(1) The administrator shall determine the actual value of the operating property and
plant of each public utility as a unit, giving consideration to the following factors
and assigning such weight to each of such factors as in the administrator's
judgment will secure a just value of such public utility as a unit:
(a) The tangible property comprising its plant, whether the same is situated
within this state or both within and without this state, exclusive of any tangible
property situated without this state which is not directly connected with the
business in which such public utility is engaged within this state;
(b) Its intangibles, such as special privileges, franchises, contract rights and
obligations, and rights-of-way; except that licenses granted by the federal
communications commission to a wireless carrier, as defined in section 29-11-101,
C.R.S., shall not be considered, nor shall the value of such licenses be reflected, in
the administrator's valuation of the carrier's tangible property;
(c) Its gross and net operating revenues during a reasonable period of time
not to exceed the most recent five-year period, capitalized at indicative rates;
(d) The average market value of its outstanding securities during the
preceding calendar year, if such market value is determinable;
(e) (I) When determining the actual value of a renewable energy facility that
primarily produces more than two megawatts of alternating current electricity, the
administrator shall:
(A) Consider the additional incremental cost per kilowatt of the construction
of the renewable energy facility, taking into account the nameplate capacity of any
energy storage system in addition to generation capacity, over that of the
construction cost of a comparable nonrenewable energy facility, inclusive of the
cost of all property required to generate and deliver energy to the interconnection
meter, that primarily produces alternating current electricity to be an investment
cost and shall not include the additional incremental cost in the valuation of the
facility; and
(B) Not add value to a renewable energy facility for any renewable energy
credits created by the production of alternating current electricity.
(II) For purposes of this paragraph (e), renewable energy has the meaning
provided in section 40-1-102 (11), C.R.S., but shall not include energy generated from
a small or low impact hydroelectric energy facility, a geothermal energy facility, a
biomass energy facility, a wind energy facility, or a solar energy facility.
(III) (A) For purposes of determining the actual value of a renewable energy
facility as specified in subparagraph (I) of this paragraph (e), an owner or operator
of a facility shall provide a copy of the facility's current power purchase agreement
to the administrator by April 1 of each assessment year as an attachment to the
statement required as specified in section 39-4-103 (1); except that, if a copy of the
current power purchase agreement was previously provided either by the owner or
operator or by the purchaser of power and there is no material change in the
facility's current power purchase agreement, the owner or operator of a facility
shall not be required to provide a copy of the agreement.
(B) If the owner or operator of a facility does not provide a copy of the
facility's current power purchase agreement as specified in sub-subparagraph (A)
of this subparagraph (III), the administrator shall have the authority to request a
copy of the current power purchase agreement from the purchaser of power
generated at the facility; except that, if a copy of the current power purchase
agreement was previously provided either by the owner or operator or by the
purchaser of power and there is no material change in the facility's current power
purchase agreement, the purchaser of power shall not be required to provide a copy
of the agreement.
(C) All power purchase agreements provided to the administrator pursuant
to this subparagraph (III) shall be considered private documents and shall be
available only to the administrator and the employees of the division of property
taxation in the department of local affairs.
(1.5) The administrator shall determine the actual value of a small or low
impact hydroelectric energy facility, a geothermal energy facility, a biomass energy
facility, a wind energy facility, or a solar energy facility as follows:
(a) The general assembly hereby declares that initial consideration by the
administrator of the cost approach and market approach to the appraisal of a wind
energy facility or a solar energy facility results in valuations that are neither
uniform nor just and equal because of wide variations in the production of energy
from wind turbines and solar energy devices, as defined in section 38-32.5-100.3
(2), because of the uncertainty of wind and sunlight available for energy production,
and because constructing a wind energy facility or a solar energy facility is
significantly more expensive than constructing any other utility production facility.
The general assembly further declares that it is also appropriate to initially value
small or low impact hydroelectric energy facilities, geothermal energy facilities,
and biomass energy facilities, which also have high construction costs relative to
their ongoing operational costs, using the income approach. Therefore, in the
absence of preponderant evidence shown by the administrator that the use of the
cost approach and market approach results in uniform and just and equal valuation,
a small or low impact hydroelectric energy facility, a geothermal energy facility, a
biomass energy facility, a wind energy facility, or a solar energy facility shall be
initially valued based solely upon the income approach.
(b) (I) For a property tax year that a tax factor applies, the actual value of a
small or low impact hydroelectric energy facility, a geothermal energy facility, a
biomass energy facility, a wind energy facility, or a solar energy facility is an
amount equal to a tax factor times the selling price at the interconnection meter.
For a property tax year that a tax factor does not apply, the administrator shall
determine the actual value of the facility giving appropriate consideration to the
cost, income, and market approaches; except that the actual value shall not exceed
the depreciated value floor calculated using the cost basis method of taxation as
determined by the administrator for a renewable energy facility pursuant to
subsection (1)(e) of this section.
