Review of 2008

5 January 2009

The year 2008 was productive for the renewable energy industry and advocates throughout the West, building upon significant gains made in 2007. Over 190 new megawatts of wind energy came online throughout Interwest’s six-state region (Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming) in 2008, including Utah’s first utility-scale wind project, bringing the total wind capacity to 2,042 MW region-wide. Solar projects added over 15 MW to the West’s power grid in 2008, while a 24 MW biomass plant using wood waste products opened in Arizona.

Vestas Wind underscored its commitment to the U.S. market by opening a major new factory in Colorado – and announcing plans to build three more factories in the state in the next 18 months. New projects announced in 2008 included the world’s largest concentrating solar facility in Arizona, at 280 megawatts, as well as Arizona’s first utility-scale wind project, at 63 MW.

The extreme volatility of fossil fuel prices in 2008 provided a reminder that the “fuel” for power generation from wind and solar energy is free, locally available and inexhaustible. The national economic downturn provided a reminder that renewable energy projects create important new jobs in rural areas, and new manufacturing jobs in cities and towns throughout the region.

The year was marked by regulatory work in several states throughout the West. In Colorado, this work included implementation activities at the Public Utilities Commission on transmission-expansion legislation and lengthy work on Xcel Energy’s trailblazing Colorado energy resource plan.  Xcel’s plan calls for at least 1,000 MW of new solar and wind acquisitions by 2015 and closure of older, inefficient, coal plants to meet carbon-reduction goals. Utah and Nevada mapped their states’ renewable resource areas with an eye toward transmission planning to these resources, while the Western Governors’ Association launched an ambitious region-wide process to identify and quantify the West’s renewable energy zones. Throughout the West, transmission planners looked at strengthening capacity, both for intrastate and interstate delivery, of electricity generated from the region’s wealth of renewable energy resources.

In state legislatures, Arizona, Colorado and Utah all passed tax-related legislation providing important long-term tax certainty for renewable energy projects, while Utah passed its first statewide renewable energy targets into law.

The West’s voters supported pro-renewables candidates and issues, ranging from federal offices to a local ballot measure in Sevier County, Utah, where voters strongly endorsed a zoning ordinance giving county residents the right to vote on whether to allow construction of a proposed new coal plant in the county.

Diverse stakeholder groups worked collaboratively in many venues throughout the West, focusing on issues from protection of wildlife and native plants to renewable energy integration issues. The Interwest Energy Alliance was pleased to play a role in many of these efforts, as we believe that new markets for renewable energy projects and transmission development can be accomplished most effectively through consensus-based approaches.

This summary of 2008 activities provides only a limited snapshot view of a few of the many, many activities that took place throughout Interwest’s six-state region of Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming in 2008. For more details on our work throughout the West in 2008, visit our Activities and Accomplishments page.  I invite you to contact me for more information on how your company or organization can play a role in shaping the markets for renewable energy in the West.

Craig Cox
Executive Director
Interwest Energy Alliance
cox@interwest.org
303-679-9331

Transmission

Transmission: The New Energy Economy requires a strong transmission infrastructure

Transmission was a top priority of the Interwest Energy Alliance throughout 2008. Interwest pursued transmission issues in a wide range of venues throughout the West, ranging from participation in regional transmission planning meetings to membership in state renewable energy zone task forces. Our activities ranged from membership in the Western Governors’ Association’s Energy Working Group, which produced a Wildlife Corridors Initiative report in June to intervention in Colorado SB 100 implementation activities of Xcel Energy. Some of our work in 2008 is detailed below.

Western governors support transmission for clean energy and wildlife initiatives

Western Governors’ AssociationThe West’s governors and premiers meet in Jackson Hole, WyomingThe Western Governors’ Association (WGA) held its annual meeting at the end of June in Jackson Hole, Wyoming. Attended by 11 western governors and premiers from four western Canadian provinces, the governors expressed support for aggressive expansion of regional transmission capacity, along with broad support for expanding the role of renewable energy and energy in meeting the challenges of a lower-carbon energy future.

At this meeting, the governors adopted the final report of the Wildlife Corridors Initiative, of which Interwest was a member of the WGA’s Energy Working Group. In addition, the governors established the Western Wildlife Habitat Council (WWHC), characterizing its work:

“[i]nitially, the WWHC shall function in a manner similar to other such WGA-established entities as the Forest Health Advisory Council, and the Western Regional Air Partnership, and eventually may become an independent, affiliated organization, such as the Western Interstate Energy Board, and the Western States Water Council.”

WGA wrap-up summary of 2008 annual meeting

WGA launches Western Renewable Energy Zones initiative

The Western Governors’ Association launched its Western Renewable Energy Zones initiative (WREZ) with a kickoff meeting in Salt Lake City in May. The goals of the WREZ initiative are to identify renewable energy zones throughout the Western interconnect, conduct analysis to determine the cost of renewables from those areas and model the transmission needed to access renewable zones. The project has five committees –Advisory, Technical Renewable, Zone Identification (of which Interwest’s southwestern representative Amanda Ormond is co-chair), Lands & Wildlife and Transmission modeling. This process includes a large number of stakeholders who will create information and recommendations for the Advisory committee.

