Committee begins work on hot button SB 252

But whether cooler heads will prevail is yet to be determined
The Colorado Statesman

The committee that will figure out whether SB 13-252 is actually doable begins meeting this week to review the law signed by Gov. John Hickenlooper last month.

The law requires certain rural electric providers, those with at least 100,000 meters, to increase their use of renewable energy resources from the previous 10 percent standard to 20 percent by 2020. Providers must do so without raising renewable rates by more than 2 percent.

Rural electric providers, including Tri-State Generation and Transmission, complained the six-year timeline is too short and not financially feasible under a 2-percent rate cap. The bill’s passage in May led to a four-week battle, intended to sway the governor one way or the other, between the environmental community, and the rural electric co-operatives and their conservative supporters. Hickenlooper said Tuesday night that SB 252 drew the greatest amount of pushback of any issue during the 2013 session, more than guns or the death penalty.

Pete Maysmith, executive director of Conservation Colorado, talks about the leadership that got SB 252 to the finish line during a celebratory party July 9. He is joined by Sen. Gail Schwartz, D-Snowmass Village; Gov. John Hickenlooper; Speaker of the House Mark Ferrandino, D-Denver; and Rep. Crisanta Duran, D-Denver.

In a June 5 executive order that accompanied the signing of SB 252, the governor said the bill was imperfect and did not address concerns raised by the companies impacted by the legislation. He tasked the advisory committee created by the executive order to look at the timeline and rate cap issues, and to report back to the director of the Colorado Energy Office on possible changes to the law by November 1. Hickenlooper told reporters last month he had been assured by the bill’s sponsors that they would take up that legislation, if recommended.

Former state Sen. Dan Grossman, Rocky Mountain Regional Director with the Environmental Defense Fund, chats with Gov. John Hickenlooper.

Tuesday night, the governor spoke to a celebration of SB 252 at the Byers-Evans mansion in Denver, hosted by environmental and conservation organizations that supported SB 252, including Conservation Colorado, the Alliance for a Sustainable Colorado and the Interwest Energy Alliance. Hickenlooper said the law should not divide Colorado between rural and urban. But “the challenge is how to bring everyone back together,” and to “be careful to implement the bill properly,” he said.

Anna Zawisza of the Alliance for a Sustainable Colorado chats with Sol Malick and Brett Moore, who lobbied on SB 252 on behalf of the Interwest Energy Alliance.

That’s one of the questions certain to be addressed by the SB 252 advisory committee. The original executive order set the membership at eight members: representatives from Tri-State, the Colorado Rural Electric Association, Intermountain Rural Electric Association, the renewable energy industry, nonprofit environmental community and an organization proficient in electric resource planning. The governor also added a representative from the Attorney General’s office and the Public Utilities Commission.

Ben Waters, Pam Kiely and RJ Francescon enjoy the SB 252 celebration.

The governor amended the executive order a day later to add representation from agribusiness, livestock production and irrigation production. He also brought in Commissioner of Agriculture John Salazar to serve ex-officio.

John Loewy of Conservation Colorado visits with rural energy advocate Mike Bowman of Wray.
Photos by Marianne Goodland/The Colorado Statesman

The Colorado Statesman spoke with some of the advisory committee members this week on their expectations for the meetings.

Chip Marks of Thornton, executive vice president for Eaton-based Agrifinity, represents agribusiness. Marks also operates a small hay and livestock operation with his father in Weld County.

“There’s a lot of emotion in this issue,” Marks said this week. He noted that he testified against SB 252 as an end user of electricity provided by the co-ops. “Anyone with common sense knows there’s a place for renewables,” Marks said, but his objections to SB 252 centered around its mandate and the costs it could impose on end-users in the agribusiness community. “How much of [the costs] we can absorb is anyone’s guess,” he added.

Marks welcomes the opportunity to provide input on how SB 252 will move forward. But he also hopes that the meetings will not devolve into posturing and re-debating whether SB 252 is a good law or a bad one. “The fact is, it is the law. We have to work within the confines of the executive order and whether [implementation] is feasible by 2020, what does the 2-percent rate cap look like, and what can be proposed in the next legislative session to mitigate the impact to rural ratepayers,” he said. “Mandates always cost, and how much will it be?”

“This is not the time to throw the baby out with the bathwater,” said Jerry Vaninetti of Broomfield-based RES Americas, the renewable energy representative. “We’ll brainstorm on the problem [and] work on a consensus approach.”

Vaninetti added that the bill is a little vague in some areas, and that he would like to see more specifics. He also said the 2-percent rate cap may be difficult to calculate, and that he hopes the PUC can provide factual information to assure the committee that the 2-percent cap is accurate and to what extent it can protect rural customers.

But he also raised concerns about the tenor of the discussions. “There’s been a lot of rhetoric, both pro and con. I hope we can review the facts and that this not turn into a philosophical debate,” Vaninetti said. He believes a consensus can be found once the facts are on the table. “I hope we will check our guns at the door and have a rational discussion.”

Tri-State’s Dave Lock pledged to approach the meetings with an open mind. But he said his company continues to believe the law has a lot of problems, and that the advisory committee’s charge may be too narrow in scope.

“I don’t know if the purview of the committee is really going to be encompassing enough to get to some of the issues we have, to comply with the statute,” Lock said.
Lock said he plans to learn everyone’s perspective and try to share some of the company’s concerns about SB 252.

“I will wait to see how things coalesce to see if there’s a way forward,” he said, questioning whether the 2014 General Assembly will have much appetite to do “252, the sequel.”

Lock also intends to discuss the timeline from his company’s perspective, and that may be another problem. He told The Statesman that the company’s president informed the board of directors last week that it will take another six months to figure out just how to implement SB 252. That conflicts with the timeline laid out for the advisory committee, which must have its recommendations ready by Nov. 1.

SB 252 “changes things significantly for us, and it’s not something you can just put on a spreadsheet in an afternoon,” Lock said.

Another problem that SB 252 raises for Tri-State involves who shares in the costs. Tri-State has 18 member co-ops in Colorado, and 26 others in Wyoming, New Mexico and Nebraska. When the 10-percent renewable standard was established by voter approval in 2004, the out-of-state co-ops agreed to share in the costs. That won’t be the case with SB 252, since sharing compliance costs with out-of-state partners is prohibited. This creates a much larger impact for the 18 Colorado co-ops, Lock said. “We tried to explain that to the governor, but it just didn’t get through.”

Lock said he will try to be as cooperative and helpful as possible with the committee.
“I have to feel my way around and we won’t be able to provide definitive answers,” he said.

Dan McClendon of the Delta-Montrose Electric Association said they don’t favor huge increases for their members.

“Our board position has been for many years to support local renewable generation development,” McClendon said this week. His company wants to see those resources developed and utilized when they make sense and in an affordable manner.

Delta-Montrose would prefer to see small projects in wind, solar and coal mine methane, as is allowed under SB 252. But they’d like to develop others, such as hydro.

“We have other resources we can develop and we don’t have the ability to do that” under the law, he explained.

One member of the committee who has sat at the negotiating table with Tri-State in the past is Boulder attorney Bruce Driver, who represents electric resource planning and is a consultant to Western Resource Advocates.

Driver, who helped draft SB 252 and testified in favor of it, is skeptical that changes in the law are needed. But he also plans to have an open mind regarding the meetings and the discussions.

If Tri-State and the co-ops “bring in compelling evidence that the law as written doesn’t give them the flexibility to deal with the problems” they’ve noted, that’s a reason to come up with a recommendation to the energy office, Driver said Tuesday.

But he also noted that there is no real enforcement if the co-ops don’t comply with SB 252.

“In one sense this is the honor system,” he explained.

The PUC’s only real authority regarding co-ops is in resource planning. That’s different from investor-owned utilities like Xcel and Black Hills, where the PUC has oversight on rates and other regulatory issues. “If the co-ops say they cannot met the standards” by 2020, “my response is try as hard as you can to meet the standards as soon as you can.”

Pete Maysmith of Conservation Colorado, one of the major supporters of SB 252, believes the hard feelings and political rhetoric surrounding the bill’s passage through the General Assembly will not be a part of the advisory committee process.

“I’m an optimist,” he said Tuesday. “Cooler heads will prevail.”

Maysmith wants a rational conversation with the committee on what the law actually does, which he says is to create jobs with a myriad of benefits for all of Colorado.
“This is the future for Colorado: more wind, more solar energy. Let’s talk about it in a reasonable, rational way,” he said.

He also believes the 20-percent standard is “imminently achievable” by the co-ops.
“They’re smart, resilient folks, and if they put their minds to it they can achieve it.”

Marianne@coloradostatesman.com

See the July 12 print edition for full photo coverage