Local Sourcing of Renewables – Desirable? Legal? Inconsistent?

Colorado’s Senate Bill 13-252, which passed through the General Assembly strictly on a partly line vote and which will presumably be signed into law by Governor Hickenlooper, accomplishes three principal objectives:

1. It expands the renewable energy obligation of the state’s rural electric cooperatives and their wholesale provider, Tri-State G&T; 
2. Adds electrical generation fueled by captured coal mine methane and syngas from the pyrolysis of municipal solid waste to the eligible energy resources for compliance with the RES; and
3. Removes the in-state multiplier for compliance with the RES. 

In a column a few weeks ago (click here), I spoke about this bill when it was first introduced and how it was being shepherded through the legislature. One of my principal concerns was that it perpetuates the nonsensical, opaque, retail rate impact calculation in the Colorado RES that has been circumvented at every opportunity by Colorado’s two investor owned utilities with the complicity of legislators and regulators. Though this retail rate mythology persists, I am less concerned about the co-ops abusing it at the expense of their ratepayers than has been done by the IOUs. 

Today I would like to focus on the in-state multipliers which grant a preference to Colorado-based projects over those from out of state. The rationale for eliminating the in-state preference was an acknowledgment that it would likely be found to be an unconstitutional violation of the dormant commerce clause of the U.S. Constitution (Article I which expressly grants to Congress the power to regulate commerce among the states). OK, fair enough, though there are probably ways around that prohibition such as requiring that the project actually deliver energy into Colorado’s grid in order to be eligible for the RES. 

But today, out of Ontario, Canada comes word that the World Trade Organization has ruled against the province’s local content requirements for receipt of incentives paid to producers of renewable energy (click here). While not strictly the same as the in-state preference under Colorado’s RES, the parallels are obvious. Moreover, recall that there has been criticism of wind production tax credits that have been claimed by developers (domestic and foreign) because of the high foreign content of wind turbine generators (especially the generators and gear boxes). Hence, at a national level we find local preferences to be illegal and at an international level we now find local sourcing requirements to be equally problematic. So much for the argument about the economic development benefits of state renewable standards – they may exist but only if the lower transportation costs of local sourcing outweigh the lower costs of foreign produced goods. 

On the other hand, out in Nevada, the legislature is considering a bill to close certain loopholes in Nevada’s renewable standard – coincidentally, also Senate Bill 252 (see the report in the Las Vegas Sun). This bill would ratchet down the amount of energy efficiency credits that can be used toward RPS compliance. According to Nevada’s Governor, the law should not allow the utility “…to meet the portfolio standard by handing out energy-efficient light bulbs at Home Depot.” Seems reasonable. Ironically, Colorado’s Senate Bill 13-272, which would have required that 30 percent of gas-utility DSM funds be dedicated toward more substantive technologies such as solar thermal and ground source heat pumps was killed in committee (see my post on this topic here). Hence, our DSM programs remain focused on energy-efficient light bulbs handed out at Home Depot… and perhaps Lowes.

Comments on Colorado Senate Bill 272 Encouraging Greater Use of Renewable Thermal Technologies in DSM Programs

On April 18, the Colorado Senate Agricultural, Natural Resources and Energy Committee took up SB13-272 which encourages greater use of renewable thermal technologies in utility DSM programs.  I have been advocating such treatment, especially with respect to ground source heat pumps, for several years.  The hearing room was packed with both proponents and opponents and, unfortunately, time constraints did not allow me to testify in favor of the bill.  Below are the prepared remarks that I would have delivered if given the opportunity.

Comments on SB13-272

Richard P. Mignogna, Ph.D., P.E.

Madam Chairperson and members of the committee, thank you for this opportunity to testify in favor of SB13-272.  I am presently the principal in a small consulting firm, Renewable & Alternative Energy Management, LLC in Golden.  Prior to founding my business, I served for more than 6 years on the Staff of the Colorado Public Utilities Commission as a Professional Engineer and Senior Authority on Renewable Energy.  I was, essentially, the fiscal note attached to the legislation implementing Amendment 37.  I am testifying before you today not on behalf of any trade, industry, or advocacy group, but only as an independent, knowledgeable individual to help you evaluate this proposed legislation and act in the public interest.

