Implementing Colorado's RPS by lVi34y


									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

                                       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     1% of retail electricity sales (MWh)
         2011 – 2014:    3%
         2015 – 2019:    6%
         2020+       :    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

  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 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
                                             New Non-Renew able

                                            Existing Resources                           Existing Resources

                                            Wind                                         Wind
                                            Hydro                                        Hydro
                                            Gas                                          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

 Expands RES to all electric utilities except    Adds “recycled energy” to list of eligible
  municipal utilities <40,000 customers            energy resources
      REA’s (Electric Coops) included
                                                  Resource bands (only get one)
 IOU RES increased to                                  1.25 x for in-state generation
      2008 – 5%                                        1.5 x for community R/E projects
      2011 – 10%                                       3.0 x for solar for REAs & munis
      2015 – 15%
      2020 – 20%                                 Increases retail rate impact to 2% for
 REA & Muni RES                                        Leaves intact the method for determining
      2008 – 1%                                         rate impact
      2011 – 3%                                        Allows QRU to spend full amount even if
                                                         RES is met
      2015 – 6%
      2020 – 10%
                                                  Rate impact for REAs set at 1%
 Repeals the opt-out provision
      REAs and large munis to provide compliance    Allows QRUs to rate base a portion of
       report to PUC but not for approval             new resources acquired under PPAs
      Small munis self certify
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 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

  2005 GHG Emissions:
     118 MMTCO2e

    BAU 2020 GHG:
     158 MMTCO2e

                             Colorado GHG Sources, 2000
Colorado (Governor’s) Climate Action Plan
Colorado Climate Action Plan
       Matt Baker, Commissioner
  Colorado Public Utilities Commission
            1560 Broadway
        Denver, Colorado 80202
Phone: 303.894.2007  Fax: 303.894.2065

To top