June 9, 2013

Hickenlooper Signs Bill to Double Rural Renewable-Energy Requirement

In a move to boost renewable-energy generation in Colorado, Gov. John Hickenlooper on Wednesday signed a controversial bill doubling the renewable-energy target for rural electric cooperatives.

"No question that the country as a whole is looking for, wanting cleaner fuels," Hickenlooper said.
The governor said, however, the bill was "imperfect" and issued an executive order to review its most contentious issues: the compliance deadline and the cost.

The new law requires cooperatives to supply 20 percent of electricity from renewable sources by 2020. They had been facing a 10 percent requirement by 2020.

"The 20 percent by 2020 is imminently doable," said John Nielsen, energy-program manager for the environmental-policy group Western Resource Advocates.

"We are seeing many utilities adding 300 to 500 megawatts of renewables in the space of five years," Nielsen said.

The difference is that the rural co-op system does not have the natural-gas fired plants or transmission lines to balance renewable energy, said Kent Singer, executive director of the Colorado Rural Electric Association.

"Twenty percent by 2020 is an impossibility," Singer said.

The bill, SB 252, was one of the most hotly contested of the legislative session, pitting environmental groups and renewable-energy companies against rural cooperatives and Republican lawmakers.

"The bill was deeply flawed, and the best approach would have been to veto it and for us to come back and work collaboratively to find a compromise," said Lee Boughey, a spokesman for the Tri-State Generation and Transmission Association.

Tri-State, which provides wholesale power to 18 rural cooperatives and serves about 20 percent of Colorado, opposed the bill, saying it could cost up to $3 billion.

Meeting the goal would primarily fall to Tri-State, which provides 95 percent of the electricity sold by its member co-ops, and the Intermountain Rural Electric Association.

Under the new law, the cost of meeting the goal is capped at a 2 percent charge on bills, doubling the current renewable-energy cap.

But Boughey said exactly what falls under that cap and what doesn't is not clear.

"Senate Bill 252 will cost the average farm family thousands of dollars in higher energy costs," state Rep. Jerry Sonnenberg, R-Sterling, said in a statement.

Hickenlooper rejected such forecasts Monday.

"When we sat down and really looked at it, the average cost to customers was about $2" a month, Hickenlooper said.

The additional cost for farm irrigation ranged from $10 to $40 a month, the governor said.

"In the end, this will be better for consumers, offering more predictable costs than old fossil fuels," said Peter Maysmith, executive director of the environmental group Conservation Colorado.

Many of the still-fractious issues will be reviewed by an advisory committee, Hickenlooper said.

The committee will look into whether the 2020 target is reasonable and whether the "2 percent cap is defensible and realistic," the governor said. "That people aren't going have to endure hidden costs and charges."

The committee, overseen by the Colorado Energy Office and including representatives from rural electricity utilities, the renewable-energy industry and environmental groups, will make a report in six months.

"The co-ops were not consulted on the executive order and the advisory committee," Tri-State's Boughey said. "We are reviewing the order issue to understand its purpose and implications."

The governor said the law could be modified in the next legislative session if it needs to be.

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