, the state’s electric utilities are on track to reduce greenhouse gas emissions from power generation by over 80% by the end of the decade.