Colorado coal country turns to solar energy, organic farming

PAONIA — To see the worst of the coal slump in Colorado, look no further than the state's North Fork Valley. Since 2013, two out of three mines have closed around Paonia. The region has seen a large exodus of miners and their families as the number of mine-related jobs dropped from 950 in January 2010 to just 220 in January 2017. Workers at the last mine standing in the region, West Elk, met President Donald Trump's executive order with cautious optimism. But travel to the west central Colorado region, and it's clear that the area isn't banking on coal coming back to what it used to be. And the decline is clear. It's meant a few empty storefronts in Paonia, a drop in Delta County School District students, and fewer fully ensured health care patients in the region. And there's another challenge: In contrast to big coal producers such as Wyoming and the Appalachia region back East, federal grant dollars to ease the transition away from coal aren't flowing as freely into Colorado. That's according to Democratic state Sen. Kerry Donovan, who represents Delta County. "I think what's unique about Colorado is it's not thought of as coal country," Donovan said. "Those federal programs have focused on the more traditional West Virginia, Appalachia communities that we think of as coal country. So I think in Colorado it's going to fall more on the shoulders of the state." On the bright side, this means there's new opportunities for economic planning and development. Up around Paonia and Hotchkiss, that's meant a focus on existing industries like solar energy and organic farming. Jim Ventrello, the Delta County School District's financial officer, said there's a fundamental belief that a coal industry revival isn't going to save the region. And efforts to transplant a new industry to the region won't work, either. "Goodyear isn't going to walk in here and build a plant," said Ventrello. "If we're going to continue here and we're going to develop, we're going to have to do it ourselves." The Barack Obama administration sent some dollars to Colorado for rebuilding coal communities, including nearly $650,000 to Gunnison County for job retraining. For her part, Donovan has unsuccessfully sponsored legislation to appropriate $500,000 for communities scrambling to plan forward from sudden mine and plant closures. With planning help from state economic developers, Delta County Economic Development Inc. drew up its future plans in 2016. Here's a look at the key items. SOLAR: With the help of training school Solar Energy International, the North Fork Valley could see more rooftop solar. Delta County's high poverty rate has translated into low demand for rooftop panels. With Solarize Delta County, SEI plans to make the energy more accessible and affordable by spurring more local investment. SEI has also launched efforts to retrain coal workers, although SEI Director of Operations Kris Sutton said the effort has been slow going in the short term: "If coal miners here want to pursue solar jobs. They're going to have to probably move," Sutton said, referring to the fact that most solar installation jobs are along the Front Range. A SPECIALTY FOOD MANUFACTURING INCUBATOR: Delta County School District, which runs the region's technical college, purchased a 22,000 square foot building that will eventually house classrooms, a commercial kitchen and a warehouse. Entrepreneurs could get classes, marketing assistance and a space that helps them create food products out of regional produce from the valley, including organic foods, Ventrello said. "It's value added. Rather than just selling tomatoes, can you make a high end salsa?" ORGANIC FOOD: In Hotchkiss, Big B's Juices has evolved from from a shed that sold organic fruit to an outfit that sells juice and a hard cider line across the country. Ventrello says the incubator could help existing businesses like Big B's expand their business, and hire more folks including out-of-work miners. Shawn Larson, who moved to the area from Utah in 2010 to help start Big B's hard cider line says every extra job helps. "We sell products nationwide. You know, we have that reach, but also affect our community," he said. RECRATION AND TOURISM: In its economic blueprint, the county's economic development group plans to beef up its Gunnison Riverfront property with more access points for water sports, trails and picnic areas. It also calls for a hotel and conference center to make the city more of a destination for travelers. BROADBAND: Delta-Montrose Electric Association will spend up to $125 million on high-speed broadband internet to the region in the coming years, which includes the towns of Paonia and Hotchkiss. Paonia was one of the first towns to be fully wired with the broadband. Mayor Charles Stewart said it will be one key to recruiting new businesses and drawing more residents to the region. "People like those amenities. When you can say to folks, 'Yes, you can live in the North Fork and still have high-speed internet access,' that's a positive," said Stewart. OTHER RENEWABLES: It's not just individual homeowners that could see more solar in Delta County. The region's electricity provider, Delta-Montrose Electric Association, is also seeking to add more solar and hydroelectric power to its grid. Meantime, regional economic development leaders like Tom Huerkamp are eyeing the region's shuttered mines and seeing another economic opportunity: generating power from methane that naturally vents from shuttered underground mines. "If we tap the old coal mines, this community has the ability in the next maybe five to 10 years to disconnect from the grid," Huerkamp said. In addition to the state, Delta County Economic Development Inc. also plans to apply for grant money for its incubator with the U.S. Economic Development Administration, an agency Trump sought to eliminate in his budget. Ventrello said economic development officials are mindful of submitting any applications before next budget cycle. In a purple state like Colorado, economic development officials in conservative Delta County are mindful that economic salvation won't come from one side of the political spectrum. Building more renewable energy will have to stand alongside traditional industries like tourism. "I don't want to be a category," said Tom Huerkamp, vice president of Delta County Economic Development Inc. board of directors. "I want creativity. And I think that is more important than locking yourself into a political philosophy."