While at the PUC, I spoke on numerous occasions about the potential for ground source heat pumps, in particular as part of DSM programs.  Hence, it is encouraging to see some of those concepts coming to fruition in this bill.  It has not been a surprise to me that what are termed highly energy efficient renewable thermal technologies have been underrepresented in utility DSM & energy efficiency programs.  Today, you may hear about the low price of natural gas as a contributing factor, but this was true even when natural gas prices were three times what they are now. 

The reasons for this are complex and have more to do with the difficulty in evaluating the benefit/cost ratio of renewable thermal technologies such as solar thermal and ground source (aka geothermal) heat pumps.  On the electric side, determining the energy savings of a new dishwasher or refrigerator, or even CFLs and LEDs is a relatively simple matter.  But, evaluating the energy savings and environmental benefits of thermal technologies used for space conditioning and water heating is more difficult.  No less real, just more difficult.

For example, one must consider whether the installation will be in a heating dominated climate or a cooling dominated climate.  On the heating side, what fuel is being displaced? Propane? Electricity? Natural gas?   On the cooling side, ground source heat pumps displace electricity used to power air conditioning, and naturally the environmental benefits will depend on what fuel would have been used to generate that electricity.  So they perform double duty.  But, while they are extraordinarily efficient, they do have a high first cost and retrofits can be especially challenging, which is why support through DSM programs is especially important.

I understand that the introduced version of SB13-272 has been significantly modified by a strike-below amendment which is presently under consideration.  Nonetheless, I still believe that even the current version of SB13-272 is a positive and welcome step forward in energy efficiency and in fostering consumer applications of renewable thermal energy technologies.

The introduced version of the bill did contain a few notable deficiencies, some of which have been remedied in the current amended version.  The first and most critical was removal of the apparent requirement for cost recovery of a portion of utility DSM expenditures in base rates where they could have been hidden from scrutiny by the ratepayers who are paying for these programs.  This has been one of the principal difficulties with RES funding, much of which is hidden in the Electric Commodity Adjustment (ECA) rider.  Also, present statute §40-3.2-103(2)(c)(I), created by HB07-1037, specifically anticipates cost recovery for DSM without the need to file a rate case, hence the present DSMCA.  With that said, current statute §40-3.2-103(2)(c)(II) and PUC rules already provide utilities with an option to file for base rate recovery of DSM expenditures, so it is not clear that this provision was needed in this bill.

Next, the cap on DSM expenditures of 4 percent of revenues is probably excessive.  Consider that the RESA for the RES is presently set at only 2 percent.  Current gas DSM rules require expenditures of the greater of 2 percent of base rate revenues or ½ percent of total revenues.

A useful provision in the introduced bill, which has been stricken in the amended version, called for utilities to devote 30 percent of their DSM expenditures to renewable thermal energy technologies such as ground source heat pumps and solar thermal systems.  Replacing the 30 percent provision is language that merely instructs the PUC to “give [its] fullest consideration to DSM plans that incorporate a diversity of DSM measures.” The deletion is unfortunate because I don’t believe that the remaining provisions of the bill (i.e., replacing the total resource cost test with a utility resource cost test) will provide sufficient support for these technologies to move the needle. 

The only problem with the 30 percent clause in the original bill was that it called for the PUC to direct utilities to “allocate at least thirty percent of [their] DSM program funding to the development of renewable thermal technologies.” This should merely have been reworded to deployment of renewable thermal technologies since we’re not talking about an R&D program but incentives to encourage consumers to adopt these technologies.  With present DSM programs, ratepayers are already making a substantial investment in energy efficiency.  This bill is needed to help direct that investment more effectively.

Both the introduced and amended versions of the bill instruct the PUC to direct such expenditures by 01 July 2013, but they do not require a rule making identifying the eligible technologies until 30 September 2013.  In my experience, the rule making needs to come first.

