More corporate customers want renewable energy options. What happens when an electric utility can’t offer that?
United Power has been meeting with other electric cooperatives this month, in an effort to build support for its proposal to change the bylaws of its power supplier, Tri-State Generation and Transmission Association. Those meetings follow United Power’s invitations to discuss its “grave concerns about key elements of Tri-State’s key generation products and services” directly with the 42 other co-ops that buy power from Tri-State.
At a presentation to Mountain Parks Electric on January 3, United Power New Business Director Jerry Marizza explained that United Power was not proposing to simply raise the 5% limit that Tri-State imposes on local renewable energy development to a higher level. Instead, the proposal for a partial requirements contract option would assure that Tri-State continues to provide a portion of United Power’s energy purchases, while allowing United Power to meet its electricity load growth by pursuing its own local renewable energy projects, or buying wholesale power from other providers.
United Power staff said the proposal would also give the co-op the ability to provide its major customers with lower rates and renewable energy options that aren’t possible with the current Tri-State contract. One example Marizza noted were commercial customers that now expect to be able to build larger on-site solar arrays to help power their operations:
“All this stuff is happening at the distribution level. Ikea - they will not build a facility unless they get to put a megawatt of solar on their roof. That’s just a fact, okay? If you want an Ikea, you’re going to have to deal with that fact. And you can’t come to them and say ‘I’d love to accommodate you, but Tri-State’s contract won’t allow me to.’ That’s not an answer, it really isn’t.”
The Ikea store in Centennial, Colorado has a 1.1 megawatt rooftop solar array.
Colorado Governor John Hickenlooper announced this week that John Gavan will serve as the next Commissioner of the Colorado Public Utilities Commission (PUC), beginning January 7, 2019. Gavan will replace PUC commissioner Wendy Moser, whose term ends next month, and join Commissioner Frances Koncilja and Chairman Jeffrey Ackerman, whose terms continue until January 2020 and January 2021, respectively.
"We appreciate Wendy’s service to the PUC," said Hickenlooper press secretary Jacque Montgomery in an email, "Mr. Gavan was a consensus choice of both the Governor and Governor-elect Polis. He is an engineer and brings experience in energy and telecommunications. We believe Mr. Gavan will be an excellent addition to the PUC."
The Colorado PUC regulates electric utilities in the state, and will likely play a significant role in efforts to shift the state toward renewable energy. Governor-elect Jared Polis campaigned on a goal of moving Colorado to 100% renewable energy by 2040 or sooner, and said after the election that goal will be among his top priorities. The Polis campaign website highlighted the importance of “Appointing Public Utilities Commissioners who support consumers and renewable energy” among the ways that "We can spur investment in new local renewable energy projects."
New report shows that renewable energy prices continue to decline, undercutting the costs of existing coal plants
Colorado voters elected Jared Polis to be the state’s next governor on Tuesday, joining several other states that also elected governors who campaigned on clean energy. Polis campaigned on a platform that included bringing Colorado to 100% renewable energy by 2040, and in an interview with the Denver Post yesterday, said that renewable energy would be among his top priorities:
Is there anything in particular you plan on prioritizing?
Certainly, saving families money on health care, expanding access to preschool and kindergarten, and taking the steps to move toward more renewable energy will be among our top priorities both through executive actions as well as working with the state legislature.
In a debate last month, Polis emphasized that moving toward renewable energy could benefit ratepayers, because of the declining prices for new renewable energy:
At the 2018 Colorado Rural Electric Association Energy Innovations Summit this week in Denver, electric utility industry officials discussed changes in energy technologies and utility business models, such as increasing customer choices and declining costs of distributed renewable energy. But while there was broad agreement about the opportunities provided by cheaper renewable energy, there were disagreements about the scope and pace of business model changes underway in the industry - and the implications of those changes for the hundreds of electric cooperative directors and staff attending the conference.
Steve Collier, Director of Smart Grid Strategies at Milsoft Utility Solutions, delivered a presentation titled “Revolutionary Change in the Electric Industry: Threats and Opportunities,” which focused on the implications for electric cooperatives of what he described as an “eroding monopoly.” Collier explained:
What choices do customers have other than buying from you, all that that they have ever bought? Do they have choices? Yeah they have choices. Primarily distributed energy resources. But we’re not just talking about rooftop solar, we’re talking about a whole variety of options that they have to reduce the amount of electricity that they buy from you.
