CO SB272

Expands the definition of demand-side management (DSM) programs to include renewable energy technologies that reduce or offset electricity or gas consumption but cannot be net metered, such as ground-sourced heat pumps and active solar thermal systems.

Requires investor-owned retail natural gas utilities to allocate at least 30% of their DSM program budgets to renewable thermal energy technologies, effective July 1, 2013, with commission authority to review and adjust this level on or after July 1, 2018.

Caps gas utility DSM program expenditures at 4% of total full-service retail sales, up from the previous 0.5% minimum.

Directs utilities to submit proposals for including their most cost-effective and continuously marketable DSM programs in their rate base to free up existing DSM budgets for emerging technologies.

Establishes a utility cost test for measuring cost-effectiveness of gas DSM programs that excludes participant expenditures and requires the Public Utilities Commission to commence rulemaking by September 30, 2013 to implement these provisions.