With these few, simple fixes, I believe that SB13-272 will be worthy of your support and I encourage its adoption.

A Controversial Bill to Expand Colorado's Renewable Energy Standard

An editorial in the 10 April 2013 issue of The Denver Post discusses a proposal recently introduced in the Colorado Senate to extend and expand Colorado's Renewable Energy Standard.  You can read the Post's editorial here.

Those who are interested can track the progress of Senate Bill 13-252 on the Colorado General Assembly website.  In expressing its concern with this bill, the Post states "A 2007 law requires the co-ops and their utility supplier, Tri-State Generation and Transmission Association, to meet a 10 percent renewable standard by 2020."  This is only partly true.  Co-ops are held to a 10-percent by 2020 standard in the RES, but Tri-State G&T, the wholesale supplier to 18 of them, has no compliance obligation at all.  SB13-252 would put Tri-State under a 25-percent standard.

While The Post argues that the legislature may be moving too fast on this bill -- and they may be right -- we have long held that it is fundamentally inequitable for approximately half the state's electricity consumers (the 55 percent who are served by Xcel or Black Hills) to fund the RES obligation while muni and co-op customers enjoy a free pass, or nearly so.  With that said, the 2-percent rate impact limitation crafted in this bill is even more byzantine than the so-called rate impact limitation in the RES for investor-owned utilities (Xcel and Black Hills) which has been treated as merely an inconvenience to be circumvented at every opportunity.  A totally different approach to rate protection and renewable energy funding is called for than what we now have.  If you don't believe that, ask why Xcel's RESA deferred account is tens of millions of dollars in the red -- and upon which you're paying interest.

One of the more beneficial aspects of SB-252, however, is the addition of electricity generation using vented coal mine methane to the list of eligible RES resources.  That provision is clearly worthy of support.

Last, SB-252 also eliminates in-state preferences such as the 1.25 REC multiplier for Colorado-based projects.  This provision, many feel, is an acknowledgement that the suit against Colorado's RES, at least on that point as a violation of the Interstate Commerce Act, is likely to be successful.  But, rather than simply removing the multiplier, the bill's proponents apply the multiplier to all projects regardless of location without limitation, at least through 2014.  That is hard to justify as there are other mechanisms for implementing various preferences that would not violate the Commerce Act.

As I write this piece, SB-252 was recently passed out of the Senate State, Veterans, and Military Affairs Committee (a questionable committee assignment) and on to the Senate floor.  It will be interesting to see what happens to it from there.  

Solar Doing Good

The other day I discovered that a team from Oakland, California based GRID Alternatives was in Colorado erecting solar PV systems on a dozen Habitat for Humanity homes in Lakewood, Colorado. So, I contacted Stan Greschner, director of GRID Alternatives’ Single-family Affordable Solar Homes (SASH) program to learn more. 

The GRID Alternatives SASH program began as part of the California Solar Initiative and provides low-cost (and in some cases no cost) PV systems to qualifying low income home owners. But there is more to it than that. GRID also leverages the efforts of numerous volunteers from local businesses, trade schools, and elsewhere in the community who learn about solar and gain skills in erecting PV systems. On the day I visited, Stan told me that they had about 30 workers on site each day, most of whom had never before installed a PV system. 

Stan Greschner with volunteers preparing to install a PV
system on a Habitat for Humanity home in Lakewood, Colorado.

A couple of years ago when I led the effort to develop the rules for Colorado Solar Gardens, Stan came out to help us think through how to incorporate a set aside for low income participants in that program. What came out of that was a requirement that 5% of solar garden capacity must be reserved for low income subscribers. At the time, we spoke of GRID’s hope to expand its program outside of California. With the Habitat homes in Lakewood, Colorado has the first GRID Alternatives project outside of California. I’m told that GRID plans to expand its program in Colorado and open a local office here. 

One of the completed systems at GRID Alternatives'
Lakewood, Colorado project.

