Senate Bill 11-045 Introduced to Streamline the Siting Process for Transmission Facilities in Colorado

SB 11-045 (the bill) creates a new Siting Commission to approve "planned facilities" within 180 days of the date of filing of the application by the utility. As defined under the bill, planned facilities are electric transmission facilities that are specifically listed in a current statewide long-range plan adopted pursuant to rules promulgated by the Public Utilities Commission (PUC). (For a more detailed summary of the rules see blog posting on January 24, 2011.) The bill is specifically limited to PUC jurisdictional public utilities.

The Siting Commission serves at the pleasure of the Governor and its members are appointed by the Governor in three categories: (1) three members representing regulators of utilities; (2) three members representing local governments in which a planned facility is proposed to be located; and (3) one member representing the public at large. With the exception of two members, each member from category (1) and category (3) serve for a term of four years. The members from category (2) serve for the length of the proceeding and if necessary can serve on more than one Siting Commission simultaneously, depending on the number of applications pending.

Under the bill, a utility may submit to the PUC, an application for a certificate of public need and necessity (CPCN) for a planned facility. The PUC must act on the application within 180 days (or 200 days if the application required filing of additional information) or the application is deemed approved.

Upon approval of the application for a CPCN by the PUC, the utility may submit an application for siting approval of a planned facility to the Siting Commission. The Siting Commission must act on the application within 180 days (or 200 days if the application required filing of additional information) or the application is deemed approved.

Once the utility receives CPCN approval from the PUC and siting approval from the Siting Commission, no further approvals are required.

Decisions by the PUC and the Siting Commission are appealed to the court of appeals.

Colorado PUC Issues Decision Adopting Rules Governing Electric Transmission Facilities Planning in Colorado

In follow-up to the Notice of Proposed Rulemaking issued by the Colorado Public Utilities Commission (the "Commission") on July 28, 2010; the Commission, on January 21, 2011, issued an Order adopting rules for in-state transmission planning. While the Order emphasizes that the transmission planning process in the state has been changed by recent Colorado legislative activity, the rules do not clearly emphasize the need to plan for transmission to support development of Colorado's resources. In this way, the rules may not necessarily align with a number of recommendations in the STAR report and the CAP report as discussed in previous postings.

Generally, the Order encompasses six concepts in describing the rules as adopted:

1. No later than February 1, 2012, and every even year thereafter, each of the three jurisdictional utilities in the state shall file a ten-year transmission plan reflecting its own needs and is required to reflect coordination of projects with all transmission providers in Colorado. The biennial filing requirement is provided in order to better coordinate transmission and generation planning.
   
2. To support the coordination as set forth in paragraph 1, the Commission believes that non-jurisdictional providers will continue to participate before the Colorado Coordinated Planning Group (CCPG). The rules do not require the CCPG or non-jurisdictional entities to file plans with the Commission.
   
3. Each transmission plan is required to demonstrate compliance with the standards as set forth in §§3627(b) – (d). In particular, §3627(d) requires filing of all economic studies performed pursuant to FERC Order 890 since the last biennial filing. In each plan, utilities are generally required to demonstrate why certain projects are proposed, the extent of coordination with other transmission providers, and that stakeholder outreach was undertaken.
   
4. The rules mandate that jurisdictional utilities provide an opportunity for meaningful stakeholder participation, including government participation, in the process. §3627(g). The Order notes, however, that neither the requirements for transmission planning nor the requirement to allow for stakeholder input is intended to take the place of the siting approval process.
   
5. Upon filing of the plans of the three jurisdictional utilities, the Commission will consolidate the plans into one. The Commission, in its discretion, will then schedule workshops and/or hearings and solicit public comments on the plans and the process used to formulate the plans in order to issue a written decision regarding compliance with the rules and adequacy of the plans.
   
6. The rules require jurisdictional utilities to reference the most recently filed ten-year transmission plan in any subsequent CPCN application for individual projects contained in that plan.
   

The Commission anticipates informal workshops in 2011 to clarify the expectations for the first filing in 2012.

