Colorado Coal

Colorado coal production in 2015 continues to fall after dropping to a 20-year low last year, state data shows. Much of the drop can be attributed to mining cutbacks at Peabody Energy’s Twentymile (Foidel Creek) Mine in Routt County and to a lesser degree at Bowie Resource Partners’ Bowie No. 2 Mine in Delta County. Statewide, 2015 production through August totaled 13.9 million tons, down from 15.5 million tons for the first eight months of last year. Production totaled nearly 40 million tons in 2004 and just under 23 million tons last year. Twentymile production fell to 2.5 million tons through August, from 4.9 million for the same period last year, according to the Colorado Division of Reclamation, Mining and Safety. The Bowie mine produced about 1.4 million tons, down from 1.8 million. Peabody Energy didn’t return requests for comment about the slowdown at Twentymile. The Steamboat Today newspaper in Steamboat Springs early this year quoted a Peabody spokesman as saying falling production at the mine was from declining demand from utilities because of moderate temperatures and constrained rail service. The state says Twentymile employs about 300 miners. It employed nearly 390 miners at the end of 2013. Bowie last year announced the layoffs of about 150 people after losing a contract to sell to the Tennessee Valley Authority. The TVA has been cutting back on its use of coal for power generation as a result of a 2011 agreement with the Environmental Protection Agency and other entities. TVA also has been sourcing coal from mines back East at a lower price because of cheaper transportation costs. In September, Bowie said it plans to lay off nearly 100 more people at the mine, leaving it with about 100 miners. It said it was making the cutbacks as it idles its underground longwall mining operation and takes an estimated year or so to prepare a new longwall panel for mining. But it has warned the layoffs could be permanent, as it continues to evaluate the market for the mine’s coal. That market has been challenging in Colorado and nationally because of everything from federal and state regulatory measures to competition from natural gas. The latest threat to coal comes from the EPA’s Clean Power Plan, which targets carbon emissions from power plants. Jeremy Nichols, with the environmental group WildEarth Guardians, noted that while a federal judge ruled in cases brought by the group that federal agencies failed to disclose air-pollution and
 climate-change impacts in approving expansions at three Colorado mines, production at those mines subsequently has risen. One of the lawsuits involved Arch Coal’s West Elk Mine and pertained to an area it had leased but not yet expanded into. The mine’s production is up slightly so far this year, at 4.1 million tons compared to 3.95 million for the first eight months of last year. Arch Coal recently said it continues to have success selling the higher-quality coal produced by the mine. However, Arch Coal has been struggling overall financially, losing $168 million in the second quarter of the year alone. The Colowyo Coal Mine between Craig and Meeker so far this year has produced 1.9 million tons, up from 1.6 million over the same period last year. The Trapper Mine near Craig produced nearly 1.5 million tons through August, compared to about 1.27 million tons for the first eight months of last year. The two mines supply the coal burned at Tri-State Generation and Transmission Association’s Craig Station power plant. A court ruling involving those two mines found fault with previous approvals of expansions by the mines based on Wild-
Earth Guardians’ concerns, and the ruling left the mines’ continued operations in question. The Interior Department recently cleared the way for Colowyo’s continued operations after a recently completed review of the expansion there, and Trapper has been able to keep mining while another such review begins. The Deserado Mine near Rangely produced 1.7 million tons through August, up from 1.1 million tons over the first eight months of 2014. The mine supplies the coal burned by Deseret Power Electric Cooperative’s Bonanza Power Plant in northeastern Utah. The future of that plant, and the mine, which is owned by Deseret and has no other customer, would be secured for the short term but left in doubt for the long term under a recent settlement proposal involving WildEarth Guardians, the Sierra Club and the Environmental Protection Agency. The environmental groups have agreed to drop challenges of an EPA permit issued for the plant in exchange for new pollution controls at the plant. The deal also places a lifetime coal-consumption cap on the plant unless it commits later to further pollution-control investments, a provision that could lead to the plant’s closure around 2030, Nichols estimates. The EPA has the settlement proposal out for public comment. WildEarth Guardians wants to see an eventual end to the federal government’s coal-leasing program because of the climate-change impacts. Nichols praised the federal government’s recent grants of $50,000 to Moffat County and some $1.2 million to the Montrose-based Region 10 League of Economics Assistance and Planning