Colorado Natural Gas, Inc. v. Public Utilities Commission of the State of Colorado

A company that provides retail gas utility service to residential and commercial customers in five service territories in Colorado filed a lawsuit in Colorado District Court challenging the lawfulness of the Colorado Public Utilities Commission’s decision permanently suspending the utility’s tariff sheets for failing to implement a statutory requirement that new gas utility customers not receive an incentive for new gas infrastructure. The Commission concluded that the statute prohibited construction allowances both for service line extensions and also for distribution main extensions. The utility argued that the best reading of the statute would not prohibit allowances for distribution main extensions and that the Commission’s interpretation raised concerns under the Takings and Contracts Clauses of the U.S. and Colorado Constitutions. Regarding the Contracts Clauses, the utility argued that under the Commission’s interpretation, the statute would not be “appropriately tailored to its purpose of bringing about a renewable energy transition given the state’s current energy mix for electric production” and that it was not reasonable “to impose the burdens of addressing climate change on a few gas utilities by depriving them of the benefits of existing contracts.”