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Tri-State: $1 billion cost to meet Colorado’s renewable-energy goal  

Credit:  Cathy Proctor, Reporter- Denver Business Journal | July 10, 2013 | www.bizjournals.com ~~

Tri-State Generation and Transmission Association, the second-biggest electricity generator in Colorado, estimates it will have to add 430 megawatts of wind-based power on its system – at a cost of $1 billion – to meet the state’s new rule that it have 20 percent of its power from renewable energy resources by 2020.

The $1 billion figure covers the cost of new wind farms, natural gas power plants to provide power when the wind isn’t blow and transmission lines, Dave Lock, Tri-State’s senior manager for government relations told a new committee Wednesday.

The committee was convened by executive order from Gov. John Hickenlooper when he signed Senate Bill 252, which will raise the renewable energy goal from 10 percent by 2020 to 20 percent for Westminster-based Tri-State, which serves 18 rural cooperatives across Colorado, and the Intermountain Rural Electric Association (IREA), which provides power to customers south of Denver.

Hickenlooper signed Senate Bill 252 on June 5 over the protests of representatives from the state’s rural electric cooperatives, business interests, agriculture interests, and some rural legislators.

The same day, he signed the executive order convening the committee to review the law and suggest tweaks, if necessary, ahead of the 2014 legislative session.

The committee’s first meeting was Wednesday. A second meeting, lasting from 9 a.m. to 5 p.m., is scheduled for Aug. 7.

The committee has a Nov. 1 deadline to submit its report to the head of the Colorado Energy Office, who will advise Hickenlooper on suggested changes to the law.

The committee will tackle questions about whether the 20 percent goal by 2020 is feasible, and if not, what is feasible, said Jeff Ackermann, the head of the Colorado Energy Office.

“If it’s not feasible, then what is feasible,” Ackermann asked the committee. “What can be done by 2020, or when can the 20 percent be reached?”

Ackermann told the committee he hoped its work didn’t focus simply on whether SB 252 is a good law, but rather how the goals in the law might be reached.

“This is a policy analysis,” he said. “The questions are whether the percentage and timeline are feasible or reasonably achievable, not is it good or bad policy,” Ackermann said.

Colorado Attorney General John Suthers, a non-voting member of the committee, said that “in a perfect world” the committee would have been convened to reach consensus on the issues a year ago – before SB 252 was file at the Legislature. But given that the bill was introduced, passed, and signed by Hickenlooper, “we have to deal with reality,” Suthers said.

The committee also will look at how the law’s 2 percent rate cap – the limit that utility bills not go up any more than 2 percent in order to pay for the costs associated with meeting the mandate – might work.

Lock said Tri-State doesn’t know if its $1 billion cost estimate fits under the 2 percent rate cap – because the law addressed “retail” rates, set by member cooperatives, not the wholesale rate that Tri-State charges its members.

“We’ll have to find out what our coop members think they might charge in 2020, and then figure out what 2 percent of that is, and then what would be feasible to build with that,” Lock said.

John Salazar, Colorado’s agriculture commissioner and a former congressman, said his focus is on how the law will impact agriculture interests in the state, and added, “I don’t think this can be done by 2020.”

Salazar suggested that the deadline by moved five years, to 2025, and that there be exemptions for farmers and ranchers who pay high electricity bills to run pumps to irrigate their land.

Committee member Mark Arnusch, who owns an 1,800-acre farming in Prospect Valley, about 35 miles northeast of Denver, said current electricity rates already are too high.

“I can’t afford my electricity rates now,” Arnusch said. “We need to think about reducing that cost. We’re matching the crop we grow to the amount of water that we can afford to pump.”

Bruce Driver, an attorney with Boulder-based Western Resource Advocates, an environmental advocacy group, said he was interested in hearing from representatives of Tri-State and IREA, the two utilities targeted by SB 252, on why they believe their organizations can’t meet the new goals.

“I want to understand what problems they have in some detail,” Driver said.

After the meeting, Mike Kopp, IREA’S manager of corporate affairs, said his cooperative’s problem with compliance is that the utility owns about 25 percent of Xcel Energy Inc.’s coal-fired Commanche power plant in Pueblo, but that the utility buys all the rest of its power from Xcel and the Western Area Power Administration.

Under those purchase contracts, IREA will be able to meet the 20 percent by 2020 standard in the year 2020, due to its purchase of renewable energy credits, but whether the cooperative can comply with the standard after that is unknown, Kopp said.

“We’re interested in low-cost, and reliable energy, but we’re not driving the bus [on our power supplies],” Kopp said.

Source:  Cathy Proctor, Reporter- Denver Business Journal | July 10, 2013 | www.bizjournals.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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