(II) As used in this article, interconnection meter means the meter located
at the point of delivery of energy to the purchaser.
(III) As used in this paragraph (b), selling price at the interconnection meter
means the gross taxable revenues realized by the taxpayer from the sale of energy
at the interconnection meter.
(IV) As used in this subsection (1.5)(b), tax factor means a factor annually
established by the administrator. For a facility that begins generating energy
before January 1, 2021, the tax factor is a number that when applied to the selling
price at the interconnection meter results in approximately the same tax revenue
over a twenty-year period on a nominal dollar basis that would have been collected
using the cost basis method of taxation as determined by the administrator for a
renewable energy facility pursuant to subsection (1)(e) of this section. For a facility
that begins generating energy on or after January 1, 2021, the tax factor is a number
that, when applied to the selling price at the interconnection meter, results in
approximately the same tax revenue over a thirty-year period on a nominal dollar
basis that would have been collected using the cost basis method of taxation as
determined by the administrator for a renewable energy facility pursuant to
subsection (1)(e) of this section. After the first twenty or thirty years of a facility's
life, as applicable, a tax factor is not applied. For a renewable energy facility that
begins generating energy before January 1, 2012, the administrator shall include
only the cost of all property required to generate and deliver renewable energy to
the interconnection meter that does not exceed the cost of property required to
generate nonrenewable energy. For a renewable energy facility that begins
generating energy on or after January 1, 2012, the administrator shall include only
the cost of all property required to generate, store, and deliver renewable energy to
the interconnection meter that does not exceed the cost of property required to
generate and deliver nonrenewable energy to the interconnection meter.
(V) For purposes of calculating the tax factor as required in subparagraph
(IV) of this paragraph (b), an owner or operator of a small or low impact
hydroelectric energy facility, a geothermal energy facility, a biomass energy
facility, a wind energy facility, or a solar energy facility shall provide a copy of the
small or low impact hydroelectric energy facility's, geothermal energy facility's,
biomass energy facility's, wind energy facility's, or solar energy facility's current
power purchase agreement to the administrator by April 1 of each assessment year.
The administrator shall also have the authority to request a copy of the current
power purchase agreement from the purchaser of power generated at a small or
low impact hydroelectric energy facility, a geothermal energy facility, a biomass
energy facility, a wind energy facility, or a solar energy facility. All agreements
provided to the administrator pursuant to this subparagraph (V) shall be considered
private documents and shall be available only to the administrator and the
employees of the division of property taxation in the department of local affairs.
(c) The location of a small or low impact hydroelectric energy facility, a
geothermal energy facility, a biomass energy facility, a wind energy facility, or a
solar energy facility on real property shall not affect the classification of that real
property for purposes of determining the actual value of that real property as
provided in section 39-1-103.
(d) Pursuant to section 39-3-118.5, no actual value for any personal property
used in a small or low impact hydroelectric energy facility, a geothermal energy
facility, a biomass energy facility, a wind energy facility, or a solar energy facility
shall be assigned until the personal property is first put into use by the facility. If
any item of personal property is used in the facility and is subsequently taken out of
service so that no small or low impact hydroelectric energy, geothermal energy,
biomass energy, wind energy, or solar energy is produced from that facility for the
preceding calendar year, no actual value shall be assigned to that item of more
than five percent of the installed cost of the item for that assessment year.
(e) The administrator shall determine the actual value of an energy storage
system or clean energy resource in a manner similar to the method used for a small
or low impact hydroelectric energy facility, a wind energy facility, a geothermal
energy facility, a biomass energy facility, or a solar energy facility under subsection
(1)(e) of this section and this subsection (1.5).
(2) If, in the judgment of the administrator, the books and records of any
public utility accurately reflect its tangible property, its intangibles, and its
earnings within this state during the most recent five-year period, the administrator
may determine from such books and records the actual value of its property and
plant within this state and need not determine the entire value of its property and
plant both within and without this state.
(3) (a) For property tax years 1982 through 1986, there shall be applied to
the actual value of each public utility an equalization factor to adjust the actual
value for the current year of assessment as determined by the administrator
pursuant to subsections (1) and (2) of this section to the public utility's level of value
in 1981.
(b) For property tax years commencing on or after January 1, 1987, there
shall be applied to the actual value of each public utility an equalization factor to
adjust the actual value for the current year of assessment as determined by the
administrator pursuant to subsections (1) and (2) of this section to the public
utility's level of value in the appropriate year that is prescribed in section 39-1-104
(10.2) and that is used to determine the actual value of properties that are subject
to said applicable subsection.
(c) Appraisal procedures, instructions, and factors utilized by the
administrator in carrying out the provisions of this section shall be subject to
legislative review, the same as rules and regulations, pursuant to section 24-4-103
(8)(d), C.R.S.
(d) The administrator shall certify to the public utility any difference in
valuation resulting from the application of this section. Said certification shall be
part of the evidence presented in determining rate structures by any applicable
rate-setting body.