cu boulder re policy, r mignogna 04oct10

8/8/2019 CU Boulder RE Policy, R Mignogna 04Oct10

1/16R. Mignogna, 2010 1

Colorados Renewable Energy

Standard and the PublicUtilities Commission

Richard P. Mignogna, Ph.D., P.E.Colorado Public Utilities Commission

1560 BroadwayDenver, Colorado 80202 USA

Tel: 303.894.2871 ~ Fax: [email protected]

04 October 2010University of Colorado

Boulder, CO

Public Utilities Commission

Three commissioners, appointed by the Governor Four year terms No more than two from the same party

Present commission make-up Ron Binz, D, Chairman Jim Tarpey, R Matt Baker, D

Jurisdiction Energy

l Electric utilities (investor owned, 2)l Gas utilities (investor owned, 6)

Transportationl Common carriers in-statel Taxis

Telecommunicationsl Telephone service providers essential services, noncompetitive

Rail & water Gas pipeline safety
mailto:[email protected]:[email protected]


2/16R. Mignogna, 2010 2

Public Utilities CommissionTitle 40 C.R.S. Utilities Law

PUC authorization: 40-2-101(1) C.R.S. A public utilities commission is herebycreated, which shall be known as the public utiliti es commission of the state ofColorado, to consist of three members who shall be appointed by the governorwith the consent of the senate.

40-1-103. Public utility defined. (1) (a) (I) The term "public utility", when used inarticles 1 to 7 of this title, includes every common carrier, pipeline corporation, gascorporation, electrical corporation, telephone corporation, water corporation,person, or municipality operating for the purpose of supplying the public fordomestic, mechanical, or public uses and every corporation, or person declaredby law to be affected with a public interest, and each of the preceding is herebydeclared to be a public utility and to be subject to the jurisdiction, control, andregulation of the commission and to the provisions of articles 1 to 7 of this title.

PUC regulates 570 natural gas, electric, telecom munications, steam, and water utilities 189 transportation carriers

Safety jurisdic tion over 69 natural gas and propane pipeli ne operators 11,678 transportation carriers

Public Utilities Commission

40-3-101. Reasonable charges - adequate service. (1) All charges made,demanded, or received by any publ ic utilit y for any rate, fare, produc t, orcommodity furnished or to be furnished or any service rendered or to be renderedshall be just and reasonable . Every unjust or unreasonable charge made,demanded, or received for such rate, fare, product or commodity, or service isprohibited and declared unlawful. Rates and charges demanded or received byany public utility for gas transportation service furnished or to be furnished shallnot be deemed to be unjust or unreasonable so long as said rate or charge is nogreater than a maximum rate and no lower than a minimum rate determined bythe commission (or, in the case of a municipal utility, by the governing body of themunicipal utility in accordance with sections 40-3-102 and 40-3.5-102) to be justand reasonable, Nothing in this subsec tion (1) shall l imit or r es tr ic t thecommission's authority to regulate rates and charges, correct abuses, or preventunjust discrimination.(2) Every public utility shall furnish, provide, and maintainsuch service, instrumentalities, equipment, and facilities as shall promote thesafety, heal th , comfort , and convenience of i ts patrons, employees, and thepublic,and as shall in all respects be adequate, efficient, just, and reasonable.


3/16R. Mignogna, 2010 3

PUC and its Staff

PUC is a Type 1 agency which exercises its prescribed statutory powers,

duties, and functions, including rulemaking, regulation, licensing, and

registration, the promulgation of rules, rates, regulations, and standards,

and the rendering of findings, orders, and adjudications, independently of

the head of the principal department (Dept of Regulatory Agencies).

Policy autonomous: operates outside the direct control of the executive

director or governor (in theory)

However, budgeting, purchasing, planning and related management functions

do come under the parent department

The Staff of the commission does not come under the jurisdiction of the

Commission itself.