to work on diversifying their region’s economies so they’re less reliant on coal jobs. “We have an obligation to step up, to make sure that communities that are very dependent on coal can transition to be prosperous and sustainable as they lose that economic base,” Nichols said. Said Stuart Sanderson, president of the Colorado Mining Association, “It’s a sad commentary if the day arises that these self-reliant communities would have to rely on assistance from the very entity, government, responsible for those job losses and production declines in the first place.” He pointed to government policies like Colorado’s Clean Air Clean Jobs Act, which has resulted in more use of natural gas in power plants, and mandates in Colorado and elsewhere to produce some electricity from renewable sources. Renewables don’t pay royalties, unlike the coal industry, Sanderson said. The coal industry in Colorado paid nearly $41 million in federal and state royalties in 2014, and that’s money that goes to public schools, he said. The state puts total Colorado coal mine employment at about 1,450 people. Nichols said that according to news reports, just one wind turbine manufacturer, Vestas, employs about 3,000 people statewide, and overall, the wind industry in the state employs about twice that number. Sanderson said the National Mining Association estimated in 2012 that coal is responsible for about 21,000 jobs in the state, when associated manufacturing, transportation, utility and service jobs are counted. Sanderson said coal workers received an average of $122,000 in pay and benefits. “Can renewables equal that in rural Colorado?” Sanderson asked. But Nichols believe the costs of coal jobs and revenues are too high, with emissions from Colorado coal resulting in tens of millions of tons of climate pollution each year. That doesn’t even count the methane that is vented during coal mining. Methane is considered more potent than carbon dioxide when it comes to climate change. In 2013, Nichols said, the EPA estimated that methane pollution from just three mines in the North Fork Valley resulted in the equivalent of 1.3 million tons of carbon dioxide pollution.

Xcel Energy: Leading the Way in Reducing Emissions

In a changing utilities marketplace, Xcel Energy continues to lead the way among U.S. utilities in reducing carbon dioxide and other greenhouse gas emissions. Xcel Energy has achieved a significant milestone as the first U.S. utility to verify and register all of its greenhouse gas emissions data for seven consecutive years with The Climate Registry (TCR), a nonprofit organization that designs and operates voluntary and compliance-related greenhouse gas reporting programs throughout the world. "Xcel Energy has tangibly demonstrated its leadership and accountability over the years through its rigorous and high-quality greenhouse gas reporting,'' said David Rosenheim, executive director of TCR. "As countries from around the world gear up for the next U.N. climate conference in November, and the U.S. embarks on measures such as the Clean Power Plan, Xcel Energy should be commended for its vision and foresight in addressing climate and energy issues." Measuring carbon dioxide is complicated. Emissions can be measured at the power plant stack with monitoring equipment, but there are also emissions associated with other operations. "Xcel Energy pledged to begin reducing emissions in 2005, well before many other utilities in the country. Setting a standard to accurately measure these emissions was the first step in fulfilling our commitment," said Frank Prager, vice president, policy and federal affairs for Xcel Energy. Xcel Energy became a member of TCR in 2007 and worked collaboratively to establish consistent, transparent standards for calculating, verifying and publicly reporting all greenhouse gas emissions. "As a founding member of The Climate Registry, we contributed significant expertise and helped develop the protocol for counting emissions in the electric power sector, which ultimately helped us verify that we are meeting our goals," Prager said. Xcel Energy set a new clean energy record Xcel Energy set a new clean energy record Oct. 2 when wind energy supplied 54.3 percent of the power delivered to Colorado customers. This was the first time the company served more than 50 percent of customer daily load with wind for an entire day. ((Photo courtesy of Xcel Energy)) Xcel Energy uses TCR's protocol to annually report all of its greenhouse gas emissions, of which carbon dioxide makes up over 99 percent. The company has Climate Registered status for successfully measuring and reporting emissions from 2005 to 2011. It continues to work with TCR to verify and register emissions for 2012 to 2014. The emissions that Xcel Energy reports are comprehensive, including direct emissions from power plants, indirect emissions from the electricity purchased, and emissions from other parts of operations that are considered optional for reporting. All operations are covered, from supply chain to customers. Data is verified by third parties and reported on TCR's website. Reporting under TCR began as a voluntary effort. Xcel Energy now reports greenhouse gas emissions