House Bill 23-1281 Summary

• Colorado establishes regulatory framework for investor-owned utilities to develop clean hydrogen projects by requiring Public Utilities Commission investigation by September 1, 2023, and adoption of rules by December 1, 2024.

• Defines clean hydrogen as either green hydrogen or hydrogen produced with lifecycle greenhouse gas emissions rates meeting federal standards under 26 U.S.C. Section 45V, with preference for qualified uses in hard-to-decarbonize industries, heavy-duty vehicles, and aviation.

• Public Utilities Commission must evaluate clean hydrogen projects against alternative projects, including impacts on greenhouse gas emissions, water quality, air pollutants, ratepayers, workforce, and disproportionately impacted communities; projects with net negative cumulative impacts must be denied.

• Creates income tax credit of $1.00 per kilogram for Tier One hydrogen emissions or $0.33 per kilogram for Tier Two emissions for qualified uses from 2024-2033, with annual caps on total credits per taxpayer ($1 million initially, declining to $250,000 by 2029).

• Appropriates $360,758 to Public Utilities Commission, $95,166 to Department of Law, and $12,861 to Department of Revenue for fiscal year 2023-24 to implement the clean hydrogen regulatory program.