Wind farms in Kansas, Nebraska and California will play a role in Colorado Springs Utilities’ compliance with a voter-approved mandate on renewable energy.
But homes and businesses in Colorado Springs won’t be getting electricity produced by harnessing wind in those places. Instead, renewable energy credits will be logged into Colorado Springs Utilities’ books.
The city recently inked a deal with Community Energy Inc., in Wayne, Pa., for $3.9 million to ensure that 10 percent of the city’s energy portfolio comes from renewable sources such as wind, biogas, biomass and hydropower.
Amendment 37 was approved by voters statewide, although it failed in El Paso County. It mandates that utilities use renewable energy for a portion of total retail sales.
The law calls for renewable energy to account for 3 percent by 2007, 6 percent by 2011 and 10 percent by 2015.
As a municipal utility, Springs Utilities is exempt from the requirement but has chosen to follow the rules, Drew Rankin, utilities energy supply general manager, said.
Colorado Springs Utilities already is at the 10 percent level by buying wind and hydro power and generating energy from its hydroelectric plants. Some of that power, though, doesn’t meet the technical requirements of the law, Rankin said.
Because surveys show Colorado Springs Utilities customers’ top three concerns are cost, reliability and environmental considerations, the city looks for the most economical solution.
Energy from renewable sources is more expensive to produce than from fossil fuels, leading the city to obtain cred- its instead of investing in its own wind farm in the next 10 years, Rankin said.
The city paid $2.49 per megawatt hour for the credits, Rankin said.
“Our best strategy for our customers is $2.49, versus $55 (to buy wind power) from someone else, versus $95 to build it (wind farm) ourselves,” he said, noting it can be costly and difficult to transmit energy from remote wind farms.
Credits are a smart way to go, he said, because besides being low in cost, they allow flexibility.
Rick Gilliam, Amendment 37 author and senior energy policy adviser at Western Resource Advocates, Boulder, said buying credits is an acceptable way to comply.
“It still has the same effect of implementing renewable energy,” he said, because buying credits supports green power by pumping money into companies that develop projects.
But Gilliam took issue with the city’s estimates for wind generation. He said the $95 to $100 per megawatt hour estimate is “way out of line.”
“Most utilities are able to build wind at $40 to $45 today,” he said, which is cheaper than building a new coal plant, at about $50 per megawatt hour, he said.
Rankin said the city is studying the viability of burning wood products and biogas.
by Pam Zubeck
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