Green energy fans praise Xcel fee withdrawal

By Lucy McFadden
THE COLORADO STATESMAN

News of Xcel’s decision to withdraw its proposal to charge a small monthly fee to the users of solar panels came as a relief to Gov. Bill Ritter and other proponents of the renewable resource.

The proposed surcharge, which had been set for a Public Utilities Commission hearing originally slated for Wednesday, Aug. 5, would have increased rates by $1.90 a month for solar panel owners. The fee had been set to go into effect in May 2010 and was designed to offset the cost of access to transmission lines to serve as backup for solar panels. The hearing was canceled when Xcel withdrew the surcharge.

Ritter said in a written statement that the surcharge “would have marked a step backward for Colorado’s new energy economy and threatened jobs in the solar industry” by creating a disincentive for solar energy investments.

“The [environmental] advocacy community was aware that this was not the best way for the industry to move forward,” said Pam Kiely, legislative director of Environment Colorado, a 30-year-old environmental advocacy group.

“Xcel certainly knew where we stood on this issue, and I think that — between the communication from the administration, Colorado Solar Energy Industries Association, the public at large and the advocacy community — Xcel got the message.”

“There was a lot of confusion as to what we were proposing,” said Karen Hyde, vice president of rates and regulatory affairs at Xcel.

Hyde said the fee was designed to pay for installation of transmission lines.

“We were not seeking to recover the costs of backup energy generation, just the delivery part of the system,” she said. “There were issues around whether we were appropriately looking at the benefits for solar panel owners, which led us to the conclusion that the proposal was not well understood.”

Hyde said she anticipated that a working group consisting of advocates for customers and other interested parties will convene later this year to resolve the issue.

Cool Energy President and CEO Sam Weaver, a member of the environmental advocacy group Environmental Entrepreneurs (E2), had planned to testify against the rate increase at the PUC hearing.

Weaver is pleased that he won’t need to do that.

He said he is “glad they are proposing a collaborative process. If we could move toward decoupling, then it would move unmatched incentives between Xcel and the customer. Decoupling is the critical structure to align the utilities and customers.”

Decoupling means separating Xcel’s profit margin from its sales volume.

“The action by Xcel of putting forth the penalty charge has a lot of state legislators talking about what bills to put in play in the next session,” Weaver said.

In addition to decoupling, Weaver said he will push for an emissions performance standard to require that “any new energy generation brought online to supply power in the state has to have carbon dioxide emissions per unit energy equivalent to a natural gas or better.”

Weaver said the new standard would make it necessary for coal-fired power plants to reduce emissions.

Some environmentalists speculate that Xcel was using the fee proposal to divert attention from the new 750-megawatt unit at the Comanche coal plant near Pueblo scheduled to fire up in a few months.

Kiely disagreed, saying, “I think Xcel is legitimately wanting to discuss this and work together with the customers, administration and advocacy groups. I don’t think they were playing politics.”

Weaver is an active member of E2, a national, nonpartisan group that lobbies lawmakers to advocate environmental policies.

Andrew Currie, chapter leader and co-founder of the E2 Rocky Mountains, describes the organization as the “independent business voice for the environment.”

Currie said the 65 dues-paying members of the Rocky Mountain chapter are prominent Colorado businesspeople in such industries as financial services, venture capital investment, angel investments, real estate, software, Internet, consulting, publishing and clean technology. The members represent 32 companies that employ about 1,000 Coloradans.

E2, founded in 2000 in California, also has chapters in Massachusetts and New York. E2 Rocky Mountains, founded in 2008, is the newest chapter.

E2 actively supported House Bill 1126, the Encourage Solar Thermal Installations bill, sponsored by Sen. Brandon Shaffer, D-Longmont, and Rep. Dickey Lee Hullinghorst, D-Boulder, in 2009. The new law allows the same incentives for solar thermal installations as those for solar electric installations. It also exempts owners from state sales and use tax on solar thermal installations.

In April, E2 sent a letter signed by 31 members to state representatives asking for support of the legislation. The letter was then sent to all Colorado senators. Members also met with Ritter and state lawmakers.

Carrie Curtis, program director for the Colorado Environmental Coalition, said she thinks E2’s work was pivotal in the passage of HB 1126.

“E2 had a very important role among the number of advocacy groups involved. I think having a louder business voice on clean energy issues makes them more likely to pass than traditional environment groups,” Curtis said.

