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Rural co-ops reject proposed renewable standards

Rural electric co-ops say a bill to increase use of renewable energy sources will instead cause unaffordable spikes in electricity bills for their customers. On Monday, the Senate State, Veterans and Military Affairs committee voted along party lines to approve Senate Bill 13-252. The bill requires certain rural electric associations and co-ops to increase their use of renewable energy sources from 10 percent by 25 percent by 2020. The bill is now awaiting final action from the Senate.

SB 252 targets two cooperative electricity associations: Tri-State Generation and Transmission, and its 18 Colorado member co-ops; and Intermountain Rural Electricity Association (IREA). The bill doesn’t target them by name. It instead calls for higher standards for generation and transmission companies that provide wholesale electricity to its members; or cooperative electricity associations with more than 100,000 meters. Tri-State and IREA are the only two entities that fit those definitions.

Senate President John Morse (D-Colorado Springs) claimed increasing the renewable energy standard for rural electric providers will have a “profound” impact on air quality. The bill limits increases on utility bills to 2 percent to cover the higher costs, but opponents claimed that requirement lacks enforcement.

Currently, the state defines eligible renewable resources as solar, wind, geothermal, biomass and new hydroelectric power created prior to 2005. SB 252 adds two new sources: coal mine methane and a process for burning trash without oxygen, known as pyrolysis.

Supporters of SB 252 testified that the bill will create more jobs in the renewable energy industry. That included testimony from RES Americas, which operates wind farms throughout Colorado; wind turbine manufacturer Vestas, and several manufacturers of solar panels. Anna Giovinetto of RES Americas noted that increasing use of renewable energy results in more stable costs, and in other states that has not caused increased electricity costs. She also noted that while SB 252 places a 2 percent cap on increases in electric bills, use of fossil fuels has no such limit. SB 252 “levels the playing field” and creates clean energy jobs, she said. Mark Stacy of Iberdrola Renewables in Cheyenne, Wyoming, said that renewable energy provides new streams of revenue for ranching and farming families with only a land loss of 2 percent to the renewables’ footprint.

Ron Binz, a former Colorado Public Utilities Commissioner, said claims from Tri-State that SB 252 would cost the company $3 billion by 2020 were not believable. Binz said those figures are for the capital costs tied to building new natural gas plants or transmission lines and would be spread out over decades.

Morse asked the committee to amend SB 252 to clarify that if co-ops cannot keep to the 2 percent limit, they can reduce the renewable energy standard to stay under the 2 percent limit. The amendment doesn’t say how that would happen or for how long.

Tri-State G&T has 44 member co-ops in four states. Eighteen are located in Colorado, including Highline in Holyoke, KC Electric in Hugo, Morgan County REA, Poudre Valley REA, United Power in Brighton and Mountain View in Limon. Kent Singer of the Colorado Rural Electric Association said the co-ops serve 70 percent of the state’s land mass but only 25 percent of the state’s population, which he called “light density” and which means that costs are spread out over a much smaller customer base.

Co-ops are not opposed to renewable energy, Singer said, pointing to several wind farms already generating electricity for co-ops. Singer also claimed the sponsors never talked to CREA or Tri-State before introducing the bill; as a result, he said they don’t understand how the co-op system works. The 2 percent rate cap will likely be challenged in court, and Singer said that a suggestion that the Public Utilities Commission review rates for the co-ops would create a “nightmare.”

The capital costs cited by both sides on SB 252 comes from the need for new natural gas plants that would provide back-up power to cover solar and wind systems that can’t operate 24 hours a day, seven days a week. Richard Gordon of Tri-State said that they can only pass along these costs to their 18 Colorado members, not to member co-ops in the other three states served by Tri-State. Gordon also complained about the short time line for meeting the SB 252 requirement: six years. “We cannot meet the mandates in the time allotted,” he said.

Prompted by Harvey, several REA representatives said electricity bills for state-owned facilities would go up by tens of thousands of dollars annually. That includes prisons, state parks and Colorado Department of Transportation facilities. Sen. Greg Brophy (R-Wray) tweeted Thursday that the bill will cost the Wray school district $30,000 more per year for electricity; money that he said will come out of the classroom. Partial estimates collected by Harvey showed increased costs of more than $500,000 annually for state facilities, not including the prisons. That led Harvey to ask that the bill be sent to the Senate Appropriations Committee because of its state fiscal impact. The committee voted along party lines to reject that request.

The bill also got opposition from several farmers, Colorado Farm Bureau, Colorado Corn Growers and other agribusiness interests. Several Moffat County commissioners testified that SB 252 would pit rural Colorado against urban Colorado; Commissioner Tom Mathers called it a “direct assault on the ratepayers in rural Colorado.”

According to its sponsors, SB 252 is supported by Governor John Hickenlooper.