More major companies expect 100% renewable energy options, and some are pushing for broader changes in power markets
At the Global Climate Action Summit last week, twenty-one major technology companies announced the Step Up Declaration, which aims to boost the impact of corporate sustainability efforts by leveraging the companies’ various avenues of influence. The declaration notes:
We look beyond our four walls to activate supply chains, influence political and regulatory mechanisms, push each other as peers, partners and competitors and enable and inspire our customers.
The companies supporting the Step Up Declaration play a growing role in the economy, and claim to represent over $750 billion in combined market capitalization: Akamai Technologies, Arm, Autodesk, Bloomberg, BT, Cisco Systems, Ericsson, HP, Hewlett Packard Enterprise, Lyft, Nokia, Salesforce, Supermicro, Symantec, Tech Mahindra, Uber, Vigilent, VMware, WeWork, Workday, and Zoox.
The largest technology companies have also made clear their preferences for renewable energy, and those are now the largest companies in the world:
The five largest publicly-traded companies in the world — Apple, Amazon, Google’s Alphabet, Microsoft and Facebook — all have corporate commitments to use 100 percent renewable energy and at least three of them have already hit those ambitious targets.
The technology sector remains the largest purchaser of renewable energy, but major companies in other sectors have also made 100% renewable energy commitments, including Coca-Cola, Nike, Anheuser-Busch, General Motors, and Walmart - a total of 144 companies so far. And the impacts of those corporate renewable energy commitments are growing quickly, according to a Bloomberg New Energy Finance report last month, which found that “corporations have already purchased 7.2GW of clean energy globally in 2018 through July, shattering the previous record of 5.4GW for the whole of 2017.”
Wind energy projects are increasing jobs, tax revenue, and lease payments to landowners in the Eastern Plains of Colorado - and in the process, attracting support from leaders of both major parties in the state.
State legislators and other officials joined Xcel Energy and wind turbine manufacturer Vestas this week to highlight the economic benefits of wind energy in eastern Colorado, with a tour of the 600 megawatt Rush Creek wind energy project. The wind energy project in Cheyenne, Elbert, Kit Carson and Lincoln counties is currently under construction, and is expected to come online in October 2018.
“Wind is a huge win-win for rural Colorado,” said Shawn Martini, Vice President of Advocacy for the Colorado Farm Bureau. “Rush Creek is just one project and we’re poised to see even bigger investments should Xcel Energy’s Colorado Energy Plan be approved by the Colorado Public Utilities Commission, which, for the growth and health of our communities, we hope they do.”
Xcel Energy’s Colorado Energy Plan would mean a major expansion of renewable energy in the state, including additional major wind energy projects in eastern Colorado. According to an analysis from the Leeds School of Business at the University of Colorado Boulder that was filed last week last with the Colorado Public Utilities Commission (PUC), the Colorado Energy Plan would result in net economic benefits in Colorado, including a net increase of 549 jobs.
The impacts of corporate renewable energy goals are increasing across three major sectors of Colorado’s economy: skiing, technology, and beer.
Last month I looked at how cities in Colorado are helping push utilities in the region to embrace renewable energy. Communities like Boulder, Aspen, and Pueblo have made 100% renewable energy commitments, and the utilities that serve them are responding with plans to invest in more wind and solar power – although progress is uneven across the various utilities and electric cooperatives throughout the state.
Along with municipalities, several companies with operations in Colorado have also made 100% renewable energy commitments, and those too are getting results, as utilities respond to these major customers with new programs and plans for more clean energy.
Two key trends are boosting the impact of these corporate renewable energy commitments. First, companies are increasingly focused on adding renewable energy near their operations, instead of purchasing renewable energy credits from distant projects. And second, much larger companies have recently made 100% renewable energy commitments, which is significantly increasing the scale of renewable energy needed to meet company goals - and somewhat altering the power dynamic between utilities and their customers.
Let’s look at how these trends are playing out in three industries in Colorado: skiing, technology, and beer.
The town of Breckenridge passed a resolution last week establishing a goal to power the community with 100% renewable electricity by 2035. Breckenridge joins other Colorado towns and cities that are pursuing 100% renewable energy, including Pueblo, Boulder, and Nederland. Aspen achieved its 100% renewable energy goal in 2015, while other towns and cities including Denver and Durango are also considering renewable energy goals.
