Executive Order Would Drive Climate Progress in Colorado

As the impacts of climate change intensify in Colorado – leading to diminishing snowpack, more severe droughts, and larger wildfires – the urgency of reducing carbon pollution grows clearer. The good news is that there also has never been a better time for Colorado to transition to a clean energy future and achieve significant emissions reductions, and this week, it appears that Governor Hickenlooper is prepared to begin that process. A draft Executive Order, made public by Politico, would require Colorado’s power sector to achieve carbon pollution reductions of 25% below 2012 levels in 2025, strengthening to 35% cuts in 2030. These are readily achievable targets. California’s legislature just extended its economy-wide cap on carbon – requiring 40% cuts below 1990 levels by 2030. The Executive Order, if finalized, would represent a huge step forward and would strengthen Colorado’s leadership in the growing clean energy economy. Colorado’s power companies are well-positioned to meet and exceed the targets in the draft order through smart investments in clean energy like wind, solar, and energy efficiency. In December 2015, Congress passed a multi-year extension of the tax credits for wind and solar, providing important near-term certainty for the renewable energy industry, and making it an ideal time for Colorado to double down on its clean energy policies and investments. The state could also achieve significant emissions reductions by extending and broadening its utility energy efficiency savings standards to 2% savings per year, with the added benefit of increased bill savings for customers. RENEWABLES ARE CHEAPER THAN EVER Colorado has abundant wind and solar resources, and Xcel Energy, Black Hills Energy, and other electricity providers can purchase zero-carbon, renewable energy at a lower cost than ever before. The cost of building a new wind farm is falling as the technology improves, allowing developers to take advantage of higher-speed, less variable wind at higher turbine heights. The costs of solar technologies have also declined quickly over the past several years. According to investment firm Lazard, the cost of generating electricity from solar has decreased 78% since 2009, and many analysts believe costs will their rapid decline over the next several years. Colorado is fifth in the country in wind industry employment, with over 6,000 workers. National Renewable Energy Laboratory Utilities purchased wind power at an average price of $20 per MWh in 2015, the lowest ever. With prices this low, wind power is the cheapest source of new electricity generation and can save money for customers, even when compared to buying electricity from existing, fossil-fuel fired power plants. Colorado’s existing wind fleet has already saved customers more than $20 million in fuel costs, and Xcel estimated that its proposed 600 MW wind project would save its electricity customers more than $400 million over the 25-year life of the project. Recent analysis from Climate Policy Initiative has found that there’s room to build on that progress: Xcel may be able to replace roughly a quarter of its coal generation (6,000 GWh) with new wind projects, all while saving money for its customers. The analysis also indicates that the utility could do so while maintaining reliability and benefitting its own bottom line. ENERGY EFFICIENCY REMAINS THE LOWEST COST RESOURCE, AND COLORADO CAN DO MORE Colorado also has significant untapped energy efficiency potential. Although Colorado’s utilities expanded their energy savings and energy efficiency program spending between 2009 and 2012, overall savings have been about the same since 2012. Colorado lags regional leaders like Arizona and Utah in energy efficiency policies and programs. Though Colorado has a good policy framework, the ambitions of its policies could be higher. For example, the energy efficiency portfolio standard, when fully implemented in 2018, will require utilities like Xcel Energy and Black Hills to save 1.68 percent of load each year, well below the savings levels of 2.5% and more that other states are demonstrating is achievable. Additionally, Colorado’s co-ops and municipal utilities are not held to an energy efficiency standard, limiting savings for many customers throughout the state. COLORADO SHOULD ACCELERATE THE GROWTH OF ITS LOW CARBON ECONOMY By committing to achieve significant carbon reductions from the power sector, Governor Hickenlooper would be sending a strong and clear market signal, encouraging Colorado to strengthen its leadership position in the low carbon economy. Colorado is already feeling the benefits of its thriving clean energy industry. In 2015, Colorado’s wind and solar industries supported between 11,000 and 12,000 jobs. As of 2014, the wind industry had injected more than $4.8 billion in the Colorado economy, and generates an estimated $7.8 million in annual lease payments to ranchers, farmers, and other landowners. According to the state’s most recent carbon pollution inventory (which tracked 2010 emissions), less than a third (30%) of the state’s emissions are from the power sector, and recent investments have likely cut that proportion. Another 23% come from transportation, 21% from residential, commercial and industrial fuel use, and 8% from oil and gas activity. Coal mining, agriculture and waste management also contribute to the state’s carbon emissions. The state can cut emissions from all of these sources – and do so while boosting the state’s economy and saving customers money. This executive order should start the state’s work in addressing carbon pollution across the board. Governor Hickenlooper’s draft Executive Order, if finalized, represents a hugely important step forward and will cement Colorado’s climate leadership and its position in the burgeoning clean energy economy. With the impacts of climate change already being felt across the state, Colorado can’t afford to wait.