under the U.S. Environmental Protection Agency's mandatory reporting rule, as well as to local and state entities. It also publishes emissions in its annual carbon dioxide worksheet and corporate responsibility report and through CDP, formerly Carbon Disclosure Project. All reporting is based on data reported to TCR. Carbon-free energy With measurement comes management. Implementing a clean energy strategy, Xcel Energy is providing more carbon-free energy by modernizing power plants and energy delivery systems to reduce emissions including carbon dioxide. The company is midway through executing a major project for Colorado's Clean Air-Clean Jobs Act, passed in 2010. When complete, more than half of the company's coal-fueled generation in Colorado will be retired, replaced or retrofitted. This includes seven coal units since 2010, and in 2017, a fourth coal unit at Cherokee Plant in Adams County and the coal unit at Valmont Plant in Boulder County. Xcel Energy is set next year to more than triple its large solar capacity. Xcel Energy is set next year to more than triple its large solar capacity. This includes an agreement to purchase all the energy from the Comanche solar project in Pueblo, Colorado, which broke ground in August. It is the largest solar power plant east of the Rocky Mountains. ((Photo courtesy of Xcel Energy)) As of 2014, Xcel Energy's carbon dioxide emissions in Colorado are down 26 percent from 2005 levels and expected to fall to 35 percent by 2020. Companywide, Xcel Energy is ahead of what the EPA wants to achieve under the Clean Power Plan. Its early actions will help Colorado meet the Clean Power Plan requirements. "Reflecting on our clean energy efforts over the last decade, I am particularly proud of our ability to make this kind of progress and change, while keeping our prices competitive," said David Eves, president of Public Service Company of Colorado, an Xcel Energy company. Under the approved 2015-2017 electric rate plan, which includes recovery of nearly $1 billion of investments in the Clean Air-Clean Jobs project alone, overall rates are increasing about 1 percent each year on average. Renewable options Through its clean energy strategy, Xcel Energy is also providing a portfolio of clean energy options that customers want and value. As the largest utility wind energy provider in the nation, Xcel Energy has added vast amounts of wind energy and kept prices affordable and competitive. The company set a new clean energy record Oct. 2 when wind energy supplied 54.3 percent of the power delivered to Colorado customers. This was the first time the company served more than 50 percent of customer daily load with wind for an entire day. In addition to the wind power in the energy supply, the company offers customers the option to choose more wind energy for their homes or businesses through its Windsource program. About 41,000 residences and businesses participate statewide. Boulder accounts for around 14 percent of Colorado participation. Solar energy is growing in prominence as a renewable source. Xcel Energy continues to be a top utility for solar power capacity and this year is among the top 10 U.S. utilities in this category (Solar Electric Power Association). The company is adding economical, large solar projects to its energy mix, often referred to as utility-scale solar, while offering other solar solutions as well. "We are committed to solar energy and support a range of choices to meet different customer needs and interests," Eves said. Xcel Energy is set next year to more than triple its large solar capacity. This includes an agreement to purchase all the energy from the Comanche solar project in Pueblo, Colorado, which broke ground in August. It is the largest solar power plant east of the Rocky Mountains. It will produce more than 300 gigawatt-hours of energy a year - enough to supply the energy needs of about 30,000 Colorado homes and avoid the emission of more than 478 million pounds of carbon dioxide. The company's Solar*Rewards program continues to see strong participation. There are around 25,000 rooftop and business-sited systems statewide. Boulder accounts for about 13 percent of Colorado participation. And Xcel Energy's Solar*Rewards Community program, or solar gardens, which began here in Colorado, is growing. Solar gardens offer an alternative to rooftop solar panels, allowing neighbors, nonprofits and businesses to share access to a centrally-located community solar installation. Last month, Xcel Energy announced the winning bids for nearly 30 megawatts of solar projects - including a new 500-kilowatt project in Boulder County by garden developer Clean Energy Collective and a partnership with the city of Boulder, Boulder County and Boulder affordable housing providers. This is in addition to two, 500-kW Boulder County community solar gardens currently installed. "We know customers have many expectations today, not only of cost and reliability, but also of having more options, more control, more convenience and more opportunities to communicate with their energy provider," Eves said. "The utility industry is changing, and adapting to those changes is a key area of focus for Xcel Energy."

