Colorado Gas Utilities Ordered to Cut Emissions 41% by 2035

State Regulators Impose Stricter Mandate Than Agencies Recommended

Companies that supply Colorado homes and businesses with natural gas have been hit with new emission requirements forcing them to cut carbon pollution by 41% from 2015 levels.

The Colorado Public Utilities Commission voted 2–1 last month and rejected a 31% target recommended by state agencies. As a result, by 2035, investor-owned gas utilities will have to cut pollution and the decision was welcomed by climate advocates. They called the decision a victory for managing a transition away from burning fossil gas in Colorado buildings.

“It’s a really huge deal,” said Jim Dennison, staff attorney at the Sierra Club, one of more than 20 environmental groups that advocated for an ambitious target, reported Canary Media. “It’s one of the strongest commitments to tangible progress that’s been made anywhere in the country.”

Canary Media: Colorado Now Has One of the Nation’s Toughest Building-Energy Rules

According to Canary Media’s reporting, Colorado’s decision represents one of the most aggressive building-related emissions targets in the United States. The ruling falls under Colorado’s Clean Heat Standard, a first-in-the-nation policy created in 2021 requiring gas utilities to cut climate-warming pollution through electrification, energy efficiency programs, heat pump adoption, and methane leak reductions.

Xcel Energy, Black Hills Energy, and Atmos Energy — the state’s major gas providers — must now file substantially revised clean heat plans that demonstrate how they will comply with the deeper emissions mandate. These utilities had initially pushed for far lower requirements, arguing the rules would raise rates.

Climate Advocates Call It a Turning Point

Environmental groups told Canary Media the decision signals that Colorado regulators want a meaningful shift away from fossil gas in homes and buildings, where space and water heating generate a substantial share of the state’s climate pollution.

Advocates also emphasized that the tougher 41% reduction target aligns with Colorado’s long-term climate goals and is essential to meeting state law. Many also noted that fossil gas utilities have historically underinvested in electrification and efficiency programs, and the new ruling will require them to participate more seriously in the state’s transition.

Utilities Could Shift Toward Heat Pumps and Networked Geothermal

Canary Media also reported that utilities may increase electrification incentives, expand heat pump programs, and explore networked geothermal systems as long-term gas system alternatives. The PUC’s ruling encourages utilities to avoid “greenwashed” solutions such as excessive hydrogen blending, which regulators and scientists say provides minimal real climate benefit in buildings.

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