Transcript Implementing Colorado's RPS

Colorado’s Renewable Portfolio Standard
Making it a Success
Matthew Baker, Commissioner
Colorado Public Utilities Commission
1560 Broadway
Denver, Colorado 80202 USA
Tel: 303.894.2007 ~ Fax: 303.894.2065
[email protected]
15 August 2008
EUCI RPS Planning & Implementation Conference
San Francisco, CA USA
Colorado Electricity Sales by Ownership Type, 2004
PSCo & Aquila
Colorado Energy Forum, 2006, Colorado’s Electricity Future, Sep2006
Colorado Renewable Energy Standard (RES)
Essential Elements (page 1 of 5)
 Each IOU shall generate, or cause to be generated, electricity from
eligible renewable energy resources in the following minimum amounts base on percentage of retail
electricity sales (MWh)
Original RES Expanded RES
2007:
3%
3%
2008 – 2010
3%
5%
2011 – 2014:
6%
10%
2015 – 2019: 10%
15%
2020+
:
20%
 Solar set aside: 4% of RES from solar energy
Half of solar set aside from customer sited resources
Applies only to IOUs
 25% Colorado bonus: each kWh generated in Colorado shall count as
1.25 kWh for purposes of compliance
 Each REA and Muni shall generate, or cause to be generated, electricity from
eligible renewable energy resources in the following minimum amounts




2008 – 2010
2011 – 2014:
2015 – 2019:
2020+
:
1% of retail electricity sales (MWh)
3%
6%
10%
Colorado Renewable Energy Standard (RES)
Essential Elements (page 2 of 5)
 Energy generated on or after January 1, 2004 is applicable
 No unbundling – RECs accompany electrical generation, BUT…
 Utilities can use purchased RECs for compliance with all but the
customer sited solar component
 REC attributes
 5-year lifespan
 No geographic limits
 Can borrow forward 2 years into the future for the first 4 compliance
years
 Can carry over excess costs into the following year for recovery
 No stipulated penalties for noncompliance
 1.5X multiplier for “community” projects
Colorado Renewable Energy Standard (RES)
Essential Elements (page 3 of 5)
Solar Incentive Program:
 $2.00 per watt rebate for solar photovoltaic (PV) systems up to a
maximum size of a 100 kW ($200,000). REC price to be determined
by QRU (see below)
 Allows customers to obtain rebates for any PV system installed
after effective date of the statute, December 1, 2004
 PV customers can also receive a REC payment for the RECs
their system will generate. Price not specified in rule, allows
QRU to adjust the REC price based on customer response.
Presently set at $2.50 per watt for PSCo and Aquila
 Specifies 20-year term for REC/energy purchases
 No solar requirement for REAs and Munis
 3.0X multiplier for solar
Colorado Renewable Energy Standard (RES)
Essential Elements (page 4 of 5)
Cost Recovery:
 Rules allow for up-front cost recovery via forward looking
Renewable Energy Standard Adjustment (RESA)
 Must be identified separately on customer bills
 PSCo RESA started at 0.6% on March 1, 2006, later increased to 1.42%
 PSCo now seeking further increase to 2.0%
 Aquila RESA started at 1.0% on September 1, 2006
 Rate impact limited to one
XX two percent of customer bills annually
 Net of new alternative nonrenewable resources
 Requires computer modeling of RES and NoRES plans
 Alternate calculation for smaller QRU’s (Aquila) based on cost of solar alone
 REA/Muni rate impact cap = 1.0 percent
 Administrative costs capped at 10% of total annual collection
 QRU may earn an extra profit equal to 50% of the net economic benefit
to customers from a renewable facility it invests in
Retail Rate Impact Rule
§40-2-124(1)(g)(I),C.R.S., rev.
“For each qualifying utility, the commission shall
establish a maximum retail rate impact for this
section of two percent of the total electric bill
annually for each customer. The retail rate
impact shall be determined net of new alternative
sources of electricity supply from noneligible
energy resources that are reasonably available
at the time of the determination.”