4/16R. Mignogna, 2010 4

PUC Roles and Responsibilities

Quasi legislative rulemaking Electric rules 4-CCR-723-3000 et.seq. Renewable Energy Standard, 4-CCR-723-3650 3665

Quasi judicial adjudicate applications and complaints PSCo Electric Resource Plan, docket 07A-447E PSCo 2009 RES Compliance Plan, docket 08A-532E Black Hills 2009 RES Compliance Plan, docket 08A-470E PSCo Smart Grid City CPCN, docket 10A-124E PSCo HB10-1365 Plan (CACJA), docket 10M-245E

Miscellaneous dockets Investigatory dockets

l Regulatory Rate Incentives, docket 08I-113EGl Consumer Rate Incentives, docket 08I-420EGl Smart Grid Privacy, docket 09I-593EG

Transmission, docket 08M-521E

PUC and its Staff

PUC Staff

Separated from the Commission itself

Appointed by Director of PUC who is appointed by Executive Director of DORA

Staff is bifurcated into Advisory and T rial and now R&EI which is???

Trial Staff acts as an independent party in litigated dockets just as any other

intervenor, except:

l Trial Staff has access to all confidential materials

l Trial Staff has audit powers

Advisory Staff acts as advisors to, and an extension of, the commissioners

Ex-parte rules govern internal communication in litigated dockets as well as

communication between any party ( including Trial Staff) and the

commissioners.


5/16R. Mignogna, 2010 5

RPS & Public Policy Goals

What do you hope to achieve?

Energy security

Conservation of scarce resources Fuel Water

Reduce environmental impacts GHG is the current concern but other issues as well

Economic development

Accelerate technological advance & market development Cost reduction Promote specific resources (e.g., solar)


6/16R. Mignogna, 2010 6

Legislative Declaration of Intent

Amendment 37 Ballot Initiative Where it Began

Therefore, in order to save consumers and businesses money, attract new businesses and

jobs, promote development of rural economies,minimize water use for electricity generation,diversify Colorados energy resources, reduce the impact of volatile fuel prices, and improve the natural environment of the state , it is in the best interests of the citizens of Colorado to develop and utilize renewable energy resources to the maximum practicable extent.


7/16R. Mignogna, 2010 7

Legislative & Regulatory History

Amendment 37 passed 02 November 2004 1,066,023 (53.6%) In Favor, 922,577 (46.4%) Opposed First RPS in the country approved as a citizen initiative Added 40-2-124, C.R.S. to the Colorado Revised Statutes

Clarifying legislation SB05-143 Changed rate impact limitation from 50 per month for residential

customers to 1% annually for all retail customers

Rule making: Commenced Spring 2005 Rules effective 02 July 2006

First compliance year: 2007

HB07-1281, Enhanced RES signed into law Mar2007

Subsequent legislation in 2008 and 2009

HB10-1001, Super-Enhanced RES, Mar2010 Also, HB10-1342, HB10-1349, HB-10-1418

HB07-1281 Renewable Energy Standard

Summary Expands RES to all electric utilities except

municipal utilities


8/16R. Mignogna, 2010 8

HB10-1001 Renewable Energy StandardSummary

Expands RES targets for IOUs andreplaced the solar set-aside with a DGcarve out

IOU RES increased to 2007 3% 2008 5% 2011 12% 2015 20% 2020 30%

REA & Muni RES remains at 2008 1% 2011 3%

2015 6% 2020 10%

Replaces the solar carve out with a DGcarve out:

2011 1.00% 2013 1.25% 2015 1.75% 2017 2.00% 2020 3.00%

At least half of the DG carve out mustcome from retail DG

Retains retail rate impact of 2% for IOUs

Rate impact for REAs remains at 1%

Retail Rate Impact Rule40-2-124(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.


9/16R. Mignogna, 2010 9

Rate Impact Limitation

R. Mignogna, 2007

RES / No RES ANALYSIS

No RES RES

T O T A L C U S T O M E R B I L L S ( U S $

Existing Resource s

WindHydroGas

Coal

Existing Resources

WindHydroGas

Coal

2%

New Non-Renew ableEquivalents

New Renewables- Wind- Solar

RATE IMPACT CAP

2% 2% 2%

Mechanisms to circumvent a rate cap:

Provide a waiver for a given resource from inclusion in thecalculation

Move the time fence

Reclassify new resources as existing l Resets the base

Fail to consider the Electric Commodity Adjustment (ECA)

Create a new categoryl Section 123 ( 40-2-123, C.R.S.)


