Alternative-energy bill advances in House

By HANK LACEY THE GAZETTE

DENVER - Utilities would have to generate more of their power from alternative energy sources such as the sun and wind under a bill that received preliminary approval Friday in the House of Representatives.

HB1281 would expand on the requirements of Amendment 37 and would affect Colorado Springs Utilities and the state's rural electric cooperatives, including Intermountain Rural Electric Association. Amendment 37, approved by voters in 2004, mandates that utilities increasingly use renewable energy to achieve 10 percent of sales by 2015. As a municipal utility, Utilities is exempt from the requirement but has chosen to follow the rules.

If the bill receives final approval in the House, it then goes to the Senate.

Some Republicans sought Friday to allow utilities to count hydroelectric power as a renewable source, permit rural electric cooperatives to vote themselves exempt from the new requirements and require the Public Utilities Commission to study wildlife impacts before approving facilities that generate renewable energy.

Rep. Frank McNulty, R-Highlands Ranch, told legislators that the bill "plays favorites" by excluding hydropower. He said electricity generated by flowing water is more reliable than solar or wind power.

But Rep. Rob Witwer, R-Golden and a co-sponsor of the bill, said that proponents want to encourage development of new energy sources. "Hydroelectricity is already commercially viable," Witwer said.

Several Republicans urged the House to grant rural electric cooperatives the same optout authority they have under Amendment 37. They pointed out that two of those cooperatives, IREA and Brighton's United Power, Inc., voted to do so. The amendment proposal failed 44-19.

Rep. Victor Mitchell, R-Castle Rock, said he was concerned that the House was overriding the public's will. "Considering the type of election it was, with over 40,000 votes, I believe we shouldn't disrespect the will of the voters," Mitchell said.

Rep. Jack Pommer, D-Boulder, argued that allowing IREA and other cooperatives to opt out of the new requirements would undermine the purpose of the bill. "It only works if everybody participates," Pommer said.

The wildlife impact amendment also died.

The bill is a cornerstone of Gov. Bill Ritter's plan to build a "new energy economy" in the state.

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Report: Clean fuel good for economy

By HANK LACEY THE GAZETTE

DENVER - Colorado is in line for an economic boom if renewable energy use is increased, according to a report touted by Gov. Bill Ritter on Thursday.

The report, issued by Denver-based advocacy group Environment Colorado, says increasing the amount of energy generated from renewable sources such as the sun and the wind will increase the state’s gross domestic product by $1.9 billion by 2020.

“We’ve only just begun to tap the potential of a new energy economy,” Ritter said at a news conference. “Continued investment in clean energy helps our state ensure economic prosperity.”

The report also says that a law

requiring more energy to be generated from renewable sources will raise total wages paid in the state by $570 million, increase rural property owners lease revenues by $50 million, and generate an additional $400 million in property taxes for rural areas.

“Increasing our use of wind and solar power will help continue to unlock the economic potential of rural Colorado,” Lee Swenson, executive director of the Rocky Mountain Farmers Union, said.

Some legislators are skeptical that increased renewable energy production will generate the numbers included in the report.

“It won’t come without some costs as well,” Rep. Amy Stephens, R-Monument, said. “I’m a move forward kind of person, but I say move forward cautiously.”

Sen. Andy McElhany, R-Colorado Springs, said he thinks the state must examine those costs closely before increasing the standards imposed by Amendment 37, approved by voters in 2004.

“There’s been no cost-benefit analysis done,” McElhany said. “I hate to see the state rush headlong into this much of a financial commitment, particularly for our citizens who will ultimately have to pay the cost in the form of higher electric bills.”

But advocates of HB1281, which includes the increased renewable energy standards, say the costs and benefits of such production mandates have been studied.

“Saying there’s been no costbenefit analyses is just plain wrong,” Rep. Jack Pommer, D-Boulder, said. “There have been and that’s why companies are moving in this direction.”

Pommer also argued that, whether those studies are accurate or not, companies that invest in renewable energy generation will reward their investors. He points out that utilities don’t have to pay for the sun and the wind and that wind energy may already be less expensive than natural gas.

“Wall Street is saying that a company that sets itself up to knock off a cost of production is going to be financially set in the future,” Pommer said.

Nevertheless, McElhany said, the state had better be careful before imposing a mandate on utilities and their consumers. “I would like to hear further discussion about why we are doubling” the renewable energy standard, he said.

The full report is at www. environmentcolorado.org.

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Renewable energy receives co-op support

Morgan County Rural Electric Association in Fort Morgan expects to provide even more of its electricity from renewable energy resources in coming years.