Xcel Energy to test new rate structure in Colorado, expand solar under major settlement

Xcel Energy announced the largest proposed agreement of its kind in Colorado history this week with a landmark settlement agreement with major stakeholders that could change how electricity is priced in Colorado and expand solar energy initiatives. The proposed settlement agreement between Xcel and 22 parties was filed with the Colorado Public Utilities Commission (PUC) this week, calling for the testing of new rate designs for residential customers but with no new grid use fees for solar customers. The voluntary plan would offer homeowners energy-based time of use and time differentiated rate programs over three years. The plan would offer lower energy rates when the cost of providing electric service is down due to decreased demand for electricity, and higher rates during times when demand surges. If expansion of the plan is approved, the time of use billing would begin in 2020. “We fashioned a settlement agreement that takes Colorado forward, I believe, for the next three to five years on how we are going to manage distributed energy and how we are going to make sure customers have options to participate in the evolution and utilize the technology that has been developed,” Alice Jackson, regional vice president for rates and regulatory affairs at Xcel Energy, Colorado, recently told Daily Energy Insider. Parties to the settlement include the Colorado Energy Office, solar advocacy groups, and the state’s largest cities and major electricity customers, among others. Hearings on the settlement are expected to be held in October, with a decision by the end of the year. The agreement addresses three cases that the Minneapolis-based Xcel filed earlier this year with the Colorado Public Utilities Commission – Phase 2 of its electric rate case, the Solar Connect program and the 2017 Renewable Energy Plan. The Solar Connect program, to be renamed Renewable Connect, calls for a new 50-megawatt solar-dedicated resource. Xcel would also increase its solar rewards programs, including rooftop solar and community solar gardens, allowing for up to 342 megawatts of new solar between 2017 and 2019. The plan would also reserve a portion of its solar garden offerings for low-income customers. “When you look at the statistics here in Colorado, only about 25 percent of our customers have the ability to put rooftop solar on. Community solar isn’t prevalent across our system where customers have that option wherever they are,” Jackson said. “And from a financial aspect, there are low-income customers who can’t qualify for the financing associated with those other programs. “So this was another alternative for residential customers, and for our large customers as well, for them to have a one-stop shop.” Closely linked to the settlement is Xcel’s Advanced Grid Intelligence and Security initiative, an approximately $500 million proposal filed with the Colorado PUC to allow for better integration of distributed generation on to the grid. Jackson said that a decision from the commission on the Advanced Grid plan is expected in the second quarter of 2017. The proposal calls for the rollout of an advance metering infrastructure that would allow customers’ electric meters to be read more frequently than the current once per month, while new technology called Integrated Volt Var Optimization would be implemented to allow customers’ appliances to be run more efficiently, thereby reducing their energy consumption. In order to support the new technology, Jackson said, implementing a communications network known as a Field Area Network would also be required Jackson said the Advanced Grid plan offers numerous benefits, including allowing customers to have more detailed information on their energy usage. “It also allows us to increase the reliability part of the system because we have much more transparency and we can roll our trucks more efficiently and be able to restore those outages and reduce the outage time that our customers might see,” Jackson said. “And it also expands the capability of the grid to establish the control that we need to have even higher levels of distributed energy resources installed on the system.” Xcel also has an Electric Resource Plan in front of the Colorado PUC, which shows that in 2023 there will be a 600 megawatt need for capacity to fulfill demand on the system. As a result, Xcel expects to solicit bids from renewable energy companies in the middle of 2017. “We anticipate we will be adding probably more wind and solar from that request for proposals,” Jackson said. Xcel also filed a plan with the commission in May for a 600 megawatt wind resource that it proposed to be built on the eastern plains of Colorado. The project is expected to provide approximately $443 million in cost savings to Xcel’s customers on a net present value basis, with those benefits starting in the third year. “This is one of those no regrets investments because it helps our customers take advantage of the federal production tax credit,” Jackson said.

Declining energy sector jobs switching to solar power

DENVER — A program is underway in Colorado to retrain people who lost their jobs in the coal or oil and gas industry so they can get the skills they need to install solar panels. The Colorado Department of Labor and Employment gave a company based in Paonia on the Western Slope a $400,000 matching grant as part of a program to help workers furloughed from other energy sector jobs that are in decline. The money was used by Solar Energy International to start Solar Ready Colorado, which promises to train unemployed miners, veterans and workers in the oil and gas industry. The goal is to recruit and train 350 people for various jobs in the solar industry. Students can take a single course as an introduction to solar power or more than 200 hours of training in the Solar Professionals Certificate Program. Chris Turek, spokesman for Solar Energy International, said the company recruited coal miners because of their focus on safety and experience with mechanics and electrical engineering. Those skills can easily be transferred to the solar industry, he said. "People are becoming more and more open to it because they're starting to realize it's just another part of the energy sector," Turek said. "At the end of the day, we need electricity, and that need for electricity is just growing." Colorado Solar Energy Industry Association President Rebecca Cantwell said solar energy programs are bearing fruit, the Denver Post reported. "We're going to see more and more of this because there's more and more awareness that the coal industry is in real trouble," Cantwell said. Stuart Sanderson, who is president of the Colorado Mining Association, said other jobs like the solar industry usually don't pay as much as jobs in the oil and gas industry or coal mining. The average mining job in Colorado paid $91,000 in 2015, according to the National Mining Association. Solar installers can make up to $25 an hour, or about $50,000 a year. Colorado has about 5,000 solar jobs, mainly installers, and 400 solar companies, according to the Solar Foundation. Those Colorado solar jobs are also expected to grow by 10 percent.