Steve Pomerance

The state legislature and the Governor`s Energy Office have been very active this session in moving forward their agenda for Colorado`s clean energy future. Three bills will make significant changes in our renewable energy goals, in the way citizens invest in solar generated electricity, and in metro area air quality. House Bill 10-1001, which Governor Ritter recently signed, raises the standard for renewable energy to 30 percent of retail electricity sales for 2020 and thereafter. This applies to Xcel Energy (about 65 percent of the state`s electricity, I am told) and Black Hills Energy (the other investor owned utility, about 10 percent). The 25 cooperative electric associations and larger municipal utilities must meet a 10 percent requirement. The bill is quite innovative: It rewards utilities for investing in renewables ahead of schedule; it reduces rebates as the cost of renewables drops; and solar owners will continue to pay to support more renewables even if they zero out th...

The state legislature and the Governor`s Energy Office have been very active this session in moving forward their agenda for Colorado`s clean energy future. Three bills will make significant changes in our renewable energy goals, in the way citizens invest in solar generated electricity, and in metro area air quality. House Bill 10-1001, which Governor Ritter recently signed, raises the standard for renewable energy to 30 percent of retail electricity sales for 2020 and thereafter. This applies to Xcel Energy (about 65 percent of the state`s electricity, I am told) and Black Hills Energy (the other investor owned utility, about 10 percent). The 25 cooperative electric associations and larger municipal utilities must meet a 10 percent requirement. The bill is quite innovative: It rewards utilities for investing in renewables ahead of schedule; it reduces rebates as the cost of renewables drops; and solar owners will continue to pay to support more renewables even if they zero out th...

Xcel has been in the news lately. In the first week of March, Xcel refused to issue rebates for photovoltaic panels to the owners of a mobile home because it is not a “permanent structure.” Also, the Public Utilities Commission (PUC) approved Xcel`s application for a two-tiered rate structure for residential customers. And Xcel backed Gov. Bill Ritter`s plan to convert a number of coal plants to natural gas to improve metro air quality. Although not obvious, the fundamental issue that ties all these events together is one that all investor owned utilities (IOUs) must eventually face — how to make money while providing a cleaner environment. IOUs make money by owning assets on which they earn a rate of return. In Xcel`s latest rate case, in December the PUC approved a 10.5 percent return on invested capital and 6.21 percent payment on Xcel`s bonds. The insider joke is that utilities always want to build the next “billion dollar block of concrete” — not for the power, but because it ...