Colorado towns and cities are helping push utilities to embrace renewable energy

By Joe Smyth | [email protected] | @joesmyth

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.

Xcel Energy seeks a collaborative approach with Breckenridge 100% renewable energy goal
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“The Town of Breckenridge is thrilled to continue our efforts in sustainability by initiating a town-wide goal for renewable energy by 2035,” said Breckenridge Mayor Eric Mamula. “This has been something Breckenridge has been working towards and I’m happy to see it go into effect. Keeping our town clean for generations to come is important to our community, and I believe this resolution shows our commitment to all our sustainability efforts.”

The Breckenridge Town Council’s 100% Renewable Task Force says that meeting the goal could involve pursuing more local solar energy, small scale wind and hydro, energy efficiency improvements, and more. But the task force also notes that “full 100% implementation on a community-wide level will require the utility provider to change their portfolio of energy sources to renewable sources.”  The resolution states that Breckenridge is “committed to working in partnership with Xcel Energy towards this goal.”

Xcel Energy, which provides electricity to Breckenridge, is ready to help, according to a statement from Xcel representative Michelle Aguayo:

Recently, Xcel Energy in Colorado started a new community collaboration effort. Our plan is to create comprehensive, mutually beneficial partnerships that support the goals and initiatives of the cities we serve in a scalable manner. Xcel Energy is proud to be working with Breckenridge to collaboratively advance its renewable energy and carbon reduction goals. Xcel Energy believes in offering choice for our customers – ranging from our residential customers to our cities and towns as it relates to their energy use. We have been meeting regularly with the Town to better help position Breckenridge for success and look forward to an even stronger partnership. Xcel Energy values these innovative partnerships that aid in our ability to advance the goals of all the communities we serve.

Xcel Energy’s approach to municipal renewable energy goals may reflect some lessons learned from the utility’s experience with Boulder. Since 2010, Boulder has been seeking to form a municipal utility and an end to its contract with Xcel, as a way to increase the use of renewable energy and help meet the city’s climate goals. Boulder voters approved a measure this month to continue pursuing a municipal utility, despite ongoing legal challenges.

Denver is also considering a 100% renewable energy goal, which Xcel has said it would support.

“We understand there are cities that want to do this, and we are going to do everything we can to help them achieve their goals,” Xcel spokesman Mark Stutz said. “We are trying to work with any city that wants to go 100 percent ‘renewable’ or 100 percent ‘carbon-free.’ We believe we can get electricity at equal or less cost with renewables.”

In August 2017, Xcel Energy and several other parties filed a proposal with the Colorado Public Utilities Commission that would close two coal generating units, and shift a majority of the utility’s electricity generation in Colorado to renewable energy by 2026. The entities supporting the proposal include renewable energy advocates, the Colorado Energy Office, a major mining company, labor unions - and the city of Boulder.

“We have a responsibility to meet our customers’ energy needs. Our customers expect us to provide low-cost power and increase the use of cleaner energy. As the state’s largest utility, it is important to us that we also support rural areas in Colorado, and this proposal’s investment will accomplish this goal,” said Xcel Energy Colorado President David Eves. “The proposal could increase renewable energy to 55 percent by 2026, save customers money, and dramatically reduce carbon and other emissions.”

The Colorado Energy Plan could increase renewable energy to 55% of the power that Xcel Energy sells in the state

Pueblo aims to become the “renewable energy capital of Colorado,” with or without Black Hills

The city of Pueblo, Colorado passed a resolution in February 2017 that sets a goal to power the community with 100% renewable energy by 2035. City officials approach renewable energy as a way to help stabilize electricity rates, which are among the highest in the state. Pueblo city councilman Larry Atencio also hopes that Pueblo’s 100% renewable energy commitment could help attract more renewable energy development to Pueblo.

"We could be a renewable energy center. We would be known as the renewable energy capital of Colorado,” Atencio told the Pueblo Chieftain, "How about that for a vision?"

The city of Pueblo is working with Pueblo County and the Pueblo Economic Development Corporation in an effort to attract a solar factory. Pueblo already hosts the world’s largest wind turbine tower manufacturing facility.

Pueblo’s 100% renewable energy resolution identifies a new hydroelectric facility as one potential source for new renewable energy generation, and prioritizes energy efficiency, community solar, and other measures to ensure that progress is shared with low income residents. The resolution also notes:

The City's non-exclusive franchise agreement with Black Hills Energy does not permit the City to determine the sources of power generation used by the company. It does, however, expressly reserve the right of the City to generate its own power, purchase wholesale power, provide the company with information on the City’s resource needs, aggregate utility service, and cooperate in the evaluation of options to reduce the City’s costs for electric service, including renewable energy options

For its part, Black Hills Energy says it is seeking to add renewable energy to help power Pueblo and the other communities it serves. “Our commitment to renewable energy for southern Colorado continues with the Colorado PUC’s recent approval of our Electric Resource and Renewable Energy Standard Compliance Plans, allowing us the opportunity to add up to 60 MW of renewable energy,” said Christopher Burke, vice president of electric operations, Black Hills Energy.

