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Colorado Renewable Energy Forum
May 19, 2006
At the Colorado Farm Bureau Headquarters
Centennial, CO
Meeting Minutes
Attendance
Landon Gates, Colorado Farm Bureau
David Hiller, U.S. Senator Salazar
Tony Frank, Colorado Working Landscapes
Fred Hefley, Baca Green Energy
Kay Lynn Hefley, Colorado Farm Bureau
Doug Henston, Sun Source Industries
Leland Swenson, Rocky Mountain Farmers Union
John Stencel, Rocky Mountain Farmers Union
Danny Tinnes, Prairie Wind Energy
Ron Larson, American Solar Energy Society and Colorado Renewable Energy Society
John Covert, Colorado Working Landscapes
Jeff Coombe, Paradigm Biogas
Becky Brooks, Stealey II
Sean Logsdon, Invenergy
Rick Gilliam, Western Resource Advocates
Tri-State G&T Resource Plan
Rick Gilliam with Western Resource Advocates gave a presentation about a report he co-authored entitled, Tri-State Generation and Transmission Association’s Resource Plan: Analysis & Alternatives. The report examines Tri-State G&Ts plan to build three new conventional coal units and transmission line. Below are highlights from the presentation:
● The goal of the report was to open a dialogue about the three proposed coal units and other options to meet Tri-State’s future needs. The report is based on the limited information that was available to them.
● Load Growth. Tri-State is composed of 44-member rural electric associations with five making up most of the load growth from 2000 to 2005. Substantial industrial growth and suburban residential growth is occurring among the following REAs.
o Industrial growth: High Plains Power, Springer Electric and United Power.
o Suburban residential is occurring within three Colorado front range REAs: United Power, Mountain View, Poudre Valley
o Several member REAs, mainly on the Eastern Plains are experiencing shrinking sales including Highline, Midwest, Wheat Belt, Southeast, Y-W, Columbus, High West, Panhandle.
● Proposed Resources. Tri-State is proposing three 600 MW sub-critical pulverized coal units and transmission lines that will cost $5 billion. The cost would be financed with a “postage stamp” rate. In other words, all 44-member REAs would pay the same rate regardless of weather their load growth is increasing or declining.
● Rate Impacts. The reports estimates that wholesale rates will increase by 3.4 cents/KWh by 2011 (about a 70% increase). Statements by Tri-State estimate the rate impact to increase between 23% to 76%.
● Load Forecasts. WRA collected three different load forecasts extending to 2024 from Tri-State sources. Tri-State’s October 2005 Annual Progress Report contains a base case forecast of load growth from 2,500 to about 3,250 MW and a high case forecast of 2,500 MW to about 3,700 MW. A more recent forecast from Tri-State’s 2006 Annual Meeting indicates peak demand will grow to nearly 5,000 MW in 2024.
● The earliest a proposed coal unit would be built is 2012.
● Resource Needs. Using the 2005 Annual Progress Report forecast, Tri-State may not have enough capacity to meet peak demand in 2007 thru 20011 and then again from 2020 to 2024. The difference between demand and capacity in 2024 is less than 400 MW.
● Risk Factors. The reports examines several risk factors with building three new coal plants:
o Financial: effect on debt rating & coverage ratio; effect on revenue requirements
o Technology: new and cost effective technology may come along
o Environmental: Green house gases – carbon tax liability; control costs of other emissions
o Fuel Price & Deliverability: volatility of coal prices; deliverability issues for coal
● Alternative Opportunities.
o The report models a demand-side management program that could eliminate the need for new coal units. A surcharge of 1.1% and growing to 2.8% 2009 could result in 736 MW of peak demand savings.
o Renewable Resources could be developed to meet resource needs including wind, solar, biomass, geothermal, small hydro.
o Combined Heat & Power could be developed for industrial operations.
A discussion followed the presentation.
Rick explained that other utilities are factoring in the risk of a carbon tax liability. Xcel Energy places a cost of $9.50 per ton of carbon for Coal projects.
Interest was expressed to hold a meeting or conference call with other G&Ts to hear how they are developing resource plans.
It was suggested that county commissioners would be a good resource.
Tri-State has held meetings in Southeast Colorado to discuss the purchase of water rights for the coal unit planned for that region.
Legislative Update
HB 1322. David Hiller with US Senator Salazar’s office stated that HB 1322 is now being considered by the Governor. The bill would establish a Colorado Renewable Energy Authority involving collaboration between Colorado State University, School of Mines, Colorado University and NREL for research projects that will lead to economic development opportunities. The Authority would receive $2 million a year over three years from the severance tax. The bill includes $500,000 a year for three years to the Colorado Department of Agriculture value-added fund for energy projects and $135,000 a year for carbon sequestration studies at CSU, Mines, CU and NREL.
SB 138. Landon Gates with the Colorado Farm Bureau said a late amendment to the bill requires that the 10% ethanol standard does not apply if the price of ethanol exceeds the price of gas. This bill is being considered by the Governor.
HB 1325. This bill allows for the formation of a Transmission Task Force staffed by the PUC, but it will require money from outside donors. Financial contributions should go to the PUC. It has become law.
A resolution requesting that NREL be funded to previous, higher levels, passed.
HB 1275. This bill changes the valuation of new wind turbines for property tax purposes to a method based on production. It has become law.
HB 1281. This bill involves IGCC Coal Plants. This bill is being considered by the Governor.
SB 16 and SB 3 have been signed by the governor and become law. SB 16 requires use of biodiesel (B20) for all state owned vehicles. SB 3 concerns the use of biofuels in state buildings.
John Stencil with the Rocky Mountain Farmers Union hopes that we can place some attention and time to Net Metering before the 2007 legislative session. He would like to see a policy of true net metering for rural communities.
Lee Swenson with the Rocky Mountain Farmers Union suggested coordination and efforts directed at federal policy.
What’s New? Updates?
● The Northern Colorado Clean Energy Cluster was launched on May 18th in Fort Collins. More information and background about the Cluster can be viewed at http://www.brendlegroup.com/cleanenergy/.
● Shell energy has run a national advertisement in such magazines as the Economist and Time about the Colorado Green Wind Farm and the Emick Family. You can view the ad at www.shell.com/emick.
● Rocky Mountain Farmers Union is having youth leadership camps this summer for children in grades 2-12. The theme for this years camps’ is “Fueling the Future” and will include a tour of NREL. For more information go to www.rmfu.org/event or call 303-282-3550.
● The Solar 2006 Conference is in Denver from July 7-13 at the downtown Adam’s Mark Hotel. More information is available at www.solar2006.org.
● Al Gore’s film about Global Warming, An Inconvienent Truth, will open in select theaters May 24.
● The Wind Turbine near Springfield is showing a 44% capacity factor.
● Baca Green Energy will have 2 years of wind data this September and is interested in a larger scale project. They are also exploring using wind to power irrigation and creating hydrogen that can be stored.
The next CREF meeting is scheduled for Friday July 21, 9 a.m.