Colorado HB 07-1281: Doubling Colorado's Renewable Energy Portfolio Standard

In the nation’s first-ever statewide vote on renewable energy policy, Colorado’s voters passed Amendment 37 in November 2004 to create an RPS of 10% by 2015.

The benefits of renewable energy became apparent so quickly that just 28 months later, legislation —HB 07-1281— doubling the standard passed the Colorado legislature in early 2007 with strong bipartisan support. Promoting renewable energy (the “new energy economy”) was the centerpiece of Governor Bill Ritter’s 2006 gubernatorial campaign.

Specifically, HB 07-1281 expands the definitions of a “qualifying retail utility” to include all utilities, except municipally owned utilities (MOUs) serving less than 40,000 customers, and “eligible energy sources” to include recycled energy. The bill raises the standard for electricity generation from eligible energy sources for investor-owned utilities (IOUs) from:

• 3 to 5 percent for 2008 through 2010;

• 6 to 10 percent for 2011 through 2014;

• 10 to 15 percent for 2015 though 2019; and

• 10 to 20 percent for 2020 and after,

and establishes a new standard for electricity generation from eligible energy sources for rural electric cooperatives (RECs), and (MOUs) serving over 40,000 customers at:

• 1 percent for 2008 through 2010;

• 3 percent for 2011 through 2014;

• 6 percent for 2015 through 2019;

• 10 percent for 2020 and after.

With regard to standard compliance, the bill establishes bonuses for certain types of generation facilities. For all qualifying utilities, each kilowatt-hour of eligible electricity generated from a community-based project as defined in the bill will count as 1.5 kilowatt-hours. For RECs and MOUs, each kilowatt-hour generated from solar generation technologies that produce electricity before FY 2015-16 will count as 3 kilowatt-hours. However, utilities may take advantage of only one bonus for each kilowatt-hour of generated electricity.

For IOUs and MOUs, the maximum allowable retail rate impact from meeting the standard is raised from 1 to 2 percent of the total electric bill annually for each customer. The current opt-out provision for RECs is eliminated, and RECs are required to submit an annual report to the PUC on or before June 1 of each year. However, reports submitted by RECs are not subject to the same compliance report review process as those submitted by IOUs.

Finally, the bill allows utilities to develop and own as utility rate-based property up to 25 percent of total new eligible energy resources if these resources can be constructed at reasonable cost compared to the cost of similar eligible energy resources available on the market. If the utility shows that its proposal provides significant economic development, employment or energy security benefits, the utility is allowed to own between 25 and 50 percent of total new eligible energy resources.

View HB 07-1281 (PDF format) as signed into law by Governor Ritter on 27 March 2007.