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Colorado could stop utility ratepayers from subsidizing the cost of extending service

JUANA SUMMERS, HOST:

You may not notice it when you pay your utility bill for gas, but for some, those bills have a hidden fossil fuel subsidy. It helps pay to link new homes to the natural gas system. And that is something climate scientists worry could lock in decades of climate-warming emissions. California recently scrapped these incentives, and now Colorado is considering a similar move. Colorado Public Radio's Sam Brasch reports.

STEPHEN MYERS: Thank you so much for showing up for a tour.

SAM BRASCH, BYLINE: About a dozen people are packed into a trailer at a construction site in Fort Collins, Colo. They grab hardhats, along with free coffee and doughnuts, to tour a brand-new neighborhood.

S MYERS: It's a very thoughtfully and intentionally designed community.

BRASCH: Stephen Myers is the CEO of Thrive Home Builders, which sells all-electric homes with zero need for natural gas.

S MYERS: Whether it's cooking, whether it's heating, cooling - everything in that home is going to run off of electricity.

BRASCH: We walk out of the trailer. Concrete foundations stretch towards the Rocky Mountain Foothills, some topped with wood frames and roofs. Climate groups love electric homes because they can draw their power from clean energy sources like wind and solar. And they have a plan to nudge developers to build more of them. In the first house, I break that plan down for Beth and Lee Zimmerman, who are shopping for a new home.

LEE ZIMMERMAN: So we retired a year ago. We moved to Fort Collins to be closer to our grandchildren.

BRASCH: OK. So let me tell you what my story is about.

This takes a second to explain, so bear with me. Like a lot of people, I get a gas bill. It includes what I pay for energy then all these little, like, fees and charges. Part of that money finances a discount to connect new homes to the gas system. Colorado regulators have proposed becoming the second state to ditch those subsidies, after California.

(SOUNDBITE OF CONSTRUCTION EQUIPMENT MOVING)

BRASCH: The Zimmermans - they like the idea of pushing more developers to skip natural gas.

BETH ZIMMERMAN: With global warming, climate change, we need to, you know, be careful of, you know, how we proceed with future builds. And I think this company addresses that quite nicely.

BRASCH: But some big utilities are cautious. Robert Kenney leads Xcel Energy, Colorado, the state's largest gas and power company. He says natural gas, it isn't going away.

ROBERT KENNEY: Our customers are still demanding it and still want it. People use it for cooking. It's also consistent with spurring economic development.

BRASCH: Xcel Energy has joined homebuilders to defend the subsidy. Kenney insists that doesn't conflict with his company's ambitious climate goals. That's because it's investing in green technologies like mixing hydrogen into the gas supply. On that point, climate advocates are skeptical.

KIKI VELEZ: We know that the most cost-effective way to eliminate emissions from buildings is through investing in efficient, all-electric appliances.

BRASCH: Kiki Velez is a green building advocate for the Natural Resources Defense Council. She says the subsidy is a terrible climate policy and adds to skyrocketing energy bills.

VELEZ: It's bad for customers. It's costing them money. And it's also completely contradictory to our climate goals.

BRASCH: California estimates eliminating the subsidy will save ratepayers there more than $160 million each year. Colorado gas customers could save more than 10 million annually if regulators go through with their proposal later this month.

(CROSSTALK)

BRASCH: Back in the trailer, I check in with Gene Myers, the chief sustainability officer for Thrive Home Builders. He doesn't have a prediction on the upcoming decision.

GENE MYERS: I don't know what happens in the next few months with the PUC, but I think long term, the building industry is almost 40% of emissions. And so to me, it's inevitable.

BRASCH: New York City and Berkeley, Calif., have already banned new gas hookups. He expects that trend will grow, and he thinks his company should learn to build all-electric homes now before it's required.

For NPR News, I'm Sam Brasch in Denver. Transcript provided by NPR, Copyright NPR.