MCREA joined other electric cooperatives from across Colorado in working with Gov. Bill Ritter’s office and Rep. Jack Pommer, D-Boulder, in crafting House Bill 07-1281, which will increase the percentage of electricity the state’s utilities must obtain from renewable resources. The bill was introduced in the Colorado House Feb. 6 and passed out of committee Feb. 13.

Specifically, this bill requires co-ops to obtain 10 percent of their electricity from renewable resources by 2020. The bill also notes that this requirement cannot raise rates for co-op members more than 1 percent.

This rate cap was an important part of the bill because electricity from renewable resources is more expensive than electricity from traditional coal-powered steam plants, according to an MCREA news release. While MCREA wants to incorporate more renewable resources, the co-op is also acutely aware of how increased rates can affect its members, the release stated.

Cost to members is the biggest reason the co-op has taken a position against another energy-related bill before the General Assembly, House Bill 07-1169 on net metering. This bill would require MCREA to provide net metering for any member who wants to install up to 500 kilowatts of renewable energy generation on the co-op system. Net metering is a system that allows an individual to generate his own electricity and be paid to add any excess electricity he generates back onto the utility’s system.

“While this concept sounds great, this particular bill on net metering would cost our members thousands of dollars because it requires the co-op to subsidize those who install these private systems,” said MCREA General Manager Fred Grantham. “This bill adds requirements that come with costs to the co-op.

“With the requirements this net-metering bill has, co-ops such as Morgan County would have to purchase and install thousands of dollars worth of complex and expensive meters, and Morgan County just completed a five-year, $5.2 million project to install new meters,” Grantham said. “We’d have to do it all over again.”

The bill’s design would also force the co-op to make fundamental and costly changes in its rate and billing systems. MCREA would incur substantial costs that would have to be spread to all of its members.

Colorado currently has a net metering law, which was passed in 2002. That law requires a similar buy-back of electricity, but provides more flexibility and better insures that there isn’t any subsidy to the individual selling the power back is more reasonable. The new net metering bill, which has been called one of the most radical and aggressive net metering bills in the country by engineers, increases Morgan County REA’s requirement by 20 times and puts the increased costs on all of Morgan County REA’s members, according to the news release.

Morgan County REA and other co-ops are meeting with legislators to help them understand that this co-op net metering bill will hurt many electric co-op members.

For more information on the specifics of the bill, visit HYPERLINK “http://www.crea.coop” www.crea.coop, the Web site of the Colorado Rural Electric Association. Click under Legislative Alert.

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"New energy future" touted in legislative package

By Jeri Clausing
Denver Post Staff Writer

Gov. Bill Ritter and Democratic legislative leaders lined up with farmers, environmentalists and utility and labor lobbyists Wednesday to tout a renewable energy package they say will launch a new economy in Colorado.

Republicans and representatives of rural electric cooperatives, meanwhile, stood in the back of the room, accusing the Democrats of advocating higher utility bills and onerous mandates on rural cooperatives.

The package includes requirements that utilities upgrade and build new transmission lines, produce more electricity from alternatives sources like wind and solar, and provide credits for businesses, farms and households that produce more energy than they consume.

"What we are going to put before you today is the beginning of Colorado's realization of its great potential," said Senate President Joan Fitz-Gerald, D-Golden.

House Majority Leader Alice Madden, D-Boulder, said, "We're literally embarking on a new energy future for Colorado."

Ritter, who has made renewable energy the cornerstone of his first year's agenda, said the policies will promote "great economic development prospects for the state" and energy independence for the country.

Republicans, however, questioned their methods.

"Today we saw talk up there from the Democrats willing to pass price increases on to consumers," said Rep. Cory Gardner, R-Yuma.

He said rural co-ops would be hit the hardest under a proposal being drafted by Rep. Jack Pommer, D-Boulder, that is expected to eliminate some of their exemptions to alternative energy production requirements.

"The devil is in the details," said Ray Clifton, executive director the Colorado Rural Electric Association, who said he has been meeting with Pommer about the impact such mandates would have on co-ops' ability to provide affordable electricity.

More than a dozen bills are expected from both sides of the aisle dealing with renewable energy initiatives. Two key proposals from Democrats would require utility companies to upgrade their transmission lines to accommodate wind power and a plan to double by 2020 the amount of renewable energy they produce, from 10 percent to 20 percent.

It costs about $750,000 to $1 million a mile to convert the lines, Fitz-Gerald said, but utility companies would be able to pass along the costs to consumers as they are being built.

