Opinion: Three big steps toward a better energy future


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 their individual energy use. These last two will allow more renewables to be included within the 2 percent rate increase cap.
Of the 30 percent allocated to renewable energy, a minimum of 1.5 percent must be from on-site generation. The other 28.5 percent is generated by off-site or utility scale projects and is calculated using a 1.25 multiplier times the actual kwh for in-state projects, an incentive carried over from Amendment 37. So the bill doesn`t really mandate 30 percent for Xcel or Black Hills, but around 25 percent. With co-ops and muni`s having a 10 percent standard, the average percentage for all of Colorado is even less. But because utilities need to create a buffer against projects failing, the probabilities are that they will stay well ahead of the yearly increase in standards as we approach 2020. I would prefer that the co-ops and muni`s met the 30 percent standard, and that there was a disincentive for out-of-state projects, but this is a very good effort. And reserving a percentage for customer owned photo-voltaics is a big plus.
The “Community Solar Gardens” bill (House Bill 10-1342) is still in process, but shows great potential for expanding the retail solar market. Most importantly, it requires the utility to provide virtual net metering. This way individuals or businesses can own pieces of a large off-site system but have their fraction of the system`s output count against their own electric consumption. Having worked on this problem a couple of years ago, it is clear to me that without such legislative action, this no-brainer approach to more cost-effective solar would be impossible to do.

There are a number of potential concerns with the early version of the bill that I saw. People who invest must be able to get the federal tax credits; since these credits depend on the exact form of ownership, the allowed organizational structures must match federal requirements. Any individual`s investment is not large enough to support extensive legal advice; so liability issues, allocation of expenses, distribution of renewable energy credits and sale proceeds, etc. should be spelled out in the legislation or rule-making. This bill should not be a back door for Xcel to restart their efforts to charge for integrating solar into their system; their attempt last year was a flop. These costs should be calculated as part of the overall conversion to a cleaner energy system, not considered piecemeal. Making WindSource a “Solar/WindSource” program would be far simpler than trying to create complex structures for renters to own renewables. Finally, Xcel should not be allowed to own solar gardens because of the inevitable conflicts of interest.
The bill (House Bill 10-1365) to clean up metro air quality is long overdue. Apparently this was prompted by the federal air quality rules; too bad it takes the Feds to get us to act. The bill targets Xcel`s coal fired power plants in Denver, Boulder and Brush. Xcel may close plants, convert to natural gas (which produces less CO2 and pollutants) and/or invest in efficiency or alternatives. The bill requires the PUC to approve a plan by the end of this year. Getting this quick result is key, as the political winds may change. The tough part will be resolving the conflict between Xcel`s financial interest in expanding their capital base and the citizens` interest in having the most cost — and climate-effective solutions, like energy efficiency.

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