What I find most encouraging about this program is that it provides utility assistance to those who need it the most while also training the volunteers who install the systems. And, ratepayer contributions into the renewable energy fund are put to good use… truly a win-win-win for all involved. To learn more about GRID Alternatives and the work they do, check out their website at www.gridalternatives.org.

Fracking Wind Energy and the Production Tax Credit

OK, now that I’ve got your attention… you can’t possibly have a heartbeat and not be aware of ongoing disputes concerning two important energy sources: the expiring Production Tax Credit (PTC) for wind energy and concerns over natural gas well hydraulic fracturing or fracking.  Aside from the fact that both of these issues have become highly politicized, what may be less obvious to many folks is just how closely related these two issues really are.

 

Wind energy proponents argue that without an extension of the PTC (which presently provides a tax credit of $22 per MWh produced for the first 10 years of a project’s life) new wind projects will come to a halt and jobs will be lost.  Hold that thought for a moment but reserve judgment.  On the other hand, the fracking discussion is dominated by environmental concerns with drilling and, in particular, how close drilling should be permitted to residential communities.  Back in June, I penned a guest commentary in The Denver Post concerning the apparent inconsistency in how these two energy sources were treated from a regulatory standpoint (click here for that column).  To wit, the state appears totally disinterested in the proximity of one type of industrial activity (wind) to your back door while claiming primacy in regulating the other.

What is getting lost in this conversation is the fact that the development of wind energy is dependent more on the price of natural gas than on the PTC.  When utilities, such as Xcel, make the case for a new wind energy development, it is based on a comparison to an equivalent amount of electrical generation from gas-fired generators.  While the PTC helps tilt that comparison toward wind, low natural gas prices shift the balance back in favor of gas generators.  And, what is keeping natural gas prices so low?  The development of previously unrecoverable shale gas resources using horizontal drilling and, yes, fracking.

 

On the one hand stands a more than 20-year-old energy industry (wind) that claims that it still needs a public subsidy “head start” to compete, and on the other we have an even older energy resource that owes its resurgence to technological advance.  Wind is among the least dense energy sources that we have, contributes to energy sprawl covering thousands of acres, and typically produces the most when demand is the least (i.e., the middle of the night).  Natural gas generators, in contrast, are relatively compact, flexible, and produce when demand is high.  The drilling, however, leads to its own kind of sprawl.  Importantly, as evidenced in recent Energy Information Agency reports, it is the increase in natural gas-fired generation that is primarily responsible for recent reductions in CO₂ emissions from electrical generation.

Jobs are at stake with both energy sources so that argument is weak.  At what point in time does wind energy get weaned off the public subsidy – whether it be production tax credits or higher ratepayer costs that result from the Renewable Energy Standard?  Discussing the pros and cons of solar would consume more electrons than can be allotted to this post, so I won’t even begin to get into that, other than to say that there are both pros and cons there too.  The Administration’s all-of-the-above strategy is nonsense.  What is needed is an all-that-is-smart approach.

 

Environmental concerns with fracking are not totally without merit.  However, they emanate more from poor well completions and near surface drilling contamination than from what occurs deep underground.  And, I don’t believe that arguments calling for greater setbacks of drilling activity from residential communities are misplaced either.  Hence, Governor Hickenlooper’s recent suggestion that additional changes to the oil and gas drilling rules may be in order is well taken.  On the wind energy side, it is well past time that this industry got its costs in line so that it can compete head to head with other energy sources.  Cutting off the PTC cold turkey may not be in the public interest, but phasing it out over a few years may well be.  Wind needs to focus more on real engineering and less on financial engineering.  Both sources of energy will be important to the future development of sustainable clean energy generation.

24 Heures Du Mans -- Now that's an auto race!

For this post, I thought we'd take a bit of a departure from our usual energy topics -- sort of.  This weekend will be the 80th running of the 24 Hours of Le Mans -- one of the world's most grueling auto races.  So, how does this fit in with our theme of emerging technologies?  Simple... the race track has long been where new technologies are developed and refined long before they make it to the consumer showroom.  Check out the pic below from the NY Times for two of the most high tech vehicles ever built.

