Colorado’s legislature rarely offers energy bills worthy of praise. Senate Bill 26-142, which passed the Senate on Wednesday and now heads to the House, is half of an exception for geothermal energy.
Geothermal energy harnesses heat from underground to generate electricity and provide heating and cooling. Unlike wind and solar, it’s dispatchable and carbon-free, which makes geothermal better suited than wind and solar to fulfill Colorado’s 100% clean energy by 2050 mandate. Colorado sits on some of the best geothermal resources in the country and technological advances are opening new sites. On the federal side, the Bureau of Land Management just approved a categorical exclusion to streamline permitting of geothermal exploration on public lands.
In its coverage of the bill, CPR News describes it as “reducing red tape, encouraging new projects, and making geological data publicly available.” On red tape, the bill’s legislative declaration is unusually self-aware: “Existing law does not prohibit municipalities from operating thermal energy networks” or “industrial facilities from selling recovered waste heat,” but that “the absence of express statutory authority” imposes “unnecessary soft costs on every entity that attempts to conduct those activities, including legal fees, financial risk premiums, and extended project timelines.”
The bill provides clear legal authority for local governments to contract with private operators to build and run thermal energy networks for up to 25 years, issue revenue bonds, and serve customers across jurisdictional lines — none of it subject to PUC regulation. Any pathway that allows private capital and local decision-making to develop energy infrastructure without filtering it through the PUC’s planning process is a pathway worth having.
Under the bill, the Colorado Energy and Carbon Management Commission and the Colorado Geological Survey would collect subsurface temperature data from orphaned wells, marginal wells, monitoring wells, and, only with operator consent, active oil and gas wells. Funding would be contingent on available appropriations or voluntary gifts, grants, and donations, and the resulting data would be publicly available in a searchable format.
Here’s the unfortunate catch: Section 10 requires (not simply allows) investor-owned utilities to solicit proposals for geothermal projects and, if they receive any bids at all, submit applications to the PUC. The PUC evaluates these proposals not on cost-competitiveness alone but on whether they advance “state energy policy goals,” including “the need for clean firm generation resources to make progress toward the economy-wide goal of net-zero emissions by 2050.” The large-scale track is at least limited to one application, capped at 300 MW of nameplate capacity. The small-scale track has no equivalent limits.
It’s better in some ways than the introduced version, which had a minimum purchase requirement from “community geothermal gardens.” But if red tape is what ails geothermal energy in Colorado, the prescription should be clearing the “red tape” and letting the market decide, not forcing utilities into a costly solicitation process for a technology the legislature favors.
CPR News also errs in its coverage, as it states that the bill is needed “as the clock ticks down to the state’s 100% renewable energy by 2040 goal.” The binding statutory target is 100% clean energy by 2050, not 2040. The 2040 figure is Governor Polis’s executive roadmap aspiration, which the legislature declined to codify in 2025 after opposition from utilities, labor, and business groups.
SB 26-142’s deregulatory core deserves support, the geothermal mandate deserves scrutiny, and the coverage deserves a correction.
