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.