New energy mandate rattles rural co-ops
Flush with Democrat majorities in Denver, state lawmakers have fast-tracked a bill that will more than double the amount of energy that rural cooperatives are mandated to get from renewable energy sources.
The bill, if signed into law, could mean cost increases for customers of Tri-State Generation and Transmission, whom analysts say the legislation primarily targets.
“It could have huge financial implications on Tri-State and our member co-ops in Colorado,” said Jim Van Someren, communications manager for the company.
One of those member co-ops that purchases power from Tri-State is the Delta-Montrose Electric Association.
“They definitely would be impacted, because if this thing were to go through, it could likely cost hundreds of millions, if not a couple of billion dollars to Tri-State — and those costs are directly passed on to the member co-ops,” Van Someren said.
The bill, SB252, makes several changes to the state’s renewable electricity standard. Cooperative electric associations serving more than 100,000 meters would be compelled to increase the amount of energy they get from renewable sources from 10 percent to 25 percent by 2020. The bill also ups the amount that CEAs can boost rates to customers, from 1 percent to 2 percent.
Xcel Energy already faces a renewable energy mandate of 30 percent by 2020. The new legislation is being characterized as a way for other utilities to keep pace with that.
The bill is sponsored by state Senate President John Morse, D-Colorado Springs, and House Speaker Mark Ferrandino, D-Denver.
It is co-sponsored by Sen. Gail Schwartz, D-Snowmass Village, who represents many constituents in the DMEA’s service area and is term-limited.
The bill passed the Democrat-led State, Veterans and Military Affairs Committee on a 3-2 vote Tuesday and is scheduled to be debated on second reading in the Senate today.
In committee testimony, Tri-State officials said the new law could cost them between $2 billion and $4 billion to comply, though a former chairman of the state’s Public Utilities Commission disputed the company’s numbers.
Regional advocacy groups are lining up against the bill.
Western Colorado’s Club 20 said it’s opposed because the group can’t support “additional renewable energy mandate standards that force the use of renewable energy sources beyond what would be called for by real market forces.”
Scott McInnis, executive director of the Associated Governments of Northwest Colorado, called the bill “a crippling measure” in a news release and said SB252 “will negatively affect every industry in rural Colorado, from mining, to farming and ranching, to the ski industry, to everything in between.”
The bill has its supporters, though. “Colorado is a national leader in renewable energy, and people in rural parts of the state deserve to share in that success,” Boulder-based Western Resource Advocates announced in a news release, predicting there would be no “adverse impact to consumers.”
DMEA customers in Delta have already seen first-hand how pressures on Tri-State trickle down to them by way of rate increases. Just last year, DMEA said Tri-State had raised rates by 5 percent, and the DMEA board of directors decided to pass along a rate increase to members. Tri-State has raised rates to DMEA for 2013 to the tune of 4.9 percent.
For customers of Grand Valley Power, the bill likely won’t have a direct effect on what they pay, according to GVP spokesman Bill Byers.
He said GVP is one of four co-ops that buy their wholesale power from Xcel Energy, who also provides renewables to GVP. Byers said GVP is well above the 10 percent mandate it faces for renewable energy.
GVP is lining up in opposition to the proposed bill, however, because of other provisions it believes are onerous and potentially expensive. Byers also was disappointed at the lack of collaboration on the bill.
For Mesa County Commissioner John Justman, the current trend in Denver is troubling. “They took care of the gun owners, now they are ratcheting up on the oil and gas people, and energy, I guess,” Justman said. “The problem is, they’ve got the votes to do it, and there really isn’t anything anyone can do to stop it.”