As Pueblo city officials have emphasized, adding renewable energy generation could help keep electricity rates stable. Black Hills’ 2016 Electric Resource Plan estimates that “the addition of 60 MW of wind energy in 2019 would result in a net incremental savings of approximately $69.3 million over the 25 year 2016 ERP Planning Period.” Black Hills’ plan says that those savings would come from reduced spending on fossil fuels and operation and maintenance expenses at their existing gas plants, along with a reduced need to purchase power.

Still, Pueblo Councilman Naworecki notes that “the city won’t have any authority over its sources of power unless it creates its own utility.” And in September, the Pueblo city council unanimously passed a resolution to explore ending the city’s franchise with Black Hills in 2020, ten years ahead of schedule.

Colorado towns and cities can form their own municipal utilities under Article XX of the Colorado State Constitution, which provides a powerful leverage point in negotiations with utilities.

Aspen reached 100% renewable energy goal after negotiating with its wholesale energy provider
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The city of Aspen reached its goal to power the community with 100% renewable energy in 2015. Most of the city is served by a municipal utility, and this local control helped the city reach about three-quarters of its goal by 2014, through a combination of hydroelectric power and power purchase agreements.

But to reach 100% renewable energy, Aspen also had to negotiate with the wholesale energy supplier for its municipal utility, as a factsheet from the National Renewable Energy Lab explains:

Subsequent to the transition, city staff began negotiations with their wholesale energy supplier, the Municipal Energy Agency of Nebraska. Discussions focused on defining the specific energy products that could be provided, how the energy would be shaped and balanced with existing supplies, pricing structures and other details.

Aspen reached its 100% energy goal by negotiating with its wholesale energy provider

Durango eyes renewable energy goal, but must navigate Tri-State restrictions on its electric cooperative

Durango, Colorado must navigate a different utility landscape if it hopes to achieve ambitious renewable energy goals. The city is served by La Plata Electric Association, an electric cooperative that purchases power from Tri-State Generation and Transmission Association. Under the terms of its contract with Tri-State, La Plata can only generate 5% of the power it sells from local sources. As the mayor of Durango has noted, that restriction complicates the city’s efforts to boost renewable energy.

Last month, over 900 Durango residents and 100 businesses petitioned the Durango City Council to support “a just transition to 100% renewable energy,” the day before the city’s annual meeting with La Plata Electric Association. The Durango Herald reports:

Mayor Dick White, a longtime advocate for climate-friendly policies, voiced his personal support for the goals.

“I really want to see us have a strategy and a road map for how to get there,” he said.

He committed to starting the discussion with LPEA, but noted that the Tri-State Generation and Transmission board needs to shift toward supporting renewable energy. LPEA buys its power wholesale from Tri-State.

That shift may be beginning at Tri-State, and the utility says that “Renewable energy means a lot to us, our member systems and the communities we serve.” Next month, Tri-State will add 75 megawatts of new wind generation in southeastern Colorado, following the 25 megawatt Alta Luna solar array that Tri-State brought online in May.

Still, most of the power that Tri-State generates comes from coal, and it’s not yet clear how Tri-State will respond to efforts at some of the electric cooperatives it serves to more quickly shift to renewable energy. La Plata Electric Association and other electric cooperatives in Colorado like United Power have urged Tri-State to increase the amount of renewable energy they can generate locally. But in August, Tri-State rejected those calls and chose to keep the 5% limit on local generation.

That restriction is pushing electric cooperatives that want to boost local renewable energy generation to consider ending their contracts with Tri-State. Kit Carson ended its contract with Tri-State in 2016, and is now pursuing its own 100% renewable energy goal. This year Delta Montrose also began discussions with Tri-State “regarding the feasibility and costs of withdrawing from their membership.”  

Following the meeting between La Plata Electric Association and Durango city officials, La Plata CEO Mike Dreyspring presented a long term vision to the La Plata Electric board, outlining how the electric cooperative “must move to increase cost effective and diversified, price sensitive DG [distributed generation].” That vision also apparently included a discussion of “LPEA’s long term power supply contract with Tri-State” - but that topic was removed from the public presentation because it “will be evaluated by the LPEA Board of Directors in the coming months.”