She said Xcel Energy, which backs the bill, has estimated the increases for its customers would be about one-half of 1 percent, or about 31 cents on the average bill of $58. Xcel customers already pay about six-tenths of a percent to fund renewable initiatives mandated by Amendment 37.

"We're talking about really reinvesting in our future," she said.

But Republicans like Gardner said the state should look at alternatives such as tax incentives and tax credits to promote investment in renewable energy, rather than policies that mean rate hikes.

"Someone has to look out for the consumer in all of this. I think our new governor in particular has to be careful that he doesn't become so enamored of alternative energy that he loses track of his responsibility to the rate-paying public," Senate Minority Leader Andy McElhany, R-Colorado Springs, said in a statement.

Environmental groups, family farmers and construction unions, however, lined up to back the proposals, which include a measure that would "reverse" the dial on the electric meter by giving credit to farmers and others who produce more power than they use.

Will Coyne, program director for Environment Colorado, said the package was years in the making: "Today our state leaders have set an incredible plan in motion."

Staff writer Jeri Clausing can be reached at 303-954-1555 or jclausing@denverpost.com.

DenverPost.com - "New energy future" touted in legislative package - www.denverpost.com/...

Democrats pushing renewable energy bills

The Denver Business Journal

Calling it an "historic" day, Colorado's Democratic leadership rolled out its renewable energy package Wednesday, with proposals ranging from grants to putting wind turbines on schools to upping the amount of renewable energy used by the state's big utilities to 20 percent by 2020.

"This is the beginning of Colorado's realization of its potential," said Senate President Joan Fitz-Gerald, D-Coal Creek Canyon.

At least 12 bills will be put forward, said House Majority Leader Rep. Alice Madden, D-Boulder.

"We're literally embarking on a new energy future for Colorado," Madden said.

The goal is to diversify the state's energy sources beyond fossil fuels such as coal and natural gas to domestic renewable resources that offer economic and national security, said Gov. Bill Ritter.

"We have the resources, we have the intellectual capacity to literally be the nation's capital of renewable energy," Madden said.

But Senate Minority Leader Andy McElhany, R-Colorado Springs, later issued a response calling for caution.

"Coloradans, of course, would welcome new sources of reliable, renewable energy," McElhany said. "The big question is how much will it cost consumers? .... Our new governor, in particular, has to be careful that he doesn't become so enamored of alternative energy that he loses track of his responsibility to the rate-paying public."

Top on the "to-do" list is a bill, sponsored by Rep. Jack Pommer, D-Boulder, to boost the renewable energy used by the state's largest utilities to 20 percent by 2020. Pommer said the bill is still being discussed but is expected to be introduced next week.

Pommer said some details are hazy, but the bill is expected to cover investor-owned utilities, municipally owned utilities and rural electric associations. "Renewable" energy is expected to be defined as wind, solar and biofuel power -- not new hydroelectric power.

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Bill Ritter to take state's reins today

By Joe Hanel | Herald Denver Bureau

DENVER - Bill Ritter takes office as Colorado's 41st governor today, promising action this year on renewable energy.

The week’s events

Today, 11 a.m.: Inauguration of Gov. Bill Ritter, Lt. Gov Barbara O’Brien, Attorney General John Suthers, Secretary of State Mike Coffman, Treasurer Cary Kennedy.

Wednesday, 10 a.m.: Legislature starts its 120-day session.

Thursday, 11 a.m.: Ritter’s first State of the State speech at the Legislature.

Friday, 5 p.m.: Inaugural ball, downtown Denver.

Saturday, all day: Ritter-O’Brien train tour from Greeley to Pueblo.

Legislators begin their four-month session Wednesday, a day after Ritter is sworn in on the steps of the Capitol. Democratic leaders have embraced Ritter's campaign pledge on energy, and lawmakers also will debate education reform and the state's strict new ethics law.

House leaders are promoting a bill by Rep. Jack Pommer, D-Boulder, to double the amount of renewable electricity used in Colorado by 2015. In 2004, Colorado voters passed Amendment 37, which requires 10 percent of the state's electricity to come from renewable sources, such as wind and solar. Smaller rural utilities - such as La Plata Electric Association - were exempt from Amendment 37.

Pommer's bill would require 20 percent renewable electricity by 2015, and House Majority Leader Alice Madden wants it to apply to all the state's utilities. Utility companies fought Amendment 37, although Xcel, which serves the Front Range, has now embraced it and is on target to meet the requirements years ahead of schedule.

