Project Development, Wind Power

Colorado Enacts 20% RPS; Munis and Co-ops 10%

In a formality central to his “New Energy Economy” pledge, Colorado Governor Bill Ritter (D) signed two bills last week that will work in tandem: one doubling the state’s renewable portfolio standard (RPS) to 20% for investor-owned utilities and the other aimed at getting the transmission built that’s crucial to connecting renewable energy resources with load centers.

House Bill 1281 doubles the renewable energy standard established by voters with the 2004 passage of Amendment 37. Large investor-owned utilities must now obtain 20% of their electricity from renewable sources such as wind and solar by 2020. The bill also is significant in that it requires municipal utilities and rural electric providers to achieve a renewable energy goal of 10% by 2020; such entities had been excluded from the requirements of Amendment 37. “By doubling the RPS, Colorado is reaffirming its commitment to maintaining national leadership in renewable energy development,” Interwest Energy Alliance Executive Director Craig Cox. “Colorado was the first state to pass an RPS at the ballot box, and Governor Ritter’s endorsement of a doubled RPS shows he is determined to fashion the ‘new energy economy’ around which he built his campaign last fall.” SB 100 requires utilities to identify “energy resource zones” where transmission constraints hinder the delivery of electricity to consumers or the development of new electric generation facilities to serve the state’s consumers. The bill requires utilities to undertake biennial reviews to designate areas in which transmission capacity lags behind generating capacity; for such areas, utilities would submit proposed plans for development of additional transmission facilities. The Colorado Public Utilities Commission (PUC) must grant or deny any necessary certificates for such development within 180 days. “The transmission expansion legislation (SB 100) was the first of the ‘new energy economy’ bills to pass the legislature and reach Governor Ritter’s desk,” said Cox. “This shows that policymakers have begun to understand the importance of strengthening transmission in order to increase wind energy development substantially.” Under the RPS, utilities can own 25% of the required renewable energy without putting it out to bid, or 50% if they show economic development benefits that the PUC approves. Xcel Energy will meet the previous 10% requirement for 2015 by the end of 2007, eight years early, and save customers about $400 million over the life of the renewables contracts as wind substitutes for high-cost natural gas for electric generation. AWEA Western Representative Ron Lehr pointed out that the laws are another step in Coloradans’ growing understanding of renewables and their benefits. “Amendment 37 allowed Colorado voters to ratify the common sense notion that diversifying electric power generation away from over-reliance on fossil fuels was a good way to manage natural gas cost and coal environmental risks,” Lehr observed. “Once the amendment passed, thousands of Coloradans have turned out to help move new policies forward. Renewables are now bipartisan and mainstream. The people have spoken truth about power.” A recent study found HB 1281 would provide significant economic benefits, particularly to rural Colorado, increasing Colorado’s gross domestic product by $1.9 billion through 2020. Matt Baker, Executive Director of Environment Colorado, a key Colorado wind ally, called the new renewable standard “the most important environmental legislation in 20 years” at a celebration held on the day the Governor signed the bills. In his remarks to the 100 or so people celebrating the new laws, Baker noted that Ron Binz, the veteran consumer advocate and economist who has calculated wind savings to consumers, has been appointed chairman of the PUC. “With vast renewable energy resources and some of the nation’s most beneficial public policies, the West is poised to reassert its national leadership role in developing cost-stable wind energy,” said Cox. “Colorado and New Mexico both doubled their RPS laws this month and, importantly, brought rural electric co-ops into these standards for the first time. These laws will advance rural economic development and benefit urban consumers alike.” This article first appeared in the March 30th edition of Wind Energy Weekly and was reprinted with permission from the American Wind Energy Association.