In April, E2 Rocky Mountains sent two of its Colorado members to D.C. to advocate the Waxman-Markey bill, which mandates that greenhouse emissions be reduced by 17 percent by 2020.

One of these members was Joel Serface. Serface is also an entrepreneur-in-residence with a California-based venture capitalist firm, Kleiner Perkins Caufield & Byers. He is working to encourage the Department of Energy to invest in Golden’s National Renewable Energy Lab.

Tim Connor, partner of Boulder-based Sequel Venture Partners, which provides venture funding to clean technology-based businesses, joined Serface on the trip to support the Waxman-Markey bill.

The two represented the Rocky Mountains E2 group for two days filled with about 40 meetings. They met with several senators and congresspeople and their staff to express the E2 message.

That message, said Connor, is that “the key provisions of the bill — the carbon cap-and-trade as well as renewable energy standard position — will help drive investment into the clean tech sector, which will help drive economic and job growth in the sector.

“Before investment dollars go into the sector, there needs to be economic certainty in the sector.”

Connor lauded Colorado for its abundance of renewable resources and its potential to become a major industry player for renewable energy and clean technology. He said, after visiting D.C., he realized that many congresspeople personally support investment in Colorado’s renewable resources, but “they worry that the carbon cap-and-trade won’t be received well in their districts. They see it as a tax.”

E2’s message, said Connor, was that jobs would be created if lawmakers focus on investment in renewable energy.

Serface added, “E2 was unique in those D.C. meetings because we are individual businesspeople who
consider what is good for the environment, economy, and growth in economy — and we’ve been doing it for a decade.”

Part of E2’s strategy is hosting “EcoSalons,” such as the February event that brought Robert F. Kennedy Jr., senior attorney at National Resource Defense Council; Ned Farquhar, senior policy advocate in NRDC ‘s energy program, and Ritter to the home of a Denver member. In his remarks, Kennedy said free markets and environmentalism both are crucial for economic prosperity, and he advocated Ritter’s new energy economy. The EcoSalon guest list included state Sens. Joyce Foster, of Denver, and Gail Schwartz, of Aspen; Jim Martin, executive director of the Colorado Department of Public Health and Environment; and staff members representing U.S. Reps. Diana DeGette, Betsy Markey and Ed Perlmutter; U.S. Sen. Michael Bennet, and Denver Mayor John Hickenlooper — all of whom are Democrats.

“I was very impressed with E2’s appreciation for different technologies and clean water,” Schwartz said. “I was able to engage Kennedy Junior and E2 folks on supporting my bill, Senate Bill 75.”

SB 75, also sponsored by Rep. Don Marostica, R-Loveland, opens the door for cleaner transportation options, allowing drivers to operate low-speed electric vehicles on more roads.

E2 works with the NRDC, an environmental action organization that keeps E2’s business membership current on environmental legislation.

In August 2008, E2 hosted Jason Grumet, then executive director of the National Commission on Energy Policy and adviser to presidential candidate Barack Obama.

The program for E2’s next EcoSalon will be posted on Web site, www.e2.org, as soon as it is finalized.

E2 was active in Colorado before it set up a formal chapter. In 2004, national members met with Colorado lawmakers and issued media statements in active support of Amendment 37, which revised the renewable portfolio standard to require that 10 percent of energy come from renewable sources.

There is currently no national renewable energy standard. Colorado’s renewable energy standard as of 2007 mandates that 20 percent of the state’s electricity come from renewable energy by 2020.

“Clean energy legislation in Congress has the potential to create many more clean energy jobs in Colorado, especially if the legislation contains a stronger national renewable energy standard,” said Currie.
“While the American Clean Energy and Security Act was a good start, we need a stronger renewable energy standard in the U.S. Senate climate bill currently being developed.”

The Senate Environment and Public Works Committee is working on a climate bill that is expected to pass this year.

“E2 is at the intersection of business and the environment,” said Currie. “We are not a trade group. We are businesspeople giving others the information they need to take some kind of action on issues they care about.”

E2 is co-sponsoring a clean energy business town hall meeting at 1 p.m. Sept. 1 in the Cherokee Ballroom of the Lory Student Center on the Colorado State University campus in Fort Collins.

A panel of speakers representing co-sponsoring organizations — E2, Abound Solar, Vestas, the Colorado Solar Energy Industry Association and others — will discuss the benefits a strong national renewable energy standard will bring to Colorado’s new energy economy.

The sponsors have invited U.S. Rep. Betsy Markey, D-Fort Collins, U.S. Sens. Mark Udall and Sen. