colorado’s renewable portfolio standard making it a success matthew baker, commissioner colorado...
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Colorado’s Renewable Portfolio Colorado’s Renewable Portfolio Standard Standard Making it a SuccessMaking it a Success
Matthew Baker, Commissioner
Colorado Public Utilities Commission
1560 Broadway
Denver, Colorado 80202 USA
Tel: 303.894.2007 ~ Fax: 303.894.2065
15 August 2008EUCI RPS Planning & Implementation Conference
San Francisco, CA USA
Colorado Electricity Sales by Ownership Type, 2004
Colorado Energy Forum, 2006, Colorado’s Electricity Future, Sep2006
PSCo & Aquila
Colorado Renewable Energy Standard (RES)Essential Elements (page 1 of 5)
Each IOU shall generate, or cause to be generated, electricity fromeligible renewable energy resources in the following minimum amounts base on percentage of retail electricity sales (MWh)
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 as1.25 kWh for purposes of compliance
Each REA and Muni shall generate, or cause to be generated, electricity fromeligible renewable energy resources in the following minimum amounts
2008 – 2010 1% of retail electricity sales (MWh) 2011 – 2014: 3% 2015 – 2019: 6% 2020+ : 10%
Original RES Expanded RES2007: 3% 3%2008 – 2010 3% 5%2011 – 2014: 6% 10%2015 – 2019: 10% 15% 2020+ : 20%
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 attributes5-year lifespanNo 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 2 of 5)
Solar Incentive Program:
$2.00 per watt rebate for solar photovoltaic (PV) systems up to amaximum size of a 100 kW ($200,000). REC price to be determinedby QRU (see below)
Allows customers to obtain rebates for any PV system installedafter effective date of the statute, December 1, 2004
PV customers can also receive a REC payment for the RECstheir system will generate. Price not specified in rule, allowsQRU 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 3 of 5)
Cost Recovery:
Rules allow for up-front cost recovery via forward lookingRenewable Energy Standard Adjustment (RESA)
Must be identified separately on customer billsPSCo 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 two percent of customer bills annuallyNet of new alternative nonrenewable resourcesRequires computer modeling of RES and NoRES plansAlternate 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
Colorado Renewable Energy Standard (RES)Essential Elements (page 4 of 5)
XX
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
R. Mignogna, 2007
RES / No RES ANALYSIS
No RES RES
TO
TA
L C
US
TO
ME
R B
ILL
S (
US
$)
Existing Resources
WindHydroGas
Coal
Existing Resources
WindHydroGas
Coal
2%
New Non-Renew able Equivalents
New Renew ables- Wind- Solar
RATE IMPACT CAP
Other Provisions:
Net metering for IOUs (not required of REAs or Munis)Resources up to 2 MWExcess generation paid annually at average hourly incremental cost of
electricity supplySecond meter required for systems >10 kW for counting RECs
Interconnection based on FERC Order 2006
Colorado Renewable Energy Standard (RES)Essential Elements (page 5 of 5)
HB07-1281 – Renewable Energy StandardSummary Expands RES to all electric utilities except
municipal utilities <40,000 customersREA’s (Electric Coops) included
IOU RES increased to2008 – 5%2011 – 10%2015 – 15%2020 – 20%
REA & Muni RES2008 – 1%2011 – 3%2015 – 6%2020 – 10%
Repeals the opt-out provisionREAs and large munis to provide compliance
report to PUC but not for approvalSmall munis self certify
Adds “recycled energy” to list of eligible energy resources
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 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%
Allows QRUs to rate base a portion of new resources acquired under PPAs
2007 Legislative Activity
PUC Related Legislation
2008 Legislative Activity
REA/Muni
net metering
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 cost-effective 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
Colorado GHG Sources, 2000
2005 GHG Emissions:118 MMTCO2e
BAU 2020 GHG:158 MMTCO2e
Colorado (Governor’s) Climate Action Plan
Colorado Climate Action Plan
Contact:
Matt Baker, CommissionerColorado Public Utilities Commission
1560 BroadwayDenver, Colorado 80202
Phone: 303.894.2007 Fax: 303.894.2065 Email: [email protected]