IREA fights renewable standard
As two sides of the renewable-energy mandate hold their collective breath over whether Gov. John Hickenlooper will sign SB 252 by June 7, the opposition weighs in on the bill passed by the Colorado General Assembly last month.
The bill doubles the renewable energy standard from 10 to 20 percent by 2020 for the state’s largest electric associations, which includes Intermountain Rural Electric Association that serves Teller County.
“We want to be able to control costs for our customers, so any time a bill has a mandate that causes us to spend money unnecessarily, at a minimum we’re going to raise our eyebrows and probably try to stop the requirement,” said Mike Kopp, manager of corporate affairs for IREA.
At issue for the co-op is the secretive nature of the bill sponsored by John Morse, senate president, Mark Ferrandino, House speaker, and Gail Schwartz, state representative from Snowmass Village. All are Democrats.
“We engaged in good faith with both Republicans and Democrats yet the sponsors introduced the bill without as much as a simple phone call to us,” Kopp said. “The bill was hatched in secret, sprung on the General Assembly and rural-electric customers without any advance notice.”
It’s the mandate part that riles co-op directors. As it is, Kopp said, Colorado has excess generation capacity. “Then the General Assembly comes along and wants us to build more of a certain kind of electrical-generating capacity, even though it’s not needed,” Kopp said. “When we are able to draw our power allotment from Comanche 3 our prices stay down.”
According to an article in the Colorado Independent newspaper, published Aug. 20, 2011, IREA invested $366 million in the coal-fired plant and is a one-quarter partner in the Xcel Energy operation.
“It almost doesn’t matter how cheap renewable energy is if we have to reduce an expensive asset like the Comanche 3 in order to bring the wind onto the system. There is real cost in doing that,” Kopp said.
IREA receives 9 percent of its power from renewable-energy sources. “We have a pretty green system but there comes a point when we’d like to see the legislature be more mindful of the cost impact of these policies,” Kopp said.
The association buys power from Xcel Energy, including some renewable sources. “It’s a mix of qualifying sources, including wind,” he said. “The general trend is naturally for integration of more of these kinds of energy and more so as the market naturally makes them more affordable.”
As it is, IREA is a connection source for customers who invest in solar or wind power. “We’ll net-meter and buy their energy when the meter turns backward, when they’re producing more than they are using,” Kopp said. “We don’t have a reflexively-negative attitude about renewable energy we’re just very cost-conscious.”
In opposing the bill, IREA highlights issues they consider perplexing. “It’s a bill dealing with technical subject matter which was crafted without the technical input of the utilities that will be impacted,” Kopp said.
In addition, constituents of the three sponsors are not affected by the bill, as two are not served by rural electric association and another, Snowmass, is exempted as the bill affects only those with 100,000 0r more customers. IREA has more than 140,000 customers.
Another wrinkle is storage. “If somebody solves the energy-storage problem the game changes dramatically,” Kopp said. “Renewable-energy sources do become dispatchable because you can store energy and use it any time. But we don’t have legitimate storage of industrial scale.”
Ultimately, for IREA, it’s about cost. “The fact of the matter is that if it will save money, can be produced more cheaply, you’re not going to need mandates,” Kopp said. “Under the right economic circumstances, maybe mandates make sense, but if that’s the case mandates won’t be needed. We don’t need the legislature telling people to go save money.”
However, if the governor signs the bill, the issue isn’t over. “It the bill is signed into law, we’ll go to work analyzing and do everything we can to minimize the economic impact,” Kopp said.
At press time, the office of Sen. John Morse, had not replied to the Courier request for information.