Sunday, February 13, 2011

The GEO STAR Report: Positive Electric Sector Policy Shifts Are Indicated by Recent Colorado Legislation

The STAR report highlights passage of HB10-1001 and HB10-1365 as particularly important to reshaping the state’s electric power future.  These statutes are designed to drive development of Colorado’s renewable and natural gas resources for electricity generation and to drive reduction of ground level ozone emissions.  In addition, the report emphasizes how these bills implicate the need for Colorado to address transmission capacity constraints. 


HB10-1001 requires Colorado’s investor owned utilities to reach a minimum of 30% renewable electricity by 2020 and it is estimated that this creates a total statewide demand for utility-scale renewable energy of approximately 2,800 MW.  Not addressed in HB10-1001, however, is the need for transmission capacity to support development of Colorado resources.

The Task Force report on Renewable Resource Generation Development Areas created pursuant to legislative mandate under Colorado SB07-091, emphasized that extra high voltage transmission is necessary to support this development.  In the SB07-091 report, the Task Force mapped renewable resources throughout the state and identified existing generation and areas where high voltage transmission is needed to bring renewable resources to markets.  The report concluded that Colorado’s rich renewable resources, particularly utility-scale wind and solar, could be economically tapped if high-voltage transmission was expanded to the generation development areas. 


HB10-1365 requires changes to the generation mix in order to meet emission reduction targets and is primarily driven by the need to reduce nitrogen oxide (NOx) emissions (ground level ozone) by 70 percent to 80 percent in the Denver Metro and the North Front Range Ozone Nonattainment Area by December 2017.  There is strong public support in Colorado for shifting Colorado’s electricity generation from coal to renewable energy, energy efficiency efforts and natural gas.  The STAR report (see pages 64-65) emphasizes key findings from polling undertaken by a bipartisan research team:

1.  Voters strongly prefer (79 percent to 17 percent) renewable energy and natural gas over coal as an energy source for Colorado.

2.  Seventy-six percent of poll respondents support PSCo’s plan to shift from coal and toward natural gas and renewable energy such as wind and solar.

3.  This support is strong among all subgroups, including Democrats (89 percent), Independents (73 percent), Republicans (64 percent), and Denver Metro (78 percent) and West Slope residents (70 percent).  No subgroup demonstrated less than 62 percent support for the proposal.

4.  Support remains solid after voters hear about cost implications of the plan.  Seventy-one percent support it with 1 percent increase in customer prices, and 68 percent support it with a 3 percent increase.

5.  Nearly two-thirds (64 percent) of Coloradans reject recent coal industry objections and agree that these changes will yield critical health benefits for Colorado.

6.  Enthusiasm for this proposal may be rooted in long-held concerns about air quality in Colorado – nearly four in ten (38 percent) respondents reported air pollution as their top environmental concern.

In general, the study results indicate state-wide support for emissions reductions and support for a shift in the electricity generation mix - even at increased costs. 

On December 13, 2010 the Commission issued its written orders approving emission reduction plans for Xcel Energy and Black Hills Corporation. 

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

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