High Plains Express feasibility study released

Xcel Energy (Public Service Company of Colorado) reported on 3 June that “the High Plains Express (HPX) Preliminary Feasibility Report has been completed and posted…[t]he report is the culmination of a yearlong study directed by the HPX participants to address the technical, economic and conceptual routing aspects of a major multi-state transmission project involving the states of Wyoming, Colorado, New Mexico and Arizona…steps are being taken to advance the HPX project to the next stage, which will involve more detailed feasibility studies and additional stakeholder outreach.

  • Interwest cosigns letter on High Plains Express resource mix

Interwest cosigned a joint letter with many of the region’s leading conservation organizations urging planners of the High Plains Express transmission project to focus solely on renewable resource loads on this proposed line. Addressed to the governors of the project’s four footprint states, the letter concludes with the exhortation:

“We urge you to chart a clear and steady course for the West that unites utilities, transmission and infrastructure authorities, renewable energy interests, conservation organizations and the public, and leads the region toward the development of transmission proposals that foster renewable energy development without expanding markets for high-emitting resources.”

SunZia gains new partners

On 2 June, SouthWestern Power Group (SWPG) announced an agreement with four partners to proceed with development of the SunZia Southwest Transmission Project. SunZia is a high-capacity transmission project planned between Arizona and New Mexico. Companies joining the SunZia project development team include Salt River Project, Tucson Electric Power, Energy Capital Partners and Shell WindEnergy Inc.

SWPG notes that “SunZia will provide new delivery paths to electricity markets for existing and developing energy resources, primarily renewable resources such as wind, solar and geothermal projects in both states. Through strategic interconnections, customers in Arizona, New Mexico, Nevada and California will have access to these new resources to help meet their local power needs.”

FERC approves experimental transmission pricing plan for Western Grid

On 18 September, the Federal Energy Regulatory Commission (FERC) approved plans by a group of Western transmission providers for a two-year experimental regional transmission pricing initiative intended to encourage more efficient use of the grid and reduce customer costs by expanding access to coordinated transmission service from multiple transmission providers at a single rate.

The proposal came from eight members of the WestConnect transmission group, six of which are FERC-jurisdictional: Arizona Public Service Company, El Paso Electric Company, Nevada Power Company/Sierra Pacific Power Company, Public Service Company of Colorado, Public Service Company of New Mexico and Tucson Electric Power Company. Under the proposal, participating transmission owners would offer customers the option of buying hourly non-firm, point-to-point transmission service across their transmission systems at a single rate. Taking coordinated service under the proposal would be an alternative to pancaked point-to-point transmission service now offered under each member’s Open Access Transmission Tariffs.

In compensation for services they provide under the proposal, each participating transmission company would be allocated a pro rata share of revenues based on the ratio of the ceiling rate of each transmission provider involved to the sum of those ceiling rates, provided that none of the transmission providers will collect more than their ceiling rates. All rates are those on the Open Access Same-time Information System (OASIS).

Arizona Biennial Transmission Assessment urged to focus more on renewables

The Interwest Energy Alliance submitted comments to the docket on Arizona’s Biennial Transmission Assessment advocating an understanding of the difference in transmission planning and cost recovery needed for renewable energy, the need for an effective resource planning process to help inform transmission planning, and the need to begin designing generation and transmission systems around energy rather than capacity resources. Interwest’s comments emphasized:

  • Creating collaborative opportunities for transmission and resource planners to share information to facilitate renewable energy generation.
  • Providing pre-approval of cost recovery for the planning of transmission lines for renewables.
  • Further refining renewable energy resource zones.
  • Identifying the highest priority transmission additions to meet near-term needs.
  • Evaluate the siting approval process to improve its effectiveness for renewable energy projects.
  • Conduct flow studies on constrained lines to or near renewable energy resource areas.

SWAT Transmission Studies to Support Renewables

Interwest’s southwestern representative Amanda Ormond participates in the Southwest Area Transmission (SWAT) Renewable Energy Work Group that is helping to determine the treatment of renewables in the SWAT planning process. She successfully advocated for SWAT to study the modeling of two ten-year scenarios: a 20% renewables capacity (~13.5% energy) scenario and 40% renewables.

Settlement agreement reached on reinvigoration of SB 100 transmission planning process

The Interwest Energy Alliance reached a settlement agreement in February with Xcel Energy and various other stakeholder parties that dramatically invigorated the SB 100 transmission development implementation process, which Interwest had attacked as being “wholly inadequate.”

This agreement, sets out a detailed timetable that Xcel will follow in conducting new (and more frequent) stakeholder-driven transmission study groups, culminating next March with the filing of new CPCN applications for transmission necessary for generation resources “reasonably likely to come online by 2015” in all four of its currently designated energy resource zones.

For years, Interwest has worked to address Colorado’s severe transmission deficiencies. Interwest participated in a state 2006 Transmission Task Force (one of whose recommendations included legislation similar to SB 100) and then worked closely with Xcel Energy and many other stakeholder parties in drafting SB 100 itself in the 2007 legislative session. SB 100, signed into law in March 2007, provides current cost recovery for investor-owned utility transmission investments to transmission-constrained “energy resource zones” throughout the state. These specific resource zones and transmission deficiencies are identified in biennial reports filed with the Colorado PUC, starting in October 2007.

