Black Hills Energy pulling plug on solar program in southern Colorado

Black Hills Energy, which serves Pueblo and 52 towns and cities in southern Colorado, is set to pull the plug on its solar panel incentive program. The Rapid City, S.D.-based utility is proposing cutting its current program by about 75 percent, according to a renewable energy plan filled with the Colorado Public Utilities Commission. Low natural gas prices make adding renewable energy sources uneconomical, said Christopher Burke, vice president for Colorado utility operations. "This is a pretty good punch in the gut," said JD Johnson, owner of SolStore, a Pueblo-base solar installer. "We are just looking for some consistency." The move by Black Hills comes after Xcel Energy, the largest electric utility in the state with 1.4 million customers, trimmed its Solar Rewards program. As investor-owned utilities, Xcel and Black Hills are required by state law to generate 30 percent of their electricity from renewable sources by 2020. Xcel says that it will meet the standard in 2018. Black Hills gets 12.5 percent of its power from renewable sources and will file another renewable energy plan in 2015. "We will get there," said Burke. In 2010, Black Hills, which serves 94,000 Colorado customers, suspended its solar rebate program, sparking criticism from some PUC commissioners and negotiations between the utility and the solar industry. In a settlement, Black Hills agreed to provide incentives for almost 1 megawatt of projects in 2011 with a comparable number of installations this year, said Neal Lurie, executive director of the Colorado Solar Energy Industries Association, a trade group. The Black Hills program offers a direct rebate up to $3,000 for the cost of the system and a 9.5-cent credit for every kilowatt-hour put onto the grid by a small residential installation, for a nine-year period. Under Black Hills' proposal, the utility would add no new capacity but take 238 kilowatts of remaining capacity from the settlement for use in 2013 and 2014. The solar energy industry association's Lurie said he hopes continuing talks with the utility will lead to a larger program. "The low natural gas price has changed the business model," said Black Hill's Burke. "It has made it a lot less cost effective to incorporate renewables in our portfolio, especially solar which is the most expensive." Black Hills recently spent $487 million on two new gas-fired power plants in Pueblo and received PUC approval for a $10.5 million rate increase. That boosted the average monthly residential bill by $17.50, a nearly 5 percent increase. "With the price of electricity going up people are looking for alternatives," said SolStore's Johnson. "Black Hills is taking one of those away." Read more: Black Hills Energy pulling plug on solar program in southern Colorado - The Denver Post http://www.denverpost.com/breakingnews/ci_21385680/black-hills-energy-pulling-plug-solar-program-southern#ixzz24QxKQMU3 Read The Denver Post's Terms of Use of its content: http://www.denverpost.com/termsofuse