New report blames state’s slowing solar sector on fossil fuel groups

After years of rapid growth, Colorado’s once red-hot solar energy industry has faded recently, according to a new report from Environment Colorado, which blames fossil fuel-funded think tanks and utilities for raining on the state’s solar parade. According to “Blocking the Sun: 12 Utilities and Fossil Fuel Interests That Are Undermining American Solar Power,” Colorado’s solar power capacity increased 44 percent a year from 2010 to 2013, but then dropped dramatically between 2013 and 2014, knocking the state from 7th to 10th in terms of solar power capacity per capita in the United States. “Despite the fact that we have one of the best solar assets in the country, Colorado’s market share is shrinking nationwide due to weak utility support and uneven legislative progress,” said Alex Blackmer, president of the 5,000-member Colorado Renewable Energy Society, on a conference call with reporters late last week. Citing 2013 Gallup polling showing 76 percent of Americans would like to see more of an emphasis on solar energy, including 68 percent of Republicans, Colorado solar advocates expressed frustration at the industry’s backwards slide in the state and pointed to big-money special-interest groups in the report. “The Koch brothers’ front group Americans for Prosperity has been working in the shadows to undermine solar power here in Colorado, and our report shows that they’ve been using the same playbook across the country,” said Environment Colorado’s Katie Otterbeck. AFP-Colorado Director Michael Fields said the criticism was off base. “It's not the proper role of government to play favorites with politically connected companies," Fields said in an email. "We support free market solutions to improve our state's energy choices without the unfair advantage of government funds being doled out to companies in hand-picked energy sectors.". Besides the climate benefits of renewable energy, Blackmer pointed to the continued job growth of the solar sector even with the recent decline, noting the solar industry currently employs more people in Colorado than coal mining. Statistics vary on the number of Colorado solar jobs. The nonprofit Solar Foundation in 2013 cited 266 companies employing 3,600 direct solar workers in Colorado, mostly in manufacturing and installation. However, the Solar Energy Industries Association, claims that in 2014 there were 388 solar companies employing 4,200 people in Colorado. By comparison, Stuart Sanderson, president of the Colorado Mining Association, told The Colorado Statesman there are 21,000 indirect jobs associated with coal mining in Colorado, 6,200 direct jobs and nearly 2,000 people actually working in the state’s coal mines. Coal production in Colorado ranks the state 11th nationally, and coal mine workers make average annual wages and benefits of $122,000. “To me, it’s not a question of competition amongst jobs,” Sanderson said. “The high-energy-cost community, such as wind and solar, they’re trying to displace fossil fuels, and I think every job is important.” State Rep. Mike Foote, an eastern Boulder County Democrat who represents the cities of Louisville, Lafayette and Longmont, said the vast majority of people in his district and around the state favor developing more renewable energy. But he expects Republicans will once again try to roll back the state’s renewable energy standard that was first approved by voters in 2004. “This year’s effort was marked by big money that was behind it,” Foote said of a bill that passed in the GOP-controlled Senate but failed in the Democrat-controlled House. “The special interests were flying in people from around the country to claim that we need to have less renewable energy, not more.” Foote said he expects foes of renewable energy to try again in the next legislative session beginning in January. Last year’s bill would have reduced the amount of renewable energy required from investor-owned utilities from 30 percent by 2020 to 15 percent, and it would have cut renewable sources for rural electric co-ops from 20 percent to 15 percent. With control of the two chambers split between Republicans and Democrats, Foote doesn’t anticipate being able to pass renewable-energy bills this coming session. “Mostly it was about playing defense against