10/16R. Mignogna, 2010 10

Recent PUC Resource Acquisition Changes

Change from Least Cost Planning to Electric Resource Planning withportfolio evaluation based on PVRR

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-efficienttechnologies in its consideration of generation acquisitions for electricutilities, bearing in mind the beneficial contributions such technologiesmake to Colorados energy security, economic prosperity, environmentalprotection, 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.

Definition of Sec 123 resource

From Decision C08-0929 (07A-447E Phase I decision):

An eligible energy resource will be considered a new clean energy,or energy efficient technology, or a demonstration project if it isclean and incorporates one or more technologies, representing asubstantial portion of its overall installed cost, that have not beenregularly commercially demonstrated, up to the point in time that theresource is formally bid, or if not bid, acquired.

Examples: CSP w/thermal storage Compressed air energy storage (CAES) Battery storage Emerging solar technologies

l Dish sterlingl Central receiver/power tower w/thermal storagel Highly concentrating PVl Integrated solar/combined cycle


11/16R. Mignogna, 2010 11

PSCo ERP, Docket 07A-447E

Phase I Decision C09-0929 (19Sep2008) approved overall resourceplan including a minimum of 200MW of Sec 123 Resources (CSP)

Phase II Decision C09-1257 (06Nov2009) approved Portfolio 5 whichincluded:

921MW Gas resources 701 MW Wind resources 250 MW CSP w/storage 105 MW PV

The CSP and PV acquisition was contingent on a CPCN for a newtransmission line out of the San Luis Valley by 2013

Delay in the litigation for the SLV transmission line prompted PSCo tofile an amended resource plan (docket 10A-377E) that would limit solarout of SLV to 185 MW

125MW of CSP would be at a higher per MWh price raising the question ofwhether it is still in the public interest compared to lower cost gas resources

Bids advanced to dynamic modeling:

Levelized energy costs for bids advanced to dynamic modeling:

How to drive intervenors to distraction!Example from PSCo ERP (docket 07A-447E)


12/16R. Mignogna, 2010 12

Transparency in resource planningExample from PSCo ERP (docket 07A-447E)

HB10-1365 CACJA, Docket 10M-245E

Adds 40-3.2-201 et. seq to CRS

Requires that by 15Aug2010, IOUs must submit to PUC an emissionsreduction plan for its coal fired units that

Repowers, replaces or retrofits a minimum of 900MW or 50% of its coal firedgeneration

Replacement with natural gas or other low emitti ng resources

Goal is to reduce NOx by at least 70-80% from 2008 levels

CDPHE to approve the emissions reduction plan for conformance withanticipated federal EPA requirements

Requires PUC decision by 15Dec2010

If the utility disagrees with PUC modifications to its proposed plan, theutility may withdraw its application


13/16


14/16R. Mignogna, 2010 14

HB10-1365Average Annual Rates

PSCo ERP, Docket 07A-447E

Under the most likely portfolios, PSCos renewablegeneration could exceed 25% by 2015

This is far in excess of the RES

But the cost will be far beyond the 2% rate cap

Should ratepayers bear this cost?

Should the utility profit from the additional RECs created?

In a regulated monopoly utility, how should the PUCbalance the interests of the IOU, ratepayers, and otherstakeholders?


15/16R. Mignogna, 2010 15

Current RE policy questions to ponder

Should there be a federal RPS? What if it is less str ict than an individual state RPS? Are there workable alternatives?

Should coops and munis be subject to the RES?

How do RECs and carbon credits/offsets work together? Or, do they? Can REC markets and carbon offset markets coexist?

Feed-in tariffs (FIT) as a RE incentive mechanism How do they fit in an RPS? Just for solar or? Do they work with net metering? How do they compare to other incentive mechanisms? On what criteria should the decision to implement a FIT be made?

Thank you


16/16

Contact :

Richard P. Mignogna, Ph.D., P.E.Colorado Public Utilities Commission

1560 BroadwayDenver, Colorado 80202

Phone: 303.894.2871 Fax: 303.894.2813Email: [email protected]
mailto:[email protected]:[email protected]

cu boulder re policy, r mignogna 04oct10

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