Political Factors Affecting the Renewables and Energy Efficiency

Remarks of Ron Binz, Chairman

Colorado Public Utilities Commission

October 15, 2010

IPPAI – NRRI ConferenceNew York City

Caveat

• I am one of three equal commissioners

• My positions are my own

• I am confused by many things and have not made up my mind on much at all

• I don’t even agree with some of the things I say

• Good advice:don’t believe everything you think

Outline of this presentation

• High-level considerations of US Climate Policy

• Renewable portfolio standards, energy efficiency and controlling GHG emissions

• One state’s experience– Planning– Renewables– GHG reduction

High level considerations on US GHG policy

• Congress has been unable to complete action• EPA activities are driving change

– CAA rules; CO2 regulation

• States and regions have been moving forward– State RPS standards– State EE activity– State and Regional Climate Agreements

• Power industry is close to consensus• Regulators have consensus on many issues• Public opinion

EPRI Prism/Merge

9

Available at

www.fortnightly.com

•Electricity first

• Carbon cap

•$4/ton CO2 research fee

•Allowance allocation

•Early action provision

What is Colorado Doing?

The Setting

• Two regulated electric utilities; 55% of sales

• State RES – 30% by 2020 for IOUs– Xcel: ~12% renewable energy level now

• Utility CO2 reduction goals (-20% by 2020)

• Clean Air/Clean Jobs Act case underway

• Rates up due to new (fossil) generation facilities

Generation Fuels in ColoradoColorado Electric Generation

by Fuel Source 1990-2008

Coal

Hydro

NG

Renewable

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Gig

awat

thou

rs

History of Colorado’s RPS• Amendment 37 (2004)

– Voter initiated; 10% by 2020; solar carve-out; net metering

• HB 1281 (2007)– 20% by 2020; 10% for Munis, Coops; solar carve-out

• HB 1001 (2010)– 30% by 2020; carve out for DG of 3% by 2020

(~650 MW PV)

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• Reduce Colorado’s carbon emissions by 20% below 2005 levels by 2020

• Reduce Colorado’s carbon emissions by 80% below 2005 levels by 2050

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Our State Energy Priorities• Stress renewable resources

– Aggressive State Renewable Portfolio Standard – Progressive resource planning at Commission– Healthy renewables industry– A commitment to addressing climate change

• Boost Energy Efficiency– Customer: education– Utility: engagement– Regulatory: incentive regulation; rate structure changes

• Advanced technologies development– Research and demonstration for carbon sequestration– Concentrating solar field at PSCo’s Cameo coal-fired plant– CAES and other storage strategies– Smart grid test bed in Boulder, Colorado

• Transmission development– SB 100 in Colorado– Western Renewable Energy Zones participation

Gas Price

Increases Comanche 3

FSV Turbines

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Xcel Energy

• ~7000 MW peak load

• 2004-present– 1,200 MW wind capacity

– 60 MW solar capacity

• By 2015– Additional 750 MW wind capacity resulting in 2000 MW

– >250 MW new solar thermal

– >160 MW new photovoltaic

HB10 -1365

HB 1365 Triggers a Coordinated, Multi-Pollutant Strategy

• Ozone• Regional Haze• Carbon Dioxide

• “A coordinated plan of emission reductions from these coal-fired power plants will enable Colorado rate-regulated utilities to meet the requirements of the federal Clean Air Act and protect public health and the environment at a lower cost than a piecemeal approach.”

For a copy of legislation: go to www.leg.state.co.us, follow links to HB10-1365

Structure of HB10-1365• Utility must consult with CDPHE on plan to meet current and projected EPA

clean air rules.

• Utility files plan with PUC to improve air quality, addressing at least 900 MW of coal generation.

• Utility required to conduct various studies:– Plan impacts on NOx emissions

– Cost of controlling emissions at existing coal plants

– Cost of replacing 900 MW coal generation with natural gas

– Impacts on system reliability

• CDPHE will participate in PUC process.

• Any PUC-approved plan must meet projected EPA rules.

• Air Quality Control Commission will incorporate approved plan into State Implementation Plan (SIP) for addressing regional haze.

$5.88

Long Term Natural Gas Contracts

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San Luis Valley

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Solar Electric Density

• Use: 100 MW(ac)/mile2

• Colorado Peak Integrated Demand: 11GW

• Result: 110 mile2 required land area

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San Luis Valley

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But what if 11 GW of solar were spread around the state in 100 MW installations?

It might look like this...

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Thanks for the invitation.

I look forward to your questions.