those type of rollback proposals, and I would anticipate the same thing happening again next year,” he said. Sanderson would not say if his trade association would support such rollback efforts, but he said the CMA frowns on energy-source mandates in general. “Overall, we opposed the mandated markets because Xcel Energy consumers would suffer the consequences, and so we generally oppose mandates for any source of energy, whether it’s renewable energy or natural gas,” Sanderson said. “Those are the sectors that have been the subject of much government largess in recent sessions.” Gina Hardin, executive director of the climate advocacy group 350 Colorado, said wind and solar pricing is increasingly competitive with fossil fuel forms of electrical generation. She pointed to a group called Fossil Fuel Free Denver that is trying to get the city off all fossil fuels for electrical generation by 2030. “Because of the stalling on the national and state level, some of the actions (on renewable energy) will have to be directed at local governments,” Hardin said.

Colorado utility looks to charge solar customers for energy they don’t use

The laws of supply and demand are straightforward. Prices reflect the interplay between what people want and how realizable what they want is. But in the world of utilities, nothing is simple – certainly not the prices consumers pay for electricity. That’s because utilities charge customers not only for the power that they use, but also for the grid that they maintain and the power that they generate. Because of this, the infrastructure choices made by a utility have a massive impact on what consumers see on their monthly statement. In Colorado, the Intermountain Rural Electric Association, a midsized cooperative supplier of energy, is an ideal example of a utility struggling to grapple with poor infrastructure choices. In an effort to become less reliant on natural-gas-based energy, IREA bet heavily on coal. In fact, it built an entire new coal-fired power plant in 2009. Since that time, the cost of natural gas has stabilized while the cost of operating a coal power plant appears set to spike, the result of various state and federal efforts to curb the use of coal. To compensate for its bad bet on coal, IREA is now seeking to adopt a new rate scheme designed to reduce the value of residential solar power. The nexus between a bad bet on coal and the need to undercut solar is not immediately apparent, but makes sense in light of what solar means to IREA’s business model. The value proposition of residential solar power – in the form of cells placed on roofs – is predicated not only on reduced consumption from the grid, but also on the surplus power those systems are able to push back onto the grid. Thus, the IREA loses twice when one of its customers installs solar panels. It sells less electricity from its coal plant and must credit customers for the power their solar systems generate. As solar becomes more popular, the cost of the IREA’s coal investment is spread among fewer customers. This is where supply and demand go out the window. To offset its bad investment in the coal plant, IREA is now seeking to foist a new rate regime on those customers with rooftop solar – charges that bear no relationship to the of the energy those customers use. The rate regime is based on what the IREA is calling a “load factor adjustment.” The plan is to calculate the load factor by looking at kilowatt hours, divided by the product of the customer’s peak demand and the number of billing days in a cycle. Using that formula, if a customer’s load factor falls below a certain threshold, that customer will be assessed a “demand charge.” Confused? You should be. In a sense, the IREA is seeking a rate plan that charges customers for what they don’t use. Yet the purpose of the rate formula becomes clear in light of the fact that the customers to be assessed a demand charge will largely be those with solar systems at their homes. Punishing early adopters of solar energy is bad policy, not only from the perspective of environmental concerns, but also in terms of future grid sustainability. Should the rate regime be adopted, the losers in the deal will count among their number more than IREA’s solar customers. The chilling effect on innovation will be felt throughout the state.