New round of Colorado SB 100 transmission-expansion process about to resume at PUC

PSCo’s initial SB 100 map from November 2008 informational reportOn 25 November, Public Service Company of Colorado (“PSCo,” Xcel Energy) filed an SB 100 “informational report” with the Public Utilities Commission. This report fulfills terms of the seSB 100 Transmission Expansionttlement agreement signed in February which called upon the company to identify transmission constraints in every one of the company’s five “Energy Resource Zones.” In addition, in this report PSCo refers to the “Generation Development Areas” identified in the state “SB 91 Task Force”…another outcome from the settlement agreement, which called upon the utility to pay closer attention to areas of greatest renewable resource potential in its SB 100 transmission planning.

This chart below, adapted from page 14 of the company’s report, identifies each routing for which a certificate of public convenience and necessity may (but not necessarily will) be filed with the PUC:

Project Zone Served Priority (High, Med, Low)
Pawnee – Daniels Park 345kV 1 Med-1
Ault – Cherokee 230kV 1 Med-2
Missile Site Substation 2 High-2
Lamar – Front Range:

Lamar – Comanche 345kV
Lamar – Missile Site 345/500kV

3 High-3
Lamar – Vilas 230/345kV 3 Low
San Luis Valley – Comanche

San Luis Valley – Calumet 230kV
Calumet – Comanche 345kV

4, 5 High-1

PSCo notes that “These priorities are provided as a suggestion to the Commission as to how Public Service might order the staging and scheduling of CPCN applications. Again, Public Service is interested in obtaining the Commission’s views prior to the submission of CPCNs.”

Colorado PUC opens transmission investigatory docket

The Colorado Public Utilities Commission took an increased interest in transmission issues in 2008. The PUC opened a transmission investigatory docket, in which Interwest filed comments on 18 July calling for a “one-utility” statewide approach to transmission planning as well as control area consolidation or coordination.

Toward the end of 2008, the Colorado PUC began ramping up its efforts in the transmission investigatory docket, indicating its interest in pursuing a truly robust statewide transmission infrastructure capable of serving both native load and export markets alike. The PUC’s plans in this area for 2009 include a number of stakeholder workshops and dockets, and cooperation with other state commissions and infrastructure entities such as the Colorado Clean Energy Development Authority.

Colorado receives grant to expedite renewable energy onto transmission grid

Colorado Governor Bill Ritter announced on 10 September that the Governor’s Energy Office (GEO) has been selected to receive a $397,700 grant from the U.S. Department of Energy to advance renewable energy in Colorado. Dubbed the “Renewable Energy Development Infrastructure” task force (“REDI”), this task force will use the grant to develop technical, financial and policy frameworks to expedite the construction of an additional 1,000 megawatts of renewable resource capacity onto the Colorado electricity grid.

The objectives of the nine-month grant are to prepare a set of concrete policy recommendations that will:

  • Directly address major permitting, siting and environmental barriers to the integration of renewable energy development and transmission expansion;
  • Connect several gigawatts of renewable energy from the 10 Renewable Resource Generation Development Areas identified in a 2007 “mapping” report conducted for the Governor’s Office and state legislature;
  • Support both regulated and public utilities to expand the current level of planned transmission investments to the Generation Development Areas;
  • Be replicable in other states to substantially expand and create an aggregated, regional, renewable energy market.

Interwest’s Craig Cox, along with a number of other industry and utility leaders, have been named to the REDI advisory board. The final report is due to be issued in mid-2009.

Tri-State’s San Luis Valley transmission project offers potential for new large solar development

Tri-State Generation and Transmission Association is proposing a new transmission project in southern Colorado to build a double-circuit 230-kilovolt transmission line between electrical substations near the towns of Walsenburg and Mosca. Tri-State notes that this line will provide the power delivery infrastructure to increase the reliability and capacity of the existing transmission system and support proposed renewable energy development in the area. The San Luis Valley is noted for its tremendous solar resource base.

Tri-State is cooperating with Xcel Energy (Public Service of Colorado) in this project, representing an example of the kind of transmission planning coordination between the state’s major load-serving entities that Interwest has long advocated.

Tri-State queue reform process initiated

Tri-State Generation & Transmission Association, the Denver-based supplier of power to 44 member rural electric cooperatives in four states (Colorado, Nebraska, New Mexico and Wyoming) has begun a stakeholder process on queue reform. Tri-State is working to finalize LGIP interim procedures, and stakeholder meetings planned, beginning in late January or the first half of February 2009.

The Interwest Energy Alliance made joint comments on Tri-State’s initial queue reform proposals with the Colorado Independent Energy Association. This letter (dubbed “Comment Letter 1”) is posted on Tri-State’s OASIS site.

This will be an important issue in 2009, since Tri-State’s service territory contains some of the nation’s best renewable energy resource bases.

Nevada renewable transmission plan released in January

On 24 January, Governor Jim Gibbons released the final report of the Nevada Renewable Energy Transmission Access Advisory Committee (RETAAC). In this report, the committee identified areas in Nevada with high renewable energy development potential: six geothermal zones, four solar zones, 12 wind zones and four biomass zones.

