Colorado likely to adopt tough new rural renewable energy requirements

 

Updated 5/16/13

This is “a direct assault on rural Colorado,” Rep. Brian DelGrosso, R-Loveland, fumed at Colorado’s Democratic lawmakers last week.

From the strength of his rhetoric, you might think wealthy Front Range cities had proposed phasing out production agriculture or even banning all guns. In reality, though, DelGrosso was piling scorn on a policy that would create opportunities for a major state industry – renewable energy.

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Photovoltaic panels at a solar power plant in Colorado's rural San Luis Valley. Sarah Gilman.

“You will not crucify us on the backs of windmills and solar panels,” another Colorado Rep., Lori Saine, R-Dacono, exclaimed.

At issue is Democrat-backed Senate Bill 252, which passed both houses of the state Legislature on a party-line vote and headed for the governor’s desk on May 1. If signed into law, which seems likely given that Gov. John Hickenlooper has signaled his support, it will require the rural electrical cooperatives that serve 70 percent of the state’s landmass and 25 percent of its residents to double the amount of renewable energy in their mix from 10 percent to 20 percent by 2020.

Reports the Colorado Statesman:

The legislation specifically targets the Intermountain Rural Electric Association, which serves ratepayers in counties south of Denver, as well as Tri-State Generation and Transmission Association, (which sells wholesale electricity to) 18 rural cooperatives across the state. The co-ops (could) charge (up to) 2 percent of a customer’s bill to pay for the upgrades and changes.

Tri-State and other cooperatives have argued that the measure would be backbreaking for rural electricity consumers: "If enacted, (the bill) will cost Tri-State between $2 and $4 billion in the next six years," the co-op’s board chair Rick Gordon testified in early April. At the midpoint of that range, he argued, electricity rates could balloon 20 percent.

“Shame on you for raising rates on rural families when this does not affect you or your constituents,” Rep. DelGrosso told the Denver-area lawmakers that support the bill during his tirade.

But much of the Front Range is already subject to the state’s more stringent renewable portfolio standard (RPS) for investor-owned utilities like Xcel Energy, which must generate 30 percent of their power from renewable sources by 2020. Before Colorado voters passed the first version of that RPS by ballot initiative in 2004, Xcel adopted the same argument as Tri-State has now. The utility helped form a group called Citizens for Sensible Energy Choices, which spent an estimated $1.5 million on a campaign arguing that the measure would hurt the economy and cause electricity bills to explode. According to Center for American Progress energy expert Richard Caperton, though, Xcel now says that the state’s renewable energy standard will ultimately save its consumers as much as $100 million over 25 years.

Today, 29 states and the District of Columbia have RPSs. It’s difficult to generalize their effects on electricity rates, despite conservative pundits’ attempts to do so as they argue in favor of various bills (including one in Montana) that weaken or eliminate the standards. For example, Grover Norquist’s suggestion that rates are higher in states with RPSs than those without isn’t especially illuminating, Caperton says, because “There are at least 13 reasons (average use per customer, the age of the distribution system, the generation resource mix, and local taxes among others) why one state could have higher rates than another.”

When Caperton crunched the numbers in a more specific way – calculating RPS states’ average annual electrical rate increases before and after their RPSs passed and comparing them to average rate increases in states without RPSs over the same time periods -- he found no pattern at all.

Moreover, RPSs provide clear economic benefits. Upping the standard for rural co-ops in Colorado, for example, will provide a much needed boost to the state’s already sizeable solar and wind industries, especially since Xcel and other utilities that had driven much of their past growth are on track to meet their existing RPS goals and have less incentive to aggressively invest in more. As we reported back in 2009, some among Tri-State’s rural member co-ops have long recognized this economic potential, as well as the fact that their supplier’s dependence on coal may itself lead to rate increases as infrastructure ages and environmental regulations get tighter. This April, the board of our own Delta-Montrose Electrical Association (DMEA) – which oversees a sparsely populated agricultural valley in western Colorado – passed a resolution to support SB252 if it allowed local co-ops to generate more of their own energy.

SB252 also allows power generated from coalmine methane – an especially potent greenhouse gas -- to count towards state renewable goals. That’s something DMEA’s board members have also lobbied hard for, since the organization’s service area is home to three giant underground coalmines that must vent methane to keep their workers safe. The valley already has one such project. “If (coalmine methane capture is) included in that renewable energy standard … it would improve the marketability of that resource,” board director Tony Prendergast testified last February at the state capital. “That … would be good for local economic development, good for the mines and provide another locally-generated energy resource which is something DMEA is very interested in.”

Assault on rural Colorado indeed…

Sarah Gilman is High Country News’ associate editor

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