Colorado

Colorado became the first U.S. state to create a renewable portfolio standard (RPS) by ballot initiative when voters approved Amendment 37 in November 2004. The original version of Colorado's RPS required utilities serving 40,000 or more customers to generate or purchase enough renewable energy to supply 10% of their retail electric sales. In March 2007, HB 1281 increased the RPS and extended a separate renewable-energy requirement to electric cooperatives, among other changes. HB 1001 of 2010 further expanded the RPS. Eligible renewable-energy resources include solar-electric energy, wind energy, geothermal-electric energy, biomass facilities that burn nontoxic plants, landfill gas, animal waste, hydropower, recycled energy,* and fuel cells using hydrogen derived from eligible renewables. The PUC has issued rules to implement the RPS. The rules were amended as required by HB 1001 in August 2010. The PUC's rules generally apply to investor-owned utilities (IOUs). Electric cooperatives and municipal utilities serving more than 40,000 customers are still bound to the separate requirement approved by the legislature.

Requirement for IOUs
Colorado’s RPS requires each IOU to provide specific percentages of renewable energy and/or recycled energy according to the following schedule:

• 3% of its retail electricity sales in Colorado for the year 2007;
• 5% of its retail electricity sales in Colorado for the years 2008-2010;
• 12% of its retail electricity sales in Colorado for the years 2011-2014;
• 20% of its retail electricity sales in Colorado for the years 2015-2019; and
• 30% of its retail electricity sales in Colorado for the year 2020 and for each following year.

Distributed Generation Carve-out (IOUs only)
Utilities must also have a certain percentage of their retail sales come from either wholesale distributed generation (DG) or retail DG**, regardless of technology type, according to the following schedule:

• 1% of its retail electricity sales in 2011 and 2012;
• 1.25% of its retail electricity sales in 2013 and 2014
• 1.75% of its retail electricity sales in 2015 and 2016;
• 2% of its retail electricity sales in 2017-2019; and
• 3% of its retail electricity sales in 2020 and each following year.

At least one-half of the DG requirement must be generated by retail DG systems located on-site at customers’ facilities. Beginning January 1, 2015, the Colorado Public Utility Commission (PUC) may reduce the DG requirement if a utility submits an application to them, and the PUC finds the requirement is no longer in the public interest. If the PUC finds that public interest requires a higher DG requirement, they are to report their findings to the General Assembly.

Requirement for Cooperatives and Municipal Utilities
Colorado's RPS also requires all electric cooperatives and each municipal utility serving more than 40,000 customers to provide specific percentages of renewable energy and/or recycled energy according to the following schedule:

• 1% of its retail electricity sales in Colorado for the years 2008-2010;
• 3% of its retail electricity sales in Colorado for the years 2011-2014;
• 6% of its retail electricity sales in Colorado for the years 2015-2019; and
• 10% of its retail electricity sales in Colorado for the year 2020 and each following year.

Credit Multipliers
The Colorado RPS includes credit multipliers for four types of projects. These multipliers cannot be combined. One project can only receive one multiplier.

1. Each kilowatt-hour (kWh) of eligible electricity generated in-state, other than retail DG, can receive 125% credit for RPS-compliance purposes.
2. Electricity generated at a “community-based project” -- a project not greater than 30 megawatts (MW) in capacity that is located in Colorado and owned by individual residents of a community or by an organization or cooperative that is controlled by individual residents, or by a local government entity or tribal council -- can receive 150% credit for RPS-compliance purposes.
3. Solar electricity located in the territory of a cooperative or municipal utility and generated by a facility that begins operation before July 1, 2015, can receive 300% credit for RPS-compliance purposes. (Solar electricity generated by a facility that begins operation on or after July 1, 2015, receives 100% credit.)
4. Projects up to 30 MW that are interconnected to electrical transmission or distribution lines owned by a cooperative or municipal utility, which are installed prior to December 31, 2014 can receive 200% credit for RPS-compliance purposes. With the exception of investor-owned utilities using this multiplier, it is only available for the first 100 MW of projects statewide.

Tradable renewable energy credits (RECs) may be used to satisfy the standard.

* "Recycled energy" is defined as "energy produced by a generation unit with a nameplate capacity of not more than 15 megawatts (MW) that converts the otherwise lost energy from the heat from exhaust stacks or pipes to electricity and that does not combust additional fossil fuel."

** “Retail Distributed Generation” is defined as a “resource that is located on the site of a customer’s facilities and is interconnected to the customer’s side of the meter”. Presumably, this would include all renewable energy systems that participate in net metering. “Wholesale distributed generation” is defined as a “resource in Colorado with a nameplate capacity rating of 30 MW or less and that does not qualify as retail distributed generation.” DG systems with a nameplate capacity of 1 MW or greater must be registered with a REC tracking system which will be selected by the PUC.