By Kent Singer, CREA Executive Director –
When the Colorado legislature established the 20 percent renewable energy standard or RES for electric co-ops in 2013, the bill included one requirement that is virtually impossible for some co-ops to meet: the so-called “retail DG” provision.
Here’s how it works: As a part of our requirement to have 20 percent renewable energy by the year 2020, each co-op must derive at least 1 percent of its retail sales from DG or distributed generation (power sources that are not from the regular power grid). Of this 1 percent, at least 0.5 percent must come from small renewable resources that are located on the customer’s side of the power meter.
For electric co-ops with a large percentage of commercial or industrial loads (such as oil development and gas drilling) but a small number of total customers, this requirement is impossible to achieve. Why? In many cases, there are simply not enough co-op member-owners who want to install small renewable power generators (i.e., rooftop solar panels) on their premises to reach the amount of retail sales required in the law. Even when co-ops provide rebates or other subsidies for small renewable energy facilities, our member-owners must still pay the majority of the costs of those facilities. Until these facilities are more affordable (and the prices are definitely dropping), most co-op member-owners are not interested in owning their own renewable power resources behind the meter.
Another problem with the retail DG requirement is that it is tied to total retail sales of electric co-ops, and not just to residential sales. So, for electric co-ops with those large commercial and industrial sales, they have to install much more behind-the-meter renewable energy compared to co-ops with mostly residential loads. Generally, these behind-the-meter sources of renewable energy are more costly than larger renewable installations. That is why the Colorado Rural Electric Association is asking the state legislature to pass a bill to change this requirement.
To address this problem, we are proposing Senate Bill 15- 046. We are not proposing a reduction of the 20 percent RES or a change in the 2020 deadline. We are seeking a change to the retail DG requirement that was included in SB 13-252.
SB 15-046 has several components. First, SB 15-046 eliminates the distinction between wholesale and retail distributed generation. Again, this will not affect the overall 20 percent RES requirement nor will it affect the 1 percent DG requirement in current law. What it would do, however, is relieve electric co-ops of the obligation to subsidize some of the least cost-effective renewable energy facilities. If electric co-ops are required to incorporate a certain percentage of renewable power resources, we ought to be allowed to do so in the most cost-effective way possible.
Second, the bill makes it clear that if the retail DG provision stays in the law, community solar gardens count toward that requirement.
As of the writing of this column, we are continuing to meet with a broad group of stakeholders in an attempt to reach an agreement on our bill. There are a number of amendments being considered, and we will attempt to be responsive to the interests of other groups so long as we can still achieve our objective of the more cost-effective integration of renewable energy.
Today, electric co-ops are working hard to meet the 20 percent requirement with prudent investments in a variety of renewable energy resources. We hope the legislature will recognize our unique circumstances with respect to retail DG and agree to make statutory revisions that will enable more cost-effective investments in renewable energy to continue.
We are grateful to state Sen. Kevin Grantham (R-Dist. 2) for being the prime sponsor of the bill in the Colorado Senate, and to state Sen. Kerry Donovan (D-Dist. 5) for initiating the stakeholder meetings that we hope will lead to successful passage of SB 15-046.