Audi R18 E-Tron Quattro leading Toyota TS030 at Le Mans test day. NY Times

One of the things that makes Le Mans so intriguing is the LMP1 class which stands for Le Mans Prototype 1.  This is the class where the latest technologies are put to the test.  For instance, both of the vehicles in the picture above employ Kinetic Energy Recovery Systems (KERS).  "What is that?" you ask.  Think of it as a super regenerative breaking system that is common on current electric vehicles and hybrids.  While the regenerative breaking system on your Nissan Leaf, for instance, simply helps recharge the battery, in a KERS the energy recovered on braking going into a turn is then immediately used to provide a horsepower boost coming out of the turn.  The two vehicles above do this differently.  The Audi R18 E-Tron (a diesel vehicle by the way) employs a rapid response flywheel while the Toyota utilizes a capacitor to store the energy.  Very cool stuff.

And, in case you're wondering how a diesel could possibly win an auto race, the Audi shown above is no ordinary diesel -- it has won this race 10 of the last 12 years.  Le Mans will also feature hybrid vehicles and for 2013 there is also talk of a completely fossil free hydrogen-electric hybrid.  If you want to learn more about this years race, check out a recent article in the NY Times or go to the Le Mans website to learn about the different classes of vehicles.   

The race wraps up at 7:00am Sunday, 17 June (MDT).  If you can't find it on your TV, check out the live webcast here.

Recognition for Ground Source Heat Pumps -- the little g in Geothermal

Over the years, proponents of some forms of geothermal energy have suffered from a bit of an identity crisis. There is, of course, Big G which generally refers to hydrogeothermal resources of the type that create geothermal electrical generation common to northern California, Nevada, Indonesia, etc. and shown below in the new Hudson Ranch I system that recently went online in the Salton Sea of California.

Big G also commonly refers to geothermal resources used for direct use as in hot springs resorts and the district heating system in Pagosa Springs, Colorado.

Then there is "little g" which refers variously to geothermal heat pumps (GHP), geoexchange, or, more appropriately, ground source heat pumps (GSHP) -- a fundamentally different energy resource and technology than Big G. It doesn't help that both Big G and little g, and which both suffer from a bit of a Rodney Dangerfield complex, are often discussed at the same conferences which only further confuses the two. Rather than a resource for electrical generation or direct use heating, ground source is better looked at as an energy efficiency device that can provide both heating and cooling for space conditioning (I won't go into the details here. Interested readers might want to start out with the Wikipedia entry). 

The basic problem with ground source is the high first cost of installing the loop field. While improving technology has increased the efficiency and cost effectiveness of the heat pump component of the system, there has been little improvement in the cost of installing the loop (see the excellent article by Tom Konrad in Forbes here). Thus, for residential systems in particular, GSHP remains at a competitive disadvantage -- especially in light of low natural gas prices. 

I have long argued that ground source deserves more recognition in utility demand side management/energy efficiency programs, most of which focus on weatherization programs (good) and nothing more sophisticated than rebates for kitchen appliances and compact fluorescent light bulbs (questionable). Some states have enhanced their renewable energy standards with new thermal energy standards. These have tended to focus more on solar hot water heating and, occasionally, biomass... still not much recognition for the only technology that provides both heating and cooling. 

During this legislative session in Colorado, a group convened to attempt to foster greater recognition for ground source in a thermal energy standard that was being discussed. Unfortunately, the single paragraph that discussed geothermal or ground source in what became Senate Bill 12-180 was lost in what morphed essentially into a biomass/forest conservation bill. That the bill was introduced late in the session and was tagged with a large fiscal note did not bode well for its prospects and it was soon killed in committee. That was probably just as well since the bill was a mess and the best it would have done would have been to create a thermal energy working group. In the present economic environment, and with little support for new incentive programs, I suspect that ground source is going to have to continue to rely on technological advance and new financial innovations (similar to the PPAs that have fostered greater PV adoption) to reduce the first cost to consumers so that it can compete with more established space conditioning technologies.

