The state’s agriculture industry is up in arms over a bill that’s expected to increase electricity costs for rural users if it continues its speedy trek through the state legislature and is signed into law.
Senate Bill 252 would require Colorado’s rural cooperative utilities to generate 25 percent of their electricity from renewable energy by 2020 – a sharp increase from the existing 10 percent mark they’re required by state law to hit by 2020.
The bill, introduced during the first week of April, passed in the Senate by an 18-17 vote, and passed in the House on second reading late Friday.
Representatives of Tri-State Generation and Transmission Association, which provides electricity to 18 rural cooperatives in Colorado and 26 co-ops in other states, said if the bill becomes law, putting in place the required infrastructure and taking other steps would cost anywhere from $2.5 billion to $4 billion.
Those added costs would have to be passed on to their electricity buyers – in the end, a 19 to 20 percent increase in price by 2020, above and beyond any other annual increases.
That could add up quickly for some rural electricity users, particularly dairymen.
Milk producers’ operations require substantial amounts of power to operate their milking parlors and milk-cooling systems, and, unlike producers of other commodities, dairymen take a milk price from the federal government rather than set their own, so they can’t pass on any increases in input costs to consumers.
“I totally understand the push for clean energy, and why it’s a good thing, but it has to be done in an economically feasible way,” said Gege Ellzey, an Eaton-area dairy farmer and former Weld County Farm Bureau president. “We basically get the same price for milk here in Colorado as everyone else around us. If other states aren’t doing this and their electricity costs are lower than ours, that really puts our local industry at a disadvantage.”
Ellzey said she spent about $20,000 on electricity last year for her 200-head operation.
Those costs likely pale in comparison to those of the much larger dairies across the area – some of which have as many as 5,000 head.
Widespread drought last year reduced crop production and increased feed costs, and, with milk prices set where they are now, some dairies are already struggling to keep their heads above water.
In a region that needs 50,000-plus additional cows to meet the growing milk demands of a new Leprino Foods cheese-processing plant in Greeley, local officials are wanting that expansion to be a smooth process, and added increases in electricity costs aren’t welcome.
“This would just be terrible for the dairies around here,” said Weld County Commissioner and Platteville-area farmer Doug Rademacher, who added that Weld County’s five-member Board of County Commissioners has spoken out against Senate Bill 252. “It would really be disastrous for all of ag. A farmer told me the other day this could increase his electricity costs for (groundwater) pumping by about $8,000 per month.”
The 25 percent renewable energy standard for rural electricity coops would put Tri-State closer in line with other energy providers.
Xcel Energy, for example, set a voluntary goal of using 30 percent renewable energy by 2020.
But Xcel is a public company that has investors and is guaranteed a rate of return on investment, while cooperatives, like Tri-State, depend on fees from their members, among many other differences in business models.
A number of farmer and rancher organizations, including the Colorado Farm Bureau, are opposing the bill.
Like Ellzey, Nick Colglazier of the Colorado Farm Bureau said he and his organization are in favor of using renewable energy, but said upping the 2020 standard from 10 percent to 25 percent would put too much of a burden on rural electricity users.
He further expressed disappointment that the bill’s sponsors – Senate Majority Whip Gail Schwartz, D-Snowmass, and Senate President John Morse, D-Colorado Springs – didn’t reach out to the ag community when drafting the bill.
Dave Lock, senior manager of government relations for Tri-State, said his company is ahead of pace in meeting its 10 percent renewable energy mark by 2020.
Tri-State is now producing about 7 percent of its electricity through wind and solar projects, and also gets about 12-18 percent of its energy through hydropower – although that’s not counted toward its state-mandated 10 percent mark, nor would it count toward its 25 percent mark, if Senate Bill 252 is signed into law.
The existing 10 percent mark was made law in 2007.
Lock said the legislative process in passing that standard was done with communication from all sides.
“That didn’t happen this time,” Lock said. “All of the sudden it was there in front of us. We didn’t get to provide any input, and now we’re just left fighting against it.”