The responses from the utilities that serve those Colorado towns and cities show that these 100% renewable energy goals are helping push the region toward a cleaner electricity grid, achieving a broader impact than sustainability goals that remain within the boundaries of a municipality. That’s consistent with a new report by global management consulting firm McKinsey & Company, which argues that cities should focus their sustainability efforts on four strategic areas for maximum impact. First among those four strategic areas is using their position as major electricity consumers to help decarbonize the electricity grid:
While cities may believe they have little influence over the grid mix, in fact, they often represent a major portion of any local electric utility’s customers, potentially giving them significant leverage to shape the emissions profile of the electricity consumed within their metropolitan area. Still, capturing this opportunity will not be easy, and cities cannot do it alone. Utilities and regulators must play a central role in ensuring the overall mix of renewables is appropriately balanced at a system level and that critical components such as energy storage are in place to ensure grid reliability. Nevertheless, cities have an essential role to play by setting clear decarbonization goals, aggregating demand for renewables, promoting energy efficiency, and shifting more urban energy consumption to electricity (especially in transportation and heating).
Lowering the emissions intensity of the electricity grid is an especially impactful way that municipalities in the Rocky Mountain region can advance their sustainability goals, because the region’s grid is more dependent on coal, and therefore more carbon intensive, than other parts of the US. But as these Colorado towns and cities seek to accelerate the transition to renewable energy, they face varying challenges in working with the different utilities and electric cooperatives that sell electricity in Colorado. Colorado towns and cities are served by two investor owned utilities, 29 municipal utilities, and 22 rural electric cooperatives, according to the Colorado Energy Office
Let’s look at four Colorado municipalities pursuing renewable energy goals, each with a different electricity provider: Breckenridge, Pueblo, Aspen, and Durango.
Colorado Public Utilities Commission asserts jurisdiction over Tri-State
More Colorado co-ops announce clean energy goals
Ski industry climate change efforts shift to electric utilities and their regulators
Public Utilities Commission rejects Tri-State motion to exclude Colorado Energy Office from exit charge case
Tri-State claims that co-ops "have intervened on Tri-State's behalf at the PUC” don’t add up
Colorado state legislators urge Public Utilities Commission to determine Tri-State exit charge
United Power says Tri-State policies are turning away large customers
Next PUC Commissioner John Gavan "consensus choice" of Governors Hickenlooper and Polis
Tri-State policy change discourages battery projects in rural Colorado and New Mexico
Colorado Public Utilities Commission orders Tri-State to "satisfy or answer" exit charge complaint from Delta Montrose Electric
United Power seeks solutions to "increasingly outmoded G&T business models"
Clean Energy Means Business Summit highlights renewable energy opportunities and challenges in rural Colorado
Governor-elect Jared Polis says moving Colorado toward more renewable energy will be a top priority
Electric cooperative officials discuss cheap renewable energy and an “eroding monopoly”
Delta Montrose Electric members vote for new financing options, supporting a potential buyout of Tri-State contract
Poudre Valley Electric requests Tri-State policy changes and fuel mix study
Holy Cross Energy plans to shift away from coal, aiming for 70% renewable energy
What do corporate renewable energy commitments mean for electric utilities?
Colorado Energy Plan approval will mean new renewable energy investments in rural Colorado
Report: Tri-State could save $600 million by shifting from coal to renewable energy
Delta Montrose Electric seeks new financing options to end contract with Tri-State
Wind energy jobs in rural Colorado attract bipartisan support
Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue
Poudre Valley Electric and Xcel Energy Colorado President win national awards from Smart Electric Power Alliance
Latest coal plant subsidy proposal could hit electricity bills in the West
Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks
Senator Heinrich highlights “frustrations in New Mexico” with Tri-State’s limits on local solar
Moody’s report shows Tri-State’s coal plants are more expensive than new renewable energy
Tri-State’s limits on local energy development are a growing problem for co-op members
Governor Hickenlooper discusses Tri-State at the Climate Leadership Conference
Bids for Xcel’s Colorado Energy Plan include a proposal for the world’s largest battery
New wind and solar power in Colorado is now cheaper than existing coal plants
Companies' 100% renewable energy goals are getting results in Colorado
What does cheap solar mean for electric cooperatives?
Colorado towns and cities are helping push utilities to embrace renewable energy
How are electric cooperatives navigating the transition from coal to cheap clean energy?
Blocked from building more solar projects, United Power shifts to community batteries
Economic reality sets in for Tri-State efforts to expand the Holcomb coal plant
Solar projects in the works in Grand and Jackson counties
Mountain Parks Electric grapples with solar