Colorado Bill Would Create Bonds to Retire Coal Plants and Finance Worker Retraining

As coal plants and coal mines continue to shut down across the U.S., coal workers are getting hit hard. While the transition has brought lower-carbon electricity and cleaner air, it’s also meant lost jobs, company bankruptcies, and false political promises about revitalizing the industry. One state is looking at a more proactive way to help coal workers transition to the new energy economy -- by using private capital and the bond market. Last week, a new bill was introduced into the State House in Colorado, called “The Colorado Energy Impact Assistance Act,” sponsored by Representatives Chris Hansen and Daneya Esgar (both Democrats). The bill seeks to create bonds that utilities could use to refinance retired and expensive coal plants. The ratepayer-backed bonds would be commercial-grade, with low interest rates, and would enable utilities to save money by retiring coal plants and reinvesting in natural gas, solar or wind farms. Fifteen percent of the savings would be used to help displaced workers and offset lost property tax revenue. “The plant closures that have happened in Colorado have been very hard on the communities, and we haven’t had any resources to help them out. This is an urgent policy need in our state,” Representative Hansen told GTM in an interview this week. Close to half of Colorado’s 11 coal plants, which provide 60 percent of the state’s energy, have retirement dates set. Older coal plants are becoming increasingly expensive to operate, compared with natural gas and clean energy. Colorado has a renewable energy mandate. But utilities haven’t traditionally been incentivized to retire older plants early, even if it’s more expensive and dirtier to run them. That’s because utilities are compensated for the infrastructure they build. Closing an older plant early, before the end of its designated life, is often a money-losing move. The mismatch explains why clean energy advocates have been calling for a bill like Hansen’s -- to help make the energy transition more economic for utilities, as well as communities. Hansen called the bill a “win, win, win,” for utility customers, displaced workers and utilities. Uday Varadarajan, a principal with the Climate Policy Initiative who worked on the analysis behind the bill, said the use of ratepayer-backed bonds has a long history in the U.S., particularly in the electricity market restructuring of the 1990s. “There’s been $50 billion worth of these types of bonds issued over the last 25 years,” said Varadarajan. Currently Duke Energy has been using them in Florida to decommission nuclear plants. Michigan, too, plans to use them for retiring coal plants. “Because these are regulated monopolies, it make sense to make sure that stranded assets are taken care of,” said Varadarajan. If the bill in Colorado is approved and helps out Colorado’s utilities and coal workers, it could become a model for other states to transition their energy markets. “We hope that this bill and ideas like it can be a template for what we might be able to do for other places across the country,” said Varadarajan. The details of the job retraining and support programs for coal workers would be decided by a seven-person board appointed by the governor, as well as a local advisory committee. The Colorado bill is set to go before the House Transportation and Energy committee next Wednesday. It will need to pass the committee, and the House, then the Senate, and finally get signed by the governor to become law. The bill is an example of innovative types of private financing that are being considered to help build out new energy infrastructure. Another example is PACE financing that funds solar panels and energy-efficiency upgrades on homes and commercial buildings through tax assessments. “With the right kind of thinking, novel financing can play an important role in catalyzing the transition,” said Varadarajan. "We’ve got the chance to build new tools here," said Hansen.