Plug-In Vehicles as a Distributed Generation Source

Generally, distributed generation (DG) refers to electricity that is provided to the end user by a number of small energy sources. The University of Colorado's smart grid white paper entitled, "Smart Grid Deployment in Colorado: Challenges and Opportunities," http://cees.colorado.edu/sgreport.pdf provides that DG technologies have the potential to mitigate overloaded transmission lines, control price fluctuations, strengthen energy security and provide greater stability of the electric grid. The STAR report highlights the benefits of the plug-in hybrid electric vehicles (PEHV) with respect to carbon emissions reduction. According to the CSU study, however, barriers to PEHV need to be addressed. Some of these barriers include: cost premiums associated with batteries and charging infrastructure and public acceptance to plugging in their vehicles. In addition, to drive growth of PEHV, Federal and state incentives are necessary. Such incentive include: fleet purchases of PEHV by state and local governments, mechanisms to offset the cost premiums of PEHVs and related infrastructure, and support for public education and awareness programs to facilitate integration.

The STAR report highlighted the 2007 NREL study entitled "Costs and Emissions Associated with Plug-In Electric Vehicle Charging in the Xcel Energy Colorado Service Territory" that can be found here: http://www.nrel.gov/docs/fy07osti/41410.pdf. Some of the conclusions as cited in the STAR report are as follows:

1. Replacing 30% of the vehicles currently in Xcel territory in Colorado with PEHV that drive 39% of their miles from electricity would increase the total load by less than 3 percent.
   
2. If left uncontrolled, there is the chance that charging would put increased pressure on peaking units.
   
3. Modest attempts to optimize system charging would prevent the need for additional capacity, even in light of a massive penetration of PHEV.
   
4. Most near term PEHV charging would be derived from natural gas.
   
5. The incremental cost of charging equates to about 60 cents to 90 cents per gallon.
   
6. There are significant reductions in CO2 emissions from PEHV.
   
7. One scenario for optimal charging would be to combine off-peak charging to minimize costs, while including some midday charging to increase gasoline savings.
   

With proper planning PEHV and other battery technologies have the potential to assist utilities with frequency regulation, peak shaving and where lines or transformers are overloaded. According to the study, the impact of increased use of PEHV could be measured by the reduction of carbon emissions.

An Analysis of Power Sector Modeling Used in the STAR Report

As a continuation of our series discussing the STAR report, we provide an overview of the modeling methodology used to analyze Colorado's electricity sector by 2050. The modeling entitled, "Power Sector and Colorado Climate Action Plan Scenario Analysis for the Strategic Transmission and Renewables Report," was used to develop a picture of the generation and transmission infrastructure that will be required in response to expected future Colorado loads. The conclusions from the modeling report are used in the STAR report to define strategies for the state to respond to increased energy needs while decreasing the state's carbon footprint to meet the goals of the Colorado Climate Action Plan (CAP).

Brief Overview:
The modeling predicts that by 2030, in order to meet the 40% reduction in CO2 emissions from the 2005 level, the Colorado power generation mix will need to have about 7,750 MW of wind, 480 MW of CSP, and 255 MW of Solar PV bolstered by about 1,700 MW of combined cycle generation equipped with carbon capture and sequestration technology.
The modeling further predicts that a majority of the retired coal-fired generation will be replaced with conventional combined cycle technology requiring by 2030 about 2,400 MW of advanced combined cycle technology with higher efficiencies to replace retired capacity. However, about 4,400 MW of additional combined cycle technology will be necessary to support a high load growth scenario.

Parameters of the Modeling Study:
The modeling study defined three scenarios to use in assessing the potential evolution of the electricity sector: (1) achievement of the newly implemented 30% RES enacted under HB10-1001; (2) achievement of CAP; and (3) determination of the expected CO2 reductions and fuel mix that would result from retirement of aging coal-fired power plants - an expanded version of the Clean Air Clean Jobs Act enacted under HB10-1365.
The model was further based on a number of assumptions: (1) Colorado's electricity sector will meet the CAP; (2) Colorado will experience an aggregate statewide annual average load growth of 1.7 percent to 2030 and beyond to 2050; (3) all of PSCo's conceptual SB07-100 transmission lines were assumed in service by 2030; (4) for the retirement scenario, all CO coal-fired generating plants assumed retired by age 45 beginning in 2017; (5) The 30% RES will be met; (6) 33% wind penetration by 2035 and increasing to 45% by 2050; and (7) nuclear power was modeled starting in 2017.