The committee made three key recommendations in its report for developing transmission to these various renewable energy resources, saying that:

  1. The Governor’s Office [should] support the construction of transmission lines and collector systems to enable access for renewable energy development in each of the identified Renewable Energy Zones
  2. The Governor’s Office [should] support the construction of a transmission line to connect the state’s northern and southern electric grids of sufficient capacity to provide Nevada Power with their non solar renewable energy requirements from the abundant geothermal and wind resources in northern Nevada and provide Sierra Pacific Power access to the abundant solar resources in southern Nevada.
  3. Initiate Phase II of the RETAAC to define the environmental and physical feasibility issues, costs and potential financing mechanisms associated with the recommended transmission routes beginning in first quarter 2008 with a completion date of December 31, 2008.
  • Governor orders Phase II of Renewable Energy Transmission Access Advisory Committee
    On 12 June, Nevada Governor Jim Gibbons signed an executive order creating a second phase of his Renewable Energy Transmission Access Advisory Committee (RETAAC) to further the committee’s first efforts of identifying transmission corridors necessary for renewable energy development in Nevada. The committee is charged with determining power potential for renewable energy zones designated by the first phase, review environmental, land use and permitting constraints, identify potential construction corridors that could avoid these constraints and review potential revenue needs for construction, among other duties.
  • Nevada Military Airspace and Radar Interference Constraints Map.
    The U.S. Department of Defense’s (DOD) Regional Environmental Coordination Officer DeEllen Brasher notes that a map showing DOD’s Southwest Wind Work Group’s Red, Yellow, Green Strategy Map (a tool for land management agencies and wind developers to use when siting wind turbine projects) is incorporated into the RETAAC map, shown as Figure 3 in that map.

DOD’s Brasher also reports that a similar map for Arizona is in the process of being created, and adds that “these maps are only a tool to assist agencies and wind developers and we do not have the authority to approve or reject a project. We only advise whether there is impact to the military mission based on the latitude and longitude and locations for the wind or solar projects that are given.”

Wyoming-Colorado Intertie success underscores viability of wind-only transmission

The Wyoming-Colorado Intertie (WCI) Project announced on 26 August that its recent Open Season auction was successful, with a 70-percent subscription to the line (with the rest of the line unsubscribed). The WCI Project is a public/private development partnership involving the Wyoming Infrastructure Authority (WIA), Trans-Elect Development Company LLC (Trans-Elect), and the Western Area Power Administration (Western), with Trans-Elect leading the development effort.

In its press release, WCI reported that:

“As part of the Open Season process, the project sponsors had offered up to 850 megawatts of transmission capacity in a public auction. This has resulted in 585 megawatts of capacity purchase commitments from credit-worthy parties. GreenHunter Wind Company, LLC and Duke Energy Ohio, Inc, two wind developers with wind farms under development near Chugwater, Wyoming have secured capacity on the WCI project. The project sponsors are optimistic that the remaining 265 megawatts of capacity will be sold. The project sponsors expect to complete the siting, permitting, and construction of the line and begin operation by mid-2013.”

In a separate press release, the American Wind Energy Association’s Policy Director Rob Gramlich noted that:

“The successful open season auction by the Wyoming-Colorado Intertie Project is a significant proof of wind power’s growing status as a mainstream source of electricity in the western United States…With wind developers subscribing for nearly 70% of the transmission offered, this announcement is proof that transmission can be financed based largely on wind. This effort to pro-actively plan transmission to access low-cost wind resources with federal and state government cooperation is a model for other areas. Expanding transmission capacity is one of the major challenges facing America’s electric industry.”

  • Wyoming-Colorado Intertie making remaining capacity available
    In November, WCI announced that the intertie’s remaining 265 MW of unsold capacity would be made available on an application basis in conformity with the WCI Open Access Transmission Tariff that is posted on the WCI website.

Western Wind and Solar Integration Study examines higher levels of wind and solar penetration

The Western Wind and Solar Integration Study (WWSIS) is examining the operating impacts and mitigation options due to the variability and uncertainty of wind and solar power on the utility grids for several states in the west. This is the largest regional wind integration study undertaken to date, and is being coordinated by the U.S. Department of Energy (DOE) and DOE’s National Renewable Energy Laboratory.

WWSIS is working to model a baseline assessment for the study footprint without new renewables, along with scenarios modeling a high renewables scenario based on 20-percent wind/3-percent solar or 30-percent wind/5-percent solar penetration levels.

New Mexico PRC issues new interconnection standard rules

The New Mexico Public Regulation Commission (PRC) issued an order on 29 July on standards for interconnection by electric utilities and customer-owned renewable generation facilities. The PRC notes in a press release that:

“The order basically simplifies the application process that will allow utility customers to interconnect to local distribution systems like Public Service Company of New Mexico (PNM) with customer-owned photovoltaic, or other qualifying renewable resource, generating systems. Energy generated in excess of that consumed by the customer can be placed into the power grid and used by the utility to meet energy needs elsewhere. The customer is compensated by the utility for the extra energy produced by the customer.”

2008 General Election results in Interwest region favorable for clean energy

Most winners in federal and state races in the 2008 General Election on 4 November were supportive of clean-energy policies. From President-elect Barack Obama’s strong support for clean energy, to Sevier County, Utah, whose citizens endorsed a ballot measure calling for local review of coal plant permitting, voters backed clean energy throughout the West.