Shopping around for solar installers could reap biggest rewards Larger home installers add average of 10 percent to cost, but their longevity appeal to some consumers

When it comes to getting the best deal on a residential rooftop solar array, the size of the installer matters — but bigger isn’t necessarily better, according to a study from the National Renewable Energy Laboratory in Golden. NREL found that about 70 percent of the time, the largest players, defined as those installing 1,000 or more solar systems a year, quoted consumers a higher price than smaller competitors. The premium for going with the brand name on systems purchased for cash was 10 percent on average. That works out to about $3,000 to $5,000 of the typical residential system that can run $30,000 to $50,000 before tax credits. The largest 1 percent of installers put in about 60 percent of all systems, and the largest 10 percent accounted for 90 percent of the systems, NREL said. But thousands of smaller and lesser known vendors are also available to put in solar power arrays. “Price can vary a lot. Consumers should shop around,” said Vikram Aggarwal, CEO and founder of EnergySage, an online site that allows consumers to obtain competing quotes on solar systems. Much of the price information used in the NREL study came from EnergySage, which handled $1 billion in quote requests last year and bills itself as a solar panel world equivalent of the travel comparison website Kayak. Typically, economies of scale allow a larger vendor to offer bigger discounts and win more business. But when consumers are unfamiliar with a product and prices are difficult to compare, that competitive pattern can be disrupted. Marketing and customer acquisition expenses can run as high as a quarter of the total cost of a solar-array system at some of the larger players, who are often under pressure to keep a steady flow of new customers coming in, Aggarwal said. Large firms will spend money to have salespeople cold-calling and knocking on doors to explain the potential advantages of solar power, something most smaller firms don’t have the budget for. “We would never go door-to-door knocking. We don’t have any marketing plan and we don’t do any advertising. Everything we do is word-of-mouth,” said Whitney Painter, owner of Buglet Solar Electric Installation in Golden. Painter said her firm beats much larger competitors by keeping its overhead costs low and entering into the bidding process with what she called “a different flexibility.” Photovoltaic panels, racking systems and inverters continue to drop in cost and improve in efficiency and ease of installation. Another obstacle that’s fading is the growing number of lenders that are comfortable financing loans on solar arrays. Still, fewer than 1 percent of homes in the country and in Colorado have photovoltaic solar systems, leaving a huge potential market. Given the big reductions in hardware costs in recent years, the next frontier will come in reducing soft costs, things like acquiring customers and permitting, said Rebecca Cantwell, executive director of the Colorado Solar Energy Industries Association. NREL’s study doesn’t disparage large firms. Some consumers prefer to go with a brand name they believe will have a better chance of surviving for the long haul and standing behind systems that can last 20 or 30 years. “At Sunrun, we are committed to providing our customers the most accurate pricing quotes from the onset,” said Michael Grasso, chief marketing officer at Sunrun, a leading installation firm that’s been around since 2007. “We are able to accommodate these quotes through years of experience and proprietary pricing technology.” Aggarwal argues that pricing transparency will make what is currently an inefficient system easier for consumers to navigate, boosting adoption. “It is a dynamic and changing marketplace. The takeaway is that consumers who want to go solar should talk to several companies,” Cantwell advised.