On Thursday, March 12, 2026, Independence Institute Energy Policy Analyst Sarah Montalbano testified in favor of consumer-regulated electric utilities (CREUs) in the Colorado House Energy & Environment Committee. The bill would allow the development of CREUs, which serve new large electricity loads through systems that are physically islanded from the existing grid. These projects would serve new industrial or commercial customers that were not previously served by a retail electric provider, such as data centers. Because the systems are physically separated from the existing grid, ratepayers would be insulated from potential rate impacts.
The committee also heard testimony from Travis Fisher of the Cato Institute, who has developed the concept in collaboration with Glen Lyons, founder of Advocates for Consumer-Regulated Electricity. The bill was “laid over,” meaning that consideration of the bill will resume at a later date and time.
You can listen to the audio of the committee hearing here (Sarah’s testimony starts at 4:08:24) or read the transcript below:
Mr. Chair and members of the Committee,
Thank you for the opportunity to testify. My name is Sarah Montalbano, and I’m an energy policy analyst with the Independence Institute, a 501(c)(3) free market think tank based in Denver.
Colorado’s electricity system was built for a world of slow, predictable demand growth. For decades, that model worked, more or-less. But Colorado’s electricity demand is accelerating, with artificial intelligence, electrification mandates, and advanced manufacturing creating large, concentrated loads that did not exist five years ago. The traditional planning process was not designed to absorb this demand on this timeline.
House Bill 26-1246 offers one tool to address this challenge.
The bill authorizes the development of consumer-regulated electric utilities, which are privately financed, physically islanded systems that serve new large commercial and industrial loads not previously on the grid under voluntary contracts. Because these systems are separate from the regulated grid, they would not directly impose cost or reliability burdens on existing utility customers. The existing grid would continue to serve homes and businesses as it does today.
From a policy standpoint, this framework does several things at once. It allows private capital to finance new infrastructure without the possibility of shifting costs to existing ratepayers. It may allow a faster path to deployment for projects that the current utility planning and interconnection processes cannot accommodate on commercially viable timelines. And it would generate real-world data about how market-driven electricity systems perform in terms of cost, reliability, and environmental outcomes.
None of this comes at the expense of Colorado’s existing environmental or safety obligations. Projects developed under this framework remain subject to all applicable permitting, land use, construction, safety, and environmental requirements at every level of government.
In short, House Bill 26-1246 does not replace Colorado’s existing electricity system. Instead, it opens a second track for serving certain new large electricity loads while allowing the existing system to continue focusing on affordability and reliability for current customers.
For those reasons, the Independence Institute believes HB26-1246 is a policy option worthy of serious consideration by the committee and the larger Assembly.
Thank you for the opportunity to testify.
Sarah Montalbano
Energy Policy Analyst
Independence Institute
