Utility seeks alternative energy plan

Colorado Springs Utilities is looking for a way to live with a renewable energy plan it opposed but voters approved in November.

The city-owned utility and other larger power companies have been negotiating with sponsors of Amendment 37 to reshape parts of the law that aren't clear, that infringe on their powers or that they think would unnecessarily raise customers' rates, said Wayne Vanderschuere, a utility resource manager.

If a compromise can be reached, lawmakers this session would be asked to modify the amendment.

As passed by voters, the legislative initiative dictates that larger utilities in Colorado generate 10 percent of their electricity by 2015 through renewable energy, such as wind, small hydro plants, biomass and solar.

One of the most contentious points in the campaign was whether businesses would bear an unfair share of the cost of developing renewable energy. The measure set a cost cap of 50 cents a month on residential utility bills, but it was silent on what business and industrial users would have to pay.

Insiders say the utilities and Amendment 37 proponents have come to an agreement that businesses will pay a proportional amount equal to residential customers' costs if supply- ing renewable energy drives up a utility's rates.

Some sticking points are still being negotiated, but both sides say they are hopeful they can reach a compromise in the next week or two.

"Everything is moving forward, and there is a lot of cooperation happening at the legislative level," said Justin Dawe of Environment Colorado, one of the groups that pushed the amendment. "My personal perspective is that Colorado Springs Utilities is looking for a way to preserve home-rule powers for the utility, and that is totally respectable."

If that effort fails, though, Colorado Springs Utilities has not ruled out asking customers to opt out of the renewable energy standards altogether, which is allowed under the law.

Shortly after the election, Colorado Springs Mayor Lionel Rivera suggested that's a legitimate tactic, because the majority of voters in El Paso County voted against Amendment 37.

Still, no concrete action has been taken to schedule such an election, which could be expensive and which some utility officials privately say could have negative public relations consequences.

Surveys by the utility indicate that a majority of its customers support some level of renewable energy, although that support dwindles the more expensive that power becomes.

Dawe agreed that opting out of a plan approved by a majority of Colorado voters could create some publicity problems for the utility.

"It's interesting to note that CSU was created by a vote of the people when investor-owned utilities were not meeting the needs of customers," he said. "That's what happened when voters approved Amendment 37."

Shortly before the election, Colorado Springs Utilities finished a plan for how the utility would meet demand for electricity through 2024. In some crucial ways, that plan conflicts with what is required by the renewable energy plan.

The utility, which has adequate electricity supplies until the next decade, proposed a modest amount of renewable energy -- mostly wind and hydro -- and a more aggressive conservation program, or what is called demandside management. It also decided that any new large supply of electricity would likely come from cleaner-coal technology.

The new law pushes for a higher percentage of renewable energy, including expensive solar; doesn't give utilities credit for power savings through conservation programs; and allows only small hydro power, which excludes much of the hydro power generated by Colorado Springs Utilities.

Insiders say Colorado Springs Utilities is pushing for a reworked law that would:

Give it credit for the conservation programs it wants to initiate in the next few years.

Allow credit for the hydro power the utility generates.

Remove it and other municipal utilities from oversight by the Colorado Public Utilities Commission. Municipal utilities have been exempt from such oversight in the past, and they don't want to lose that independence.

If those changes are made, the utility could decide to create its own renewable energy plan, which the law allows.

Any such plan would have to provide about the same amount of renewables spelled out in the law, but it could preclude having to use expensive solar energy, and there would not be any penalties short of possible legal action for not meeting it.

Colorado Springs Utilities is scheduled to update the City Council in March on its efforts to carve out what it considers an acceptable renewable energy bill.

CONTACT THE WRITER: 636-0197 or mckeown@gazette.com

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