World's Largest Concentrating PV System Goes Hot in Colorado!

Fans of utility-scale solar PV are likely aware of the world’s largest highly concentrating PV (HCPV) system that has been under construction in the heart of Colorado’s San Luis Valley. On May 10, Cogentrix Energy, LLC (a unit of Goldman Sachs) announced that it has achieved commercial operation at its 30MW HCPV project which will provide solar energy to Public Service Company of Colorado (PSCo) for compliance with the utility’s wholesale DG obligation under Colorado’s Renewable Energy Standard. The Amonix MegaModule® assemblies that form the heart of this system rely on Fresnel lenses to concentrate solar irradiation 500 suns onto triple junction solar cells originally developed by SpectroLab (a Boeing company) as part of the US space program. Looking like something out of the movie Transformers, the project consists of over 500 60kW (nominal) dual axis trackers on approximately 225 acres approximately 14 miles NW of the southern Colorado town of Alamosa (click here for a Google map). 

Truly an impressive facility, this project was bid into the 2009 All Source Solicitation conducted as part of PSCo’s 2007 Electric Resource Plan (Colorado PUC docket 07A-447E). Electricity from the plant, estimated at approximately 75,000 MWh for the first full year of operation, is provided to PSCo under a 20-year PPA. Financing for the approximately $145 million project was facilitated by a $90.6 million loan guarantee from the US Department of Energy proving that not all DOE-backed funding necessarily had to result in Solyndra-like failures (in fact, there is a fundamental difference between providing a loan guarantee for an energy development project such as this and a manufacturing facility such as Solyndra). The one downside, albeit a significant one, is that the Colorado PUC exempted this project along with another 30MW project in the San Luis Valley developed by Iberdrola Renewables from the 2% rate cap in Colorado's renewable standard. As I’ve pointed out previously, compliance with Colorado’s RES has been achieved, and even exceeded, but at a cost far greater than the 2% rate cap stipulated in the statute. 

Back in October 2011, I had the opportunity to tour the facility with Cogentrix VP Jef Freeman while it was still under construction. Below are a handful of the pictures I took at that time.

Approaching the plant from the southeast, it is difficult to get a true appreciation for the scale of the facility.

Looking closer, it isn't clear if this is a solar facility or a spaceport!

Loading the Amonix MegaModule panel assemblies onto the pedestals.

Look close and you might see the workers attaching the panel assembly to the pedestal from below.

To get a feel for the scale, check out the pickup truck in comparison to the trackers.  The Solectria inverter on each tracker can be seen in the foreground.

When not tracking the sun, or stored due to high winds, the panels will remain horizontal as shown here.


All photos Copyright Richard Mignogna, 2011.

Discrepancies in Colorado Energy Land Use Policies

There is a discrepancy playing out in Colorado’s energy landscape and energy regulatory policy that may be poorly understood by officials and consumers alike.  It has to do with local control versus establishing statewide standards for siting energy facilities of all types.  

This legislative session has seen the introduction of a number of initiatives to enhance local control over the siting of oil and gas drilling activity largely intended to allow local jurisdictions to restrict the proximity of drilling activity to residential developments. These initiatives were opposed by, among others, the Hickenlooper administration and its cognizant regulatory agency, the Colorado Oil and Gas Conservation Commission (COGCC).  The argument essentially put forth by COGCC was that there needs to be uniform standards for siting drilling activity and that it is the agency best qualified to monitor and regulate the industry and to establish and enforce such standards.  As a hoped-for solution to the dispute between factions seeking local control versus statewide control, the administration has convened a task force and charged it with an ambitious agenda of reconciling local concerns with state agency control in only a few weeks time.