Since Amendment 37 passed, more wind farms have been built on the Eastern Plains, and solar power plants are being planned in the San Luis Valley.

Other bills would create incentives for homeowners to use wind and solar power, and install windmills at schools.

Ritter and his fellow Democrats also have plans for reforming the traditional energy industry. On Monday, Ritter told Colorado Public Radio that the state is approving too many oil and gas drilling permits. Colorado set a record in 2006, with 5,904 drilling permits approved.

Rep. Kathleen Curry, D-Gunnison, wants to remove responsibility for public health from the Oil and Gas Conservation Commission and give it to the Department of Public Health and Environment. Last week, Ritter appointed Jim Martin, the head of the environmental group Western Resource Advocates, to lead the health department.

Curry and Sen. Jim Isgar, D-Hesperus, also want gas companies to reveal more information about how much gas they produce, to make sure royalty owners and the state's tax coffers are getting their fair share.

On the ethics front, business will be done differently at the Capitol this year thanks to Amendment 41, which bans lobbyists from giving anything of value to lawmakers, including meals. The amendment sets up a strict code of ethics that applies to all government employees. Attorney General John Suthers said in December that it would prohibit a university professor from receiving the Nobel Prize, because no government employee can accept a gift of more than $50 from someone who isn't a close friend.

The amendment's authors are working with legislators to craft a bill that interprets the amendment, but senior Republicans warned Democrats not to stray from the plain language of the amendment.

"Any attempt to dilute the amendment through 'implementing legislation' would invite contempt from voters, and rightly so," wrote Senate Minority Leader Andy McElhany, R-Colorado Springs, and House Minority Leader Mike May, R-Parker.

Education politics also will change under the Democratic government. There is no talk about vouchers for private schools, a favorite conservative idea, said Sen. Sue Windels, chairwoman of the Senate Education Committee.

She is backing a bill to create a "P-16" task force, to study sweeping education reform from preschool through college. The commission would not propose a plan this year.

Windels also wants money for 4,000 new preschool spots for at-risk children.

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Democrats lay out energy bills

By Gargi Chakrabarty, Rocky Mountain News
December 16, 2006

Democratic lawmakers will introduce a slew of bills in the 2007 General Assembly to propel Colorado into becoming the "renewable energy capital of the world."

Legislation to double the state's renewable energy standard by 2015, mandate the use of ethanol in 10 percent of all transportation fuel - except jet fuel - by the end of next year, offer incentives to biofuel crop farmers and boost the number of transmission lines by allowing utilities to recover the money from ratepayers during construction are in the pipeline.

Renewable energy advocates say with the Democrats in control of the governor's office as well as the state Senate and House, the dozen or so bills - three times the number introduced last year - have a good chance of being signed into law.

Gov.-elect Bill Ritter has said his administration will kick-start a new energy economy aimed at reducing the nation's dependence on foreign oil.

"The top three priorities for us are education, health care and renewable energy," said House Speaker Andrew Romanoff, D-Denver. "Of these, renewable energy is the one ready for prime time, and we are ready to roll out a package of proposals to make Colorado the renewable energy capital of the world."

A bill that doubles green power - electricity generated from the sun, wind and plant and animal waste - to 20 percent at Colorado's top utilities by 2015 will be introduced early in the session. The bill likely will be sponsored by Rep. Jack Pommer, D-Boulder.

Amendment 37, the mandate approved by voters in November 2004, requires utilities to get only 10 percent of their electricity from renewables by 2015.

Xcel Energy, Colorado's biggest utility, is on track to become compliant with the 10 percent mandate by 2008. It's adding 775 megawatts of new wind farms to its system, on top of the existing 282 megawatts. Since wind blows intermittently, Xcel estimates 1 megawatt serves about 330 households.

"Since Xcel is ahead of the schedule, we wanted to be more ambitious and try and double the standard," Romanoff said.

Xcel collects six-tenths of 1 percent of the electric portion of a monthly bill from ratepayers, an average of 36 cents a month, to pay for the solar and wind projects.

It's not clear how much doubling the portfolio would cost customers.

"There will be a continuing debate over the cost of all resources, and there will be those who will argue that costs are increased on consumers when government mandates distort the market," said Jim Sims, a Republican lobbyist who runs the Golden-based Western Business Roundtable. "What sometimes gets lost in the debate over renewable build-out is the transmission side of the coin, and in Colorado there are serious impediments to transmission."

Senate President Joan FitzGerald will introduce a bill to boost the construction of electric transmission lines. Transmission has lagged the rapid construction of new wind farms in the past couple of years.

