Monday, November 08, 2004

Colorado Voters Overwhelmingly Approve Renewable Energy Portfolio Standard

Colorado voters approved a 10% renewable energy portfolio standard (RPS) last Tuesday, becoming the first state in the nation to establish a renewable energy mandate for energy companies through a direct ballot initiative. Amendment 37, which requires energy companies to obtain 10% of their energy from renewable sources, passed with over 65% of the vote. Colorado joins 17 other states that mandate levels of renewable energy use through an RPS. The Rocky Mountain News has a quick overview of the initiative:

What it does: Requires utilities to get a portion of electricity from wind, solar and plant or animal waste, beginning with 3 percent in 2007 and increasing to 10 percent by 2015. Four percent of the renewables should be solar sources.

What does it mean to consumers: Customers won't see any immediate rate hike related to the amendment. And depending on the type and size of projects over the next 20 years, utilities can charge a maximum of 50 cents per month to residential customers.

What it means for utilities: Xcel is already set to add 500 megawatts of wind power through 2005. But it needs to add some solar projects to comply with the bill. Xcel estimates the solar requirements alone will cost $355 million over the next 20 years.

Utilities have pledged to meet the goal, and energy companies are getting the jump on renewable energy projects. Xcel is currently reviewing 17 renewable energy proposals, including a$82 million, 69-megawatt wind farm.

But according to some reports, energy companies are also actively looking for loopholes to limit the financial impact of the standard. The same interests that were unsuccessful in blocking enactment of the RPS, have now turned their focus towards the Colorado Public Utilities Commission, which is working on rules to implement the RPS. A number of significant questions remain to be addressed, including:
  • What happens if the costs of implementing the Standard exceed the 50-cent limit established for cost recovery from the average residential consumer?
  • How will utilities trade renewable energy credits if the can't or don't generate the power themselves?
  • What penalties will be imposed if utilities fail to meet the standard?
The RPS will go into effect on December 1, 2004, and the PUC has until April 2005 to start working on rules, which must be in effect by March 31, 2006.

The Wind Turbine Blog has more on the Union of Concerned Scientists reaction to Colorado's approval of Amendment 37. UCS has worked aggressively over the past several months to encourage adoption of RPS standards nation-wide.

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