In contrast, consider the regulatory regime governing the siting of electrical generation facilities.  While the state agency of competent jurisdiction most closely associated with the development of electrical generation facilities is the Colorado Public Utilities Commission (CPUC), with the possible exception of transmission line siting, it wields little influence in the siting of electrical generation facilities be they coal fired, natural gas fired, solar, wind, or otherwise.  Rather, satisfying environmental concerns, economic concerns, building permits, and land use issues for facilities outside of municipalities rests solely in the hands of county commissions through what is known as the 1041 permit process.  One of the areas in which the discrepancy between state control of oil & gas development versus local control of power generation has become most obvious is the siting of wind and solar renewable energy facilities, and one of the cases that has received considerable recent attention is the 1041 permit process for a concentrating solar power facility near the San Luis Valley town of Center in Saguache County.

The Saguache County project, proposed by California solar developer Solar Reserve, posits the development of two concentrating solar electric generation facilities known as “power towers.”  A number of groups expressed environmental, wildlife, view shed, and quality of life concerns with this proposal to construct two 656-foot towers smack in the middle of the Valley on land that is presently dedicated to agricultural use.  In a 2 – 1 decision, the Saguache County commissioners recently approved the Solar Reserve 1041 permit application.  In its decision, the County Commission eschewed the aforementioned concerns in favor of the promised economic impact that the development would have.  If you’re having difficulty envisioning what this project entails, consider that the development would create an industrial facility encompassing approximately six square miles, the central focus of which would be two towers that are only 50 feet short of the tallest building in downtown Denver.  It is difficult to envision how such a project, with the Sand Dunes National Park and Sangre de Cristo Mountains to the east and the San Juan Mountains to the west, fits into the character of what is largely a pristine agricultural area.

A similar issue concerning the state’s abrogation of its siting authority to local officials can be found in the siting of wind turbines.  Here too, the absence of any statewide siting rules is troubling.  Apparently, it is acceptable for state officials to take a hands-off approach to the construction of a massive 400-foot wind turbine with a life expectancy of 20 years or more 300 feet from your back door, leaving the decision to local officials, but only a state agency may weigh in on the drilling of an oil or gas well the same distance away.  This certainly seems inconsistent.  To be fair, COGCC at least maintains a database of all such drilling activity, issues permits, and monitors each well while CPUC in particular, and the state in general, seem strangely disinterested in regulating any aspect of the construction of wind or solar facilities having at least as great an impact.  Moreover, the public would likely find troubling the fact that CPUC does not even maintain a list or require the most minimal registration for any renewable energy generation facility, be it a $400 million wind farm or a $50,000 solar installation. Sadly, attempts at requiring CPUC to maintain such information in the past were met with resistance by public officials, utilities, and developers alike.

  

The concern here is not whether oil and gas development should fall under local or state jurisdiction.  Nor should this be construed as an argument in favor of limiting additional renewable energy development, as some will undoubtedly assume.  What is of concern is that there is a troubling inconsistency in the regulation of different energy sources based, apparently, on little more than political agenda.

An Insider’s Perspective on Colorado's Renewable Energy Standard – Some Critical Thinking about Colorado's "Successful" RES

As indicated in Mark Jaffe’s article, Power Surge Slows (The Denver Post, January 22, 2012), Colorado’s Renewable Energy Standard (RES) has in many respects been one of the more successful ones in the country. With rare exception, such as California’s 33% by 2020 goal, it is certainly one of the most ambitious. But, there is more to understand before we declare it an unqualified success. Importantly, the slow-down described in the article did not have to occur if only the state’s principal utility, bolstered by lax regulatory oversight, had acquired renewable resources in a more fiscally responsible and sustainable manner.

Among the benefits derived from the RES is that Colorado has attracted a handful of big name manufacturers such as Vestas and General Electric in wind turbine and solar panel manufacturing, respectively. Hopefully their local operations will prosper in spite of a difficult economic climate and tenacious competition from abroad. Colorado also has had, until recently, a thriving small solar installer industry but its success was predicated on too-generous incentives that broke the Ratepayer Bank while the Public Utilities Commission was late in recognizing the severity of the problem. Mark Jaffe’s article noted that Xcel Energy’s renewable fund – known as the Renewable Energy Standard Adjustment (RESA) account – is $51 million in the red and headed for worse before it gets better. What is less well known is that the utility earns its Commission approved rate of return on this deficit – a great deal if you can get it.