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Colorado

Colorado

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewable Energy Standard   

Last DSIRE Review: 07/24/2014
Program Overview:
State: Colorado
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Recycled Energy, Coal Mine Methane (if the Commission determines it is a greenhouse gas neutral technology), Pyrolysis of Municipal Solid Waste (if the Commission determines it is a greenhouse gas neutral technology), Anaerobic Digestion, Fuel Cells using Renewable Fuels
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative, (Only Municipal Utilities Serving 40,000+ customers)
Standard:Investor-owned utilities: 30% by 2020
Electric cooperatives serving fewer than 100,000 meters: 10% by 2020
Electric cooperatives serving 100,000 or more meters: 20% by 2020
Municipal utilities serving more than 40,000 customers: 10% by 2020
Technology Minimum:IOUs: 3% of retail sales by 2020 must come from Distributed Generation (as defined in law), of which, half must be "retail distributed generation" serving on-site load
Cooperatives that provide service to 10,000 or more meters: 1% of retail sales by 2020 must come from Distributed Generation (as defined in law), of which, half must be "retail distributed generation" serving on-site load
Cooperatives that provide service to less than 10,000 meters: 0.75% of retail sales by 2020 must come from Distributed Generation (as defined in law), of which, half must be "retail distributed generation" serving on-site load.
Credit Trading:Yes (no third-party tracking system in place)
Web Site: http://www.dora.state.co.us/PUC/rulemaking/RenewableEnergyStandar...
Authority 1:
Date Enacted:
Date Effective:
CRS 40-2-124
11/02/2004 (subsequently amended)
12/01/2004
Authority 2:
Date Effective:
4 CCR 723-3-3650 et seq.
7/2/2006
Authority 3:
Date Enacted:
EO B 2013-005
06/05/2013
Authority 4:
Date Enacted:
EO B 2013-006
06/06/2013
Summary:

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 current RPS for 2020 is 30% for investor-owned utilities (IOUs), 20% for electric cooperatives serving 100,000 meters or more, and 10% for electric cooperatives serving less than 100,000 meters and municipal utilities serving more than 40,000 meters.

Eligible Technologies

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. S.B. 252 (2013) also allows coal mine methane and pyrolysis of municipal solid waste to qualify, but only if the Colorado Public Utilities Commission (PUC) determines they are greenhouse gas neutral technologies.

Requirements

Investor-Owned Utilities

Colorado’s RPS requires each IOU to provide specific percentages of renewable energy 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 each following year.

Electric 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 or recycled energy. The following schedule applies to municipal utilities serving more than 40,000 customers and cooperative utilities that provide service to fewer than 100,000 meters:

  • 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.

Cooperative utilities serving 100,000 or more meters are subject to a higher requirement of 20% by 2020. 

Generation and Transmission Cooperatives

In 2013 S.B. 252 added a separate RPS requirement for generation and transmission cooperatives. The legislation defines such organizations as providing wholesale electric service directly to Colorado electric associations that are its members. At least 20% of the energy it provides its Colorado members at wholesale must be generated from renewable energy in 2020 and each following year. For the purposes of this law, generation and transmission cooperatives may count the renewable energy generated or caused to be generated by their member utilities towards their requirement. 

Carve-Outs

IOUs 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 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.

Senate Bill 252 (2013) added a distributed generation carve-out for cooperative utilities:

  • For cooperative utilities that provide service to 10,000 or more meters, 1% of its retail electricity sales must come from distributed generation in 2020 and each following year.
  • For cooperative utilities that provide service to less than 10,000 meters, 0.75% of its retail electricity sales must come from distributed generation in 2020 and each following year.  

Credit Multipliers

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

  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 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.

Compliance

Renewable energy credits (RECs) may be used to satisfy the RPS standard. One REC is issued for each megawatt-hour (MWh) of renewable energy generated. A utility may buy, sell, and trade RECs at any time as long as it obtains and retires sufficient levels of RECs to comply with RPS requirements. RECs expire at the end of the fifth calendar year following the calendar year in which it was generated.

All renewable energy resources located in the region covered by the Western Electricity Coordinating Council (WECC) that generate RECs used for RPS compliance must register with the Western Renewable Energy Generation Information System (WREGIS) and record their RECs in WREGIS after August 11, 2010, with the exception of retail renewable distributed generation facilities less than 1 megawatt (MW).


*  "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 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.


 
Contact:
  Bill Dalton
Colorado Public Utilities Commission
1560 Broadway, Suite 250
Denver, CO 80202
Phone: (303) 894-2908
E-Mail: william.dalton@dora.state.co.us
Web Site: http://www.dora.state.co.us/PUC
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.