Western governors deliver energy policy letter to President-elect Obama

Obama Seizes Historic WinIn a 20 November letter delivered to President-elect Barack Obama on behalf of the Western Governors’ Association (WGA), Governors Jon Huntsman (R-Utah) and Brian Schweitzer (D-Montana) wrote:

“Western Governors are very concerned that during our nation’s deepening energy crisis, the United States lacks an effective long-term energy policy. As you prepare to take office, we urge you not to delay in exercising the leadership necessary to ensure swift adoption and implementation of an energy plan that will provide affordable and clean energy to sustain our economy, stimulate greater energy efficiency, strengthen our energy security and independence, and reduce greenhouse gas emissions.”

Huntsman and Schweitzer’s letter, written in their capacity as chair and vice-chair, respectively, of the WGA, went on to call for aggressive implementation of greenhouse gas mitigation goals through clean energy deployment.

Western utility executives call for examination of regional energy policies

CEOs from leading western utilities sent a open letter on 18 April in support of regional transmission policies. Representing a “broad coalition of utility leaders of public and private utilities throughout the West,” the letter was signed by executives of APS, Avista, Bonneville, CalISO, PacifiCorp, Pacific Gas & Electric, PNM, Puget Sound Energy, SMUD, Salt River Project, San Diego Gas & Electric, Sierra Pacific, Southern California Edison and Unisource.

The letter from these utility executives notes that many western states have RPS laws and climate policies, along with rapidly increasing load growth. These utility executives call for consideration of a number of issues in the western interconnection as planning proceeds for future energy needs, including:

  • Comprehensive regional cooperation and coordination in transmission planning;
  • Deployment of “bridge” resources, such as natural gas, to meet load until further advances are made in renewable resources;
  • Maintenance of the “output and operating flexibility of existing power sources” while utilities pursue increased renewable energy; and
  • Significant new investments in R&D of “low carbon generation resources and interactive grid technologies.

In a 19 May reply signed by Govs. Dave Freudenthal (D-Wyo.) and Jon Huntsman (R-Utah), the Western Governors’ Association expressed agreement with the utility executives in many of their points, and the governors outlined their ongoing work in these areas of mutual concern.

Legislation

Governor Napolitano signs property tax reduction extension into law

Arizona Governor Janet Napolitano, who soon leaves for a new post as Secretary of Homeland Security, signed legislation into law in July extending the state’s property tax reduction through 2040 and allows renewable energy equipment to be assessed for taxes at 20% versus the normal 100%. HB 2614, sponsored by Rep. Lucy Mason (R-Prescott), was one of the last measures to be passed in the 2008 legislature and was the only significant energy-related bill to be passed in Arizona this year.

Governor Ritter signs Colorado sales tax exemption legislation into law

Colorado Governor Bill Ritter signed legislation into law in May clarifying and strengthening the exemption of renewable energy equipment from state sales taxation. This legislation, HB 1368, was a top priority of Interwest in the 2008 Colorado legislature.

Background: In late 2006, in the waning days of the previous governor’s administration (Bill Owens), the Colorado Department of Revenue suddenly overturned a sales tax exemption for all renewable energy equipment that had been in effect since early 2001. Not only was the exemption administratively overturned, but to add insult to injuries, back payment penalties were assessed. Interwest successfully advanced legislation in 2007 to restore the exemption, and with the passage of HB 07-1279, also made the exemption permanent. However, it was subsequently interpreted very narrowly late in 2007 by the state Revenue Department, meaning that many components of renewable energy projects, such as supporting structures, were not exempted. This necessitated the introduction and passage of HB 1368 in 2008.

Colorado central solar bill signed into law

Colorado Governor Bill Ritter signed a utility-scale solar bill, HB 1164, into law in May. This new law allows the PUC to consider various non-utility benefits of utility-scale (2 MW and above) solar technologies and writes into law the legislative declaration (described in a 2007 PUC filing by Interwest) of Amendment 37, which outlines the non-utility benefits of renewable energy resources. HB 1164 also explicitly allows the PUC to consider the costs of future greenhouse gas mitigation when evaluating future utility resource acquisitions.

Though the PUC already has the authority that was written into HB 1164, the specific language in this bill clarifies statute. HB 1164 was sponsored by Rep. July Solano (D-Brighton) and Sen. Gail Schwartz (D-Snowmass), two of the legislature’s top proponents of renewable energy policies.

Colorado Legislature creates Committee on Job Creation and Economic Growth

On 24 November, Colorado Senate President Peter Groff and Speaker-designee Terrance Carroll announced the creation of a special Committee on Job Creation and Economic Growth, Comprised of ten Senators and Representatives from both political parties, the legislative leaders asked the committee to present its action plan to the full legislature after it convenes in January. The committee is tasked with crafting innovative legislative solutions to:

  • Strengthen Colorado’s small businesses and non-profits
  • Improve Colorado’s infrastructure
  • Expand Colorado’s “New Energy Economy”
  • Stimulate job growth in Colorado’s rural communities

Governor Huntsman signs Utah sales tax exemption extension into law

HB 359, an omnibus tax package, was successfully amended in the final days of the Utah legislature to extend sales tax exemptions for wind, waste heat, and biomass until 2019. Senator Curtis Bramble (R-Provo), included this exemption into another tax-related bill (HB 359). Attempts to extend the exemption to solar were not pursued, since inclusion of solar energy would have incurred a deal-killing fiscal note (since that would be a new exemption, and not an extension of an existing exemption).

