Colorado is leading the way toward a low-carbon future, with companies and lawmakers taking bold action to accelerate the clean energy economy across the state. However, there are those who are delaying the move to clean energy resources – and leaving significant economic and environmental benefits on the table.
As an investment professional based in Colorado, I have been closely following how the energy landscape is changing right here in the Centennial State, as well as across the nation.
Earlier this year, state legislators passed a suite of bills setting bold goals to reduce greenhouse gas emissions and transition the state to run on clean energy. Among them was a bill to give the Colorado Public Utility Commission authority to regulate the long-term energy planning process for Tri-State Generation & Transmission – similar to the process followed by the state’s investor-owned utilities like Xcel Energy and Black Hills Energy.
Tri-State is now required to submit an energy plan to the PUC that details its investment plans for meeting the energy needs of its customers.
Tri-State is a wholesale power provider that serves 18 rural electric co-ops in Colorado, including the La Plata Electric Association. Right now, the company is lagging when it comes to clean energy, in large part because Tri-State owns interests in six coal units that it has no plans to retire before 2030, and because it has been slow to make plans to invest in renewable energy in a meaningful way. This failure to lead puts rural Coloradans at risk of being stuck paying for heavy-emitting and increasingly expensive fossil fuel generation while the rest of the state takes advantage of clean, low-cost renewable energy.
Tri-State’s reluctance to move toward clean energy has led to discontent among some of its member co-ops, which have long-term contracts with the power provider that prevent them from making their own switch. As a result, these co-ops and their customers have seen their electricity rates rise while the rest of the region benefits from Colorado’s plentiful and cost-effective renewable energy resources like wind and solar. In fact, a recent analysis found that Tri-State’s electricity costs 50% more per kilowatt-hour than the average Western wholesale price of power.
The clean energy sector has undergone a significant transition in recent years thanks to massive improvements in technology and performance. Renewable energy is increasingly a cost-effective investment for meeting energy needs, even considering the impact of intermittency, as the costs of clean technologies (such as energy storage) are rapidly falling.
Many of Colorado’s major utilities have embraced this new reality: Xcel Energy announced last year that it will achieve 100% carbon-free energy by 2050 and the Platte River Power Authority set a goal to achieve the same by 2030. Tri-State has also recently taken steps that indicate it may be moving toward increasing clean energy investments, including a stakeholder process to provide input on its energy portfolio and retiring a coal-fired plant more than two years ahead of schedule.
Despite these small positive signs, Tri-State is resisting the legislation passed this year granting the PUC oversight authority over their planning. Tri-State has requested that the Federal Energy Regulatory Commission regulate its rates, trying to bypass Colorado officials. If FERC accepts Tri-State’s request, federal regulators – rather than Colorado regulators – would approve how much Tri-State charges its customers. This change would undermine the recently granted authority the Colorado PUC has over Tri-State’s energy planning, complicating efforts to push Tri-State toward a prosperous, clean energy future – and it could significantly impact energy costs for Tri-State customers.
The upcoming energy planning process is an opportunity for Tri-State to conduct a more thorough cost analysis of its existing energy investments and potential investments in clean energy resources such as renewable energy, energy efficiency and energy storage. These technologies are often more cost-effective than the investments Tri-State has chosen to date.
A robust energy plan – one reviewed and approved by the Colorado PUC – is necessary to help ensure that Tri-State will take appropriate advantage of the cost-saving benefits that clean energy resources could bring to rural Colorado electric co-ops and their customers.
Julie Gorte is senior vice president for sustainable investing, Impax Asset Management LLC and Pax World Funds, and a member of Ceres Investor Network on Climate Risk and Sustainability. She lives in Arvada.