Xcel Energy supports the proposal. The utility has downsized or backed off several wind projects because of insufficient transmission.

The bill will allow utilities to recover the cost of new lines or upgrades from ratepayers before the project is complete. Although the new lines will be used for all power plants, including coal and natural gas-fired plants, the focus will be to connect wind farms on the eastern plains.

"The bill will facilitate the building of transmission and cost recovery upfront," FitzGerald said. "Otherwise, there is no incentive to build if cost recovery lags far behind."

Sen. Gail Schwartz, D-Snowmass Village, likely will introduce a bill to map renewable energy areas and transmission zones in the state.

Doug Carter, vice president of development at Invenergy said bureaucracy might actually slow down building of new transmission lines. The company is building a 75-mile-long line to connect its wind farm near Peetz to Xcel's grid near Brush.

"I think the market can work out the relationship between wind farms, utilities and landowners and come up with quicker solutions," Carter said.

Brandon Shaffer, a Democratic senator from Longmont, plans to introduce a bill that will mandate that 10 percent of all transportation fuel sold in Colorado except jet fuel must contain 10 percent ethanol by the end of next year. To help reach the goal faster at no cost to taxpayers, the bill will offer higher credits to producers of E-85, biodiesel and cellulosic ethanol. E85 is a blend of 85 percent ethanol and 15 percent gasoline; cellulosic ethanol is produced from corn stover or switchgrass.

Schwartz also will sponsor a bill that provides incentives for farmers growing canola, sunflower and other energy crops - especially in the San Luis valley - used to produce biofuels. Incentives to biofuel blenders also are being discussed.

"The idea is to create opportunities for individual homeowners, farmers or ranchers to raise the crop, have production of biofuels in place and integrate that with fuel distribution," Schwartz said. "Colorado needs to catch up to become a leader in the (biofuels) area."

Bills likely to be introduced in '07 session

• Renewable electricity: Proposal would double Colorado's renewable energy portfolio to require utilities to get 20 percent of their electricity from renewable sources such as the sun, wind, and plant and animal waste by 2015. The current mandate, approved by voters in November 2004, requires top utilities to get 10 percent of their electricity from renewables by 2015. The measure likely will be sponsored by Rep. Jack Pommer, D-Boulder.

• Biofuel: Proposal would require 10 percent of all transportation fuel sold in Colorado, except jet fuel, to contain 10 percent ethanol by the end of 2007. Offer credits to producers of E-85, a blend of 85 percent ethanol and 15 percent gasoline, biodiesel and cellulosic ethanol to reach that mandate faster at no cost to taxpayers. Offer incentives to producers of canola, sunflower and other crops to boost rural economies and increase production of biofuels. The measures will be sponsored by Sen. Brandon Shaffer, D-Longmont, Sen. Gail Schwartz, D-Snowmass Village, and Rep. Cory Gardner, R-Yuma.

• New transmission: Proposal would develop new transmission lines or high-voltage power lines that carry electricity from generating stations to substations before it's delivered to homes and businesses by allowing utilities to recover the cost upfront from ratepayers. Map the state to figure out areas that would support wind and solar energy projects and define transmission corridors that could help bring power from projects in rural areas to towns and cities. Those measures, supported by Xcel Energy, will be sponsored by Senate President Joan FitzGerald, D-Coal Creek Canyon, and Sen. Gail Schwartz, D-Snowmass Village.

• Carbon sequestration: Proposal would finance a study by Colorado State University to map Colorado's soil and farming practices to locate areas that are suitable for capturing carbon from the atmosphere and sequestering the polluting gas in soil. Supported by farmers and corn growers, the bill helps farmers earn money by trading the carbon credits in the Chicago Climate Exchange or other trading platforms.

• Gas savings program: Proposal would direct utilities that deliver natural gas to launch energy-saving programs, including offering customers rebates for installing energy-efficient, natural gas appliances. The bill would allow natural gas utilities to levy a surcharge, or fee, on residential and commercial customers to pay for the programs. A similar bill was vetoed by Gov. Bill Owens in 2006. Establish building energy codes to increase the energy efficiency of new buildings. The bills likely will be sponsored by Rep. Claire Levy, D-Boulder.

• Clean energy: Proposal would create a Clean Energy Fund to promote research and development of renewable technologies and biofuels. The bill likely will be introduced by Rep. Bernie Buescher, D-Grand Junction.

chakrabartyg@RockyMountainNews.com or 303-954-2976

Note created January 3, 2007

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