COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO

This briefing by Energy Innovation compares 2019 securitization legislation passed in Colorado, Montana, and New Mexico. These laws allow utilities to issue ratepayer-backed bonds to refinance investments in early-retired electric generation plants, primarily coal, to reduce consumer costs by replacing high-cost corporate finance with low-cost debt.

• Colorado's 2019 securitization law is described as a 'best practices model nationally' because it provides the most extensive attention to public interest and consumer protection compared to Montana and New Mexico.
• Securitized bonds offer significantly lower costs for consumers than traditional utility financing; while shareholder returns on rate base assets typically range from 8-11 percent, securitized bonds can provide costs in the 3-4 percent range.
• Montana's legislation is the briefest of the three and allows bond proceeds to be used not only for retiring infrastructure but also to make capital available for 'least-cost electric generating facilities and other supply-side and demand-side resources.'
• Colorado and New Mexico both authorize the use of bond financing to mitigate the impacts of plant retirements on workers and communities, whereas Montana's law does not address these impacts.
• In New Mexico, the legislation establishes specific funding for community and worker assistance, requiring utilities to transfer 1.65% of the financed bond amount to an economic development assistance fund and 3.85% to a displaced worker assistance fund.
• Colorado's law includes strong oversight mechanisms, allowing the commission to hire bond counsel and financial advisors who owe loyalty solely to the commission and are prohibited from having financial interests in the bonds.
• The three states differ in their approach to replacement resources: Colorado allows utilities to own up to 50% of replacement resources if acquired via competitive bids; New Mexico requires competitive procurement with a preference for local labor and resources located in the retired plant's school district; and Montana allows utilities to build and own least-cost generation, including storage.

APA

LEHR, R., & O’BOYLE, M. (2020). COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf

Chicago

LEHR, RON, and MIKE O’BOYLE. COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO. Energy Innovation, 2020. https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf.

Wikipedia

{{cite report |last1=LEHR |first1=RON |last2=O’BOYLE |first2=MIKE |title=COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO |publisher=Energy Innovation |date=September 2020 |url=https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lehr2020comparing, author = {LEHR, RON and O’BOYLE, MIKE}, title = {{COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO}}, institution = {Energy Innovation}, year = {2020}, month = sep, url = {https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }