Utilities hunt for loopholes

By BILL McKEOWN - THE GAZETTE

Colorado Springs Utilities is looking at options to get out from under renewable energy standards approved Tuesday by state voters.

The utility is not alone.

Sedalia-based Intermountain Rural Electric Association, the largest rural utility in the state with 122,000 customers in 10 counties, is considering how to sidestep an amendment critics say will cost consumers money and reduce local control over utilities.

Colorado Springs Utilities spokesman Steve Berry said employees are trying to produce numbers showing the costs and potential rate impacts of meeting the renewable energy standards. It then will look at possible legal and legislative options and make recommendations to the Colorado Springs City Council, which governs the publicly owned utility, possibly by next month.

“We were against the amendment for very clear reasons, and that hasn’t changed,” Berry said. “We feel rather than a mandate dictated by the state and the PUC (Public Utilities Commission), which we are not under, our customers should pick what mix of renewable we have.”

Denver-based Xcel Energy, the largest utility in the state, will take a different tack.

Spokesman Mark Stutz said the utility will bow to the will of voters and attempt to supply the renewable energy called for in the amendment.

Still, Stutz said the utility will try to lobby legislators to clarify or modify some amendment provisions before it becomes law, most importantly who should pay for adding electricgenerating capacity produced by renewable energy sources.

The amendment caps residential rate increases at 50 cents a month to pay for adding renewable energy infrastructure such as wind turbines, but utilities say it will cost far more than that to provide the energy, raising the specter of big rate increases for commercial and industrial customers.

The amendment requires utilities that serve more than 40,000 customers to provide 3 percent of electricity sales from renewable energy sources by 2007; 6 percent by 2011; and 10 percent by 2015.

Of those amounts, 4 percent must come from solar power, which utilities say is extremely expensive compared with other forms of renewable energy, particularly wind power.

Meeting the renewable standard will be far easier for Xcel than for other large utilities in the state.

The utility has 250 megawatts of wind power and plans to add 500 megawatts by the end of next year. That would bring the utility in compliance with the amendment through 2010, Stutz said.

Colorado Springs Utilities derives about 1 percent of its electricity from wind and 9 percent from medium-sized hydropower. But the amendment excludes utilities from meeting the standards with all but the smallest hydro units, presumably because of environmental concerns.

Berry and Bill Schroeder, manager of public affairs for Intermountain, said the utilities are examining the votes for and against Amendment 37 in their areas.

They said it appeared their customers had rejected the amendment.

The amendment allows utilities to opt out of the standards if a majority of customers approves an exemption in a special election. If city officials want to place such an item on the April 5 municipal ballot, they still have several weeks to do so.

Stutz said Xcel will not seek to opt out of the amendment’s requirements. With 1 million customers, he said, such an election would be a costly exercise. Besides, he said, the majority of the utility’s customers live in counties that heavily favored the amendment.

Final vote results showed 65.7 of Colorado voters approved the amendment. In El Paso County, however, only 44.5 percent of voters voted for it.