Public Service of Colorado receives tremendous response to wind RFP

On 12 May, Public Service Company of Colorado (Xcel Energy) filed an initial report to the Colorado PUC on its “early wind” bid proposals. In this solicitation for 150 MW of wind, which closed on 11 April, Xcel reports it received 21 proposals from 19 suppliers totaling 2,785 MW, at prices ranging from about $50 to $110 per MWh, with the federal production tax credit in place.

PUC issues decision on landmark Colorado resource acquisition docket

In late 2007, Xcel Energy (Public Service Company of Colorado, PSCo) filed its landmark “Colorado Resource Plan” at the Colorado PUC. This was the nation’s first major utility resource acquisition plan to call for closure of older, less-efficient coal plants in order to meet carbon-reduction goals. In addition, the plan called for at least 850 megawatts of new wind (and other “intermittent” renewable resources) and 200 MW of new solar energy (with storage) deployment by the end of the 2015 resource acquisition period.

Following months of testimony, reply testimony and discovery by the many parties in this docket (07A-447E), hearings ran for three solid weeks in June and July 2008. Interwest fielded several witnesses, all of whom provided excellent testimony under cross examination from Xcel and other parties. Interwest’s witnesses were Rick Gilliam (SunEdison), Carl Hunt (former chief PUC economist), Brendan Kirby (wind integration expert recently retired from Oak Ridge National Laboratory) and Hank Price (Abengoa Solar).

Ron Lehr provided tremendous representation of Interwest’s case throughout the marathon proceedings, and noted that “the three PUC commissioners and most (but not all) of the parties in this docket are working in concert to see how we can achieve shared goals of increased renewables deployment and a lower-carbon energy future…These hearings are showing that Interwest’s key intervention issues are the issues holding back more aggressive deployment of renewables in Xcel Energy’s Colorado system (and, by extension, in other utilities in the western grid). These issues include a lack of integration research by PSCo and the longstanding issue of transmission constraints.”

The PUC commissioners issued their decision in this docket on 19 September, largely approving Xcel’s proposed resource acquisition plans. Among the key provisions in the PUC decision were:

  • Accepting Xcel Energy’s proposal to file an update to the plan in two years. This will allow mid-course adjustments to take into account any regulatory, technology or forecasting changes, and break the resource planning process into more manageable pieces, the Commission said.
  • Approving the company’s proposal to close two older, coal-fired power plants – one in Grand Junction and one in Denver. Extensive testimony on the health benefits and carbon reduction strategies support the closures, the PUC said.
  • Approving a minimum of 200 megawatts (MW) of new technology renewable energy sources with storage capability, such as concentrating solar power.
  • Approving an additional 850 MW of intermittent renewable energy resources.
  • Setting the rules on how the utility and independent power producers will compete in bidding to supply new resources.
  • Establishing modeling scenarios on how to solicit and compare various bids.

Importantly, the PUC rejected Xcel’s proposal to construct and own 40 to 60% of its new needed generation resources outside of a competitive procurement process, requiring instead that future resource needs be met through a competitive procurement process, which Xcel is permitted to also bid on, using an independent evaluator. The commission also found that bidding should be open to diverse proposals from all credit-worthy suppliers and that debt equivalency can not be used by the utility in reviewing bids.

The PUC notes that following a comment period, the PUC will hold an expedited proceeding (Phase II) to establish a preferred resource portfolio for the company. That decision is expected by mid-2009.

Carl Hunt, the Interwest Energy Alliance’s expert witness in Xcel Energy’s resource acquisition plan updated Interwest’s popular Pater-Binz study “backcasting” study as part of his testimony. Hunt reports that the 800 MW of wind proposed in Xcel Energy’s resource acquisition plan through 2015 would result in nearly $248 million in consumer benefits with wind priced at 6.1 cents/kWh. This justified Interwest’s position that Xcel should acquire all cost-effective wind and renewable energy bids (above its proposed 800 MW of wind and 450 MW of solar), due to the demonstrated consumer benefits of these stable-cost technologies.

Utah Renewable Energy Zone Task Force

 Utah Renewable Energy Zone Task ForceBy Executive Order in April, Utah Governor Jon Huntsman formed a task force to study Utah’s renewable energy zones. The goal of the Utah Renewable Energy Zone (UREZ) Task Force is to clearly identify and map Utah’s best renewable resource areas so that policymakers, utility planners and other can make more informed decisions on future project development and transmission. The task force issued its draft report on 6 November, focusing on the state’s wind, solar and geothermal resources.

Court tosses challenge to state’s Renewable Energy Standard

In September, the Arizona Supreme Court tossed a lawsuit challenging the Renewable Energy Standard and Tariff (REST). The suit was brought by the Goldwater Institute, a conservative think tank. In it, they alleged that the Arizona Corporation Commission (ACC) exceeded its authority, as a ratemaking body, when it approved the REST.   ACC candidates in November’s election who were vocally against the REST were defeated.