REA & Muni impact limited to one percent.
Rate Impact Limitation
RES / No RES ANALYSIS
RATE IMPACT CAP
New Renew ables
- Wind
- Solar
TOTAL CUSTOMER BILLS (US $)
2%
New Non-Renew able
Equivalents
Existing Resources
Existing Resources
Wind
Hydro
Gas
Wind
Hydro
Gas
Coal
Coal
No RES
RES
R. Mignogna, 2007
Colorado Renewable Energy Standard (RES)
Essential Elements (page 5 of 5)
Other Provisions:
 Net metering for IOUs (not required of REAs or Munis)
 Resources up to 2 MW
 Excess generation paid annually at average hourly incremental cost of
electricity supply
 Second meter required for systems >10 kW for counting RECs
 Interconnection based on FERC Order 2006
HB07-1281 – Renewable Energy Standard
Summary
 Expands RES to all electric utilities except
municipal utilities <40,000 customers
 Adds “recycled energy” to list of eligible
energy resources
 REA’s (Electric Coops) included
 IOU RES increased to
 2008 – 5%
 2011 – 10%
 2015 – 15%
 2020 – 20%
 Resource bands (only get one)
 1.25 x for in-state generation
 1.5 x for community R/E projects
 3.0 x for solar for REAs & munis
 Increases retail rate impact to 2% for
IOUs
 REA & Muni RES
 2008 – 1%
 2011 – 3%
 2015 – 6%
 2020 – 10%
 Leaves intact the method for determining
rate impact
 Allows QRU to spend full amount even if
RES is met
 Rate impact for REAs set at 1%
 Repeals the opt-out provision
 REAs and large munis to provide compliance 
report to PUC but not for approval
 Small munis self certify
Allows QRUs to rate base a portion of
new resources acquired under PPAs
2007 Legislative Activity
PUC Related Legislation
2008 Legislative Activity
PUC Resource Acquisition Changes (1 of 2)
 Change from Least Cost Planning to Electric Resource Planning
 Sec 123 Resources (§40-2-123(1), C.R.S.)
“The commission shall give the fullest possible consideration to the costeffective implementation of new clean energy and energy-efficient
technologies in its consideration of generation acquisitions for electric
utilities, bearing in mind the beneficial contributions such technologies
make to Colorado‘s energy security, economic prosperity, environmental
protection, and insulation from fuel price increases. “
 Rule 3602(o)):
“Section 123 resources” means new energy technology or demonstration
projects, including new clean energy or energy-efficient technologies under
§ 40-2-123 (1), C.R.S., and Integrated Gasification Combined Cycle
projects under § 40-2-123(2), C.R.S.
PUC Resource Acquisition Changes (2 of 2)
 Rule 3602(c):
“Cost-effective resource plan” means a designated combination of new
resources that the Commission determines can be acquired at a
reasonable cost and rate impact. A cost effective resource plan may
comprise the following: renewable resources to comply with the
Renewable Energy Standard, 4 CCR 723-3-3650 et seq.; demand-side
management to comply with § 40-3.2-104, C.R.S.; Section 123 resources
proposed to be acquired without competitive bidding; selected bids from a
competitive acquisition process; and, backup bids intended to replace the
loss of one or more of the selected bids.
 Issues concerning how RES rules and new ERP rules interact.
Conflicts impact:
Resource acquisition (especially wrt/Sec 123 Resources)
Cost recovery
Climate Change Initiatives
2005 GHG Emissions:
118 MMTCO2e
BAU 2020 GHG:
158 MMTCO2e
Colorado GHG Sources, 2000
Colorado (Governor’s) Climate Action Plan
Colorado Climate Action Plan
Contact:
Matt Baker, Commissioner
Colorado Public Utilities Commission
1560 Broadway
Denver, Colorado 80202
Phone: 303.894.2007  Fax: 303.894.2065
Email: [email protected]