Viable Scenarios to Achieve CAP Targets:
1. The most viable pathway to meet the CAP targets is demand side measures to reduce or contain load growth.
2. The most attractive scenario to reduce overall CO2 emissions is the one that starts with the base case, adds the benefit of demand side management, then introduces the benefits of RES and CAP compliance, as well as the benefits of coal plant retirements beginning in 2017 until they reach age 45.
3. The most viable alternatives to reach the CAP targets are to deploy demand side management and set a schedule for retiring coal-fired generation plants when they reach the age of 45.
4. The modeling clearly indicates that unless a much greater commitment to demand-side measures is instituted, major supply-side capacity additions, in the form of renewable energy and natural gas, must be brought on line to meet load growth and CAP goals.
5. Transmission is needed to develop Colorado's wind and solar resources.

The Road to the Colorado GEO’s STAR Report

The Strategic Transmission and Renewables (STAR) report is the fifth in a series of reports created under Governor Ritter's administration and provides context to new laws. These reports have been used to form policy recommendations as they relate to Colorado's electricity sector. Governor Ritter introduced Colorado's New Energy Economy in the first report entitled "Governor's Climate Action Plan" (CAP).

• CAP report released in November 2007: The plan details the actions that will move the state towards its goal of reducing emissions 20% below 2005 levels by 2020 and 80% by 2050. The report focused in part on the need for energy conservation, efficiency and the need for more transmission capacity to support integration of renewable energy.

• SB91 Report released in December 2007: The Governor's Energy Office (GEO) followed the CAP report with release of the SB91 Report of the Renewable Resource Generation Development Area Task Force. The report focused on defining Colorado's capacity for renewable energy generation to support electric power in the state. The Task force designated 10 Colorado Generation Development Areas (GDAs) having the capacity to produce more than 1,000 MW. According to the report, the GDAs have a capacity of more than 96,000 MW of wind generation and 26,000 MW of solar generation. The report also noted the need for extra-high voltage transmission to accommodate the energy generated in the GDAs.

• REDI Report released December 2009: The SB91 report was followed by release of the Renewable Energy Development Infrastructure (REDI) report Connecting Colorado's Renewable Resources to the Markets in a Carbon-Constrained Electric Power Sector. The focus of the REDI report was to provide details regarding how the state can reach its goal of 20% reduction in the sector's CO2 emissions by 2020, the 20x20 goal. The report demonstrated that under current policies, Colorado's electricity sector is not on track to reach the 20x20 goal. The report emphasized the need for demand-side management, energy efficiency, utility scale renewable energy development, development of extra-high voltage transmission, strategic use of natural-gas fired generation for baseload support of the grid, and decreased utilization of coal-fired generation.

• 2010 Colorado Utilities Report released August 2010: The report provides a picture of the network of generation resources, operating data and the structure that governs the 65 electric and gas utilities in Colorado. The report cited two main challenges to increasing integration of renewable energy: transmission and permitting.

 

Substantive steps towards implementation of some of the policies recommended in this series of reports were taken with passage of two new electricity sector laws: (1) the 30% Renewable Energy Standard (RES) by 2020 requiring Colorado's investor owned utilities to reach 30% renewables by 2020; and (2) the Clean Air Clean Jobs Act aimed at reducing emissions in the electricity sector. The STAR report highlights these pieces of legislation as key to meeting the 20x20 goal as defined in the CAP report. The focus of the STAR report is an analysis relating to strategies to reduce CO2 emissions by 80% by 2050.

 

"To achieve the 80x50 goal will require the maximum potential operational penetration of utility-scale renewable energy, with a complementary expansion of natural gas-fired generation to integrate naturally variable renewables, and the capability of ramping up to meet a growing load as it grows." STAR report at pg. 13.

 

While the increased RES and the Clean Air Clean Jobs Act were substantive steps, there are additional statutory changes necessary to drive utility scale renewable energy development and facilitate construction of the extra-high voltage transmission necessary to support that development. The STAR report introduces these challenges and all of these reports can be found on the GEOs website: rechargecolorado.com.

Final Report Issued by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling

President Obama’s National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling issued its final report regarding its investigation on Tuesday, January 11, 2011.  While commentators who have parsed through the 398-page report already provide a variety of interpretations, it is clear that the report provides policies and recommendations that the Commission will be looking to Congress and other federal agencies to support.  The Final Report can be reviewed in its entirety on http://www.oilspillcommission.gov/final-report. 

“As a result of our investigation, we conclude:

• The explosive loss of the Macondo well could have been prevented.

• The immediate causes of the Macondo well blowout can be traced to a series of

identifiable mistakes made by BP, Halliburton, and Transocean that reveal such

systematic failures in risk management that they place in doubt the safety culture of

the entire industry.

• Deepwater energy exploration and production, particularly at the frontiers of

experience, involve risks for which neither industry nor government has been

adequately prepared, but for which they can and must be prepared in the future.

• To assure human safety and environmental protection, regulatory oversight of

leasing, energy exploration, and production require reforms even beyond those

significant reforms already initiated since the Deepwater Horizon disaster. Fundamental

reform will be needed in both the structure of those in charge of regulatory oversight

and their internal decisionmaking process to ensure their political autonomy,

technical expertise, and their full consideration of environmental protection concerns.

• Because regulatory oversight alone will not be sufficient to ensure adequate safety,

the oil and gas industry will need to take its own, unilateral steps to increase

dramatically safety throughout the industry, including self-policing mechanisms that

supplement governmental enforcement.

• The technology, laws and regulations, and practices for containing, responding to,

and cleaning up spills lag behind the real risks associated with deepwater drilling into

large, high-pressure reservoirs of oil and gas located far offshore and thousands of

feet below the ocean’s surface. Government must close the existing gap and industry

must support rather than resist that effort.

• Scientific understanding of environmental conditions in sensitive environments in

deep Gulf waters, along the region’s coastal habitats, and in areas proposed for more

drilling, such as the Arctic, is inadequate. The same is true of the human and natural

impacts of oil spills.”

Final Report, Introduction, page vii. 

Colorado Governor’s Energy Office Releases Strategic Transmission and Renewables (STAR) Report

The Colorado Governor's Energy Office today released the Strategic Renewables and Transmission Report (STAR Report). While we intend to provide a more detailed assessment of the study in consecutive blog postings, we provide brief highlights below. The study was intended to identify new drivers needed for sustained orderly development of Colorado's electricity sector out to the year 2050. In producing the report, the STAR project produced a 38-page detailed modeling of Colorado's electricity sector out to the year 2050. The modeling revealed five key actions necessary to secure Colorado's strategic electric power sector:

1. Energy efficiency

2. More utility scale renewable energy generation

3. Extra-high voltage transmission

4. Decreased coal fired generation

5. Increased natural gas fired generation - "of critical importance, the state must expand deployment of natural gas fired generation."

The report emphasizes a comprehensive view of energy and infrastructure to support cleaner power generation in the state. Key to growth in the electricity sector is the potential to leverage the state's strengths (natural gas and renewable energy) and manage air and water constraints.

"Results of the STAR modeling analysis quantify the need for a substantial increase in natural gas generation in Colorado's electric power system, amounting to approximately 6,500 MW of additional gas-fired capacity by the year 2050 under a load growth scenario of 1.7 percent per year. This increase is necessary to meet load growth, displace aging coal-fired generation and provide necessary firming and integration of renewable resource generation. Natural gas will play a major role in producing better environmental performance in the electricity sector, including CO2 reductions . . . State-of-the-art forecasting is increasingly proving its value to enable efficient co-scheduling of wind, solar, and natural gas power. Advances in this area will allow the industry to maximize every megawatt of renewable capacity, resulting in a more reliable power supply, with attendant benefits - including environmental - and more stable prices."

Finally, the report highlights the need for policy-makers to conduct a comprehensive review of the "opportunities for gas-fired generation, or renewable energy or both, and the associated transmission and pipeline infrastructure requirements and policy guidance that will allow these cleaner resources to displace the retirement of coal-fired generation."

To access the report and its supporting documentation, click here.