Governor convenes Solar Work Group

Through the Arizona Economic Research Organization (AERO), Governor Janet Napolitano convened a group of experts in 2008 to look at financial incentives for solar and market development potential. The group includes Amanda Ormond, as well as Bill Post, CEO of APS’ parent company, Commissioner Kris Mayes, Barry Broome, Executive Director of the Phoenix Economic Development Council, and several university representatives.

The AERO committee prepared a report, presented to Governor Napolitano in November. With the departure of Governor Napolitano to become President-elect Obama’s Secretary of Homeland Security, it is uncertain how the report will be used. It is expected, however, that the parties assembled for the work group will determine a method to work on implementation of some of the issues. The recommendations include key measures that will be pursued in 2009, such as a tax incentive for renewable energy manufacturers and identifying land for solar development.

Nevada adopts mandatory greenhouse gas reporting program

In November, the Nevada Division of Environmental Protection’s Bureau of Air Quality Planning announced:

“On November 12 the draft regulations for Nevada’s Mandatory Greenhouse Gas Reporting Program were formally adopted by the NV State Environmental Commission. The regulations now move to the NV Secretary of State’s office for codification.

Due to a concern that any proposed fee increases need to be part of a coordinated response to the State’s continuing budget crisis, Section 14 of the regulations (program fees) was deleted in a last minute change. The issue of program fees will be revisited at a later date.

NDEP continues to seek industry input on the draft GHG Emissions Mandatory Reporter Guidelines. We are committed to working closely with industry during our pilot reporting year to work through any reporting issues.”

Key PSC victory on cost recovery issue
—NRRM overturned in settlement agreement

In an intervention at the Wyoming Public Service Commission in the Rocky Mountain Power (“RMP,” PacifiCorp) Wyoming rate case, Interwest negotiated a settlement agreement with RMP in which the company withdrew its proposed New Renewable Resource Mechanism (NRRM), which would favor company-owned renewable projects versus those built by independent power providers.

Wyoming wind-wildlife maps

The Wyoming Governor’s Office, in coordination with state and federal agencies, has produced new maps showing environmental constraints for wind development in all portions of the state reported by the National Renewable Energy Laboratory to have Class 4 or better winds.

Arizona considering draft wildlife guidelines

Arizona is working to develop wind and wildlife guidelines. The Northern Arizona University’s Ecological Monitoring & Assessment (EMA) office, writes in a 20 November letter that:

“The EMA Program has been tasked by [NREL] to develop regional guidelines that promote scientifically sound, cost-effective methods for assessing and evaluating potential wind energy impacts on birds and bats within the region…the principal goal of the draft document is to develop regional guidelines that are broadly accepted, adaptable and site specific to locations throughout northern Arizona and the southern Colorado Plateau.”

Interwest coordinated industry comments on these draft guidelines, submitted to NAU on 19 December.

“Colorado Renewables and Conservation Collaborative” formed

Interwest joined a number of leading regional non-governmental wildlife, conservation and public lands groups in 2008 to forge mutual approaches to new project and transmission development and siting issues. Members of the new Colorado Renewables and Conservation Collaborative (“CRCC”) share many similar goals, including:

  • to provide timely and cost-effective means for developers to make siting decisions based on scientific knowledge
  • to clarify what we know about wildlife impacts scientifically and identify information gaps
  • to provide information and a process that streamlines site-by-site evaluations for developers
  • to support and diffuse dissent regarding wind development
  • to prevent the endangerment of species or loss of biodiversity
  • to prevent lawsuits and other obstacles to meeting wind development goals for Colorado

CRCC members will continue to bring industry together with leading NGOs in ongoing efforts to achieve consensus on new project development and transmission siting. For example, this new coalition submitted comments to on proposed Renewable Energy Standard rulemaking to the Colorado PUC in December.

Federal activities

Interwest submits joint Draft Programmatic EIS comments with AWEA and SEIA

On 14 February, Interwest submitted comments on the federal Draft Programmatic Environmental Impact Statement (PEIS) jointly with the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA).

These short comments emphasized the West’s wealth of renewable energy resources and emphasized the importance of responsible and pro-active transmission development to get these resources to markets. We also expressed support for comments by EEI urging the federal agencies to demonstrate how the proposed corridors fully connect, and ensuring that all federal segments of these overall paths are designated as part of this section 368 process rather than designating just some segments and leaving others undesignated.

Solar Draft PEIS scoping meetings held

Interwest took part in the Solar Energy Development Programmatic EIS (PEIS) scoping meeting process. We expressed support in June for the PEIS process, but urged BLM not to stop development in its tracks by maintaining a moratorium on new applications throughout the PEIS process.  Happily, BLM’s moratorium on new project development during the PEIS process was reversed in early July.

Events

Central Solar Power Forum a huge success

Almost 300 people packed the Hyatt in Phoenix on 10 January to learn about central station solar power technology.  The forum featured presentations on technology, infrastructure needs, planning considerations, regulations and the need for developing CSP in Arizona.  Interwest was a sponsor of the event, along with APS and several solar technology companies. Presentations from the event are posted on program page.  Press coverage included a story in the Arizona Republic and information on its writer’s blog.  The event was heavily attended by Arizona’s utilities and state and federal agencies that will have to permit the projects.

Senator Salazar’s energy summit held in Denver

Once again this year, Interwest was a cosponsor of Senator Ken Salazar’s third annual energy summit in Denver. This year’s summit on 28 March brought together over 400 players in the state’s energy and financial sectors, for some of whom renewable energy was a relatively new topic.  Featuring Energy Secretary Sam Bodman and executives from some of the state’s top players in the clean energy economy, such as Vestas, Abengoa and other companies that have recently established a new (or higher-level) presence in Colorado.  This summit served to provide a snapshot of the burgeoning activity in Colorado’s “new energy economy” and to highlight Senator Salazar’s important work in this arena.

Senator Salazar has been an important leader on energy issues in the United States Senate and Interwest wishes him well as he prepares to lead the Department of Interior in the Obama Administration.

Interwest conducts successful public briefing on central solar

Interwest conducted a successful briefing on the great potential offered by central solar power generation, with presentations by five leading companies in the central solar industry — Abengoa Solar, Ausra, BrightSource Energy, OptiSolar and SunEdison. Attracting more than 125 leaders from key stakeholder constituencies, including legislators and top state agencies, this briefing helped broaden awareness of the promise of utility-scale solar power for Colorado’s future power generation requirements.

  • View presenters’ slides from Interwest’s 5 August central solar briefing

Governor’s New Energy Economy Forum attracts big crowd

Colorado Gov. Bill Ritter’s second annual new energy economy forum attracted over 850 people to Denver’s convention center on 14 October. A highlight of this event was Ritter’s announcement of the first recipients of the “New Energy Communities Initiative” – 14 projects designed to “stimulate economic growth, create new jobs, enhance sustainability and lead to more livable communities all across Colorado.”

Colorado Republican legislators blast the “No Energy Economy”

The Republican Study Committee of Colorado, which brings together the state’s conservative Republican legislators, held a sparsely attended, Republicans-only, daylong hearing on 18 August entitled “New Energy Economy, or just No Energy Economy?”  The sponsors said this hearing was called to discuss “Colorado’s energy crisis and the political storm surrounding it.”

Senator Reid hosts National Clean Energy Summit

At least 1,000 people attended the National Clean Energy Summit in Las Vegas, Nevada on 18-19 August. Sponsored by Nevada Senator Harry Reid (D), this conference featured five keynote speakers —Bill Clinton, T. Boone Pickens, Bob Rubin, Jon Huntsman and Michael Bloomberg— of whom three were Republicans. All the speakers echoed the importance and urgency of developing new clean energy resources. Some of the stakeholder discussions during the event will certainly help inform future federal legislation.

New project ribbon-cuttings and announcements

APS announces 280 MW power purchase agreement with Abengoa Solar

Announced in February, this concentrating solar plant west of Phoenix, the Solana project will be one of the world’s largest, representing a one-billion-dollar investment in the state upon its completion in 2012. This project worked its way through the Arizona Corporation Commission review and approval process throughout 2008.

Arizona’s first wind project announced

In July, Iberdrola Renewables announced Arizona’s first utility-scale wind project. The 63 MW Dry Lake project in Navajo County, whose output Salt River Project will purchase, is expected to come online in late 2009.

Utah’s first utility-scale wind project dedicated

At an October ceremony, state officials and representatives from Wasatch Wind and the Edison Mission Group dedicated Utah’s first utility-scale wind plant, the 19 MW Spanish Fork project.

Ground broken on large Milford Wind project in Utah

First Wind began construction on its 203 MW Milford Wind project in Millard and Beaver Counties in southwestern Utah. Expected to be completed by the end of 2009, this project will supply the Southern California Public Power Authority (on behalf of the Los Angeles Department of Water and Power and the cities of Burbank and Pasadena) with clean power under a 20-year power purchase agreement.

Happy Jack wind project dedicated

In September, Duke Energy dedicated its new 30 MW Happy Jack wind project near Cheyenne, Wyoming. Cheyenne Light Fuel & Power is the customer under a 20-year power purchase agreement.

Vestas opens turbine blade factory in Windsor, announces three more plants in Colorado

Vestas Blades opened its first North American manufacturing facility in Windsor, Colo. on 5 March. This plant, which will employ up to 650 people, will produce 1,800 turbine blades per year.

In two separate August announcements, Colorado Gov. Bill Ritter announced on 15 August that Vestas will significantly expand its Colorado operations by building two new manufacturing plants in Brighton. One plant will produce wind turbine blades and another will produce nacelles. Together, these two new plants in Brighton represent a $290 million capital investment and will bring 1,350 new jobs to Colorado.

A week later, Gov. Ritter announced on 22 August that Vestas will build the world’s largest wind tower manufacturing plant in Pueblo, representing a $240-million capital investment and bringing 450-550 new jobs to southern Colorado.

All three new plants will come online in 2009 and 2010.

Ausra opens first U.S. solar thermal power factory

On 30 June, Ausra, the developer of utility-scale solar thermal power headquartered in Palo Alto, CA, opened the reflector production line of its first North American manufacturing and distribution center in Las Vegas. The 130,000-square-foot, highly automated manufacturing and distribution center will supply the reflectors, absorber tubes, and other key components of the company’s solar thermal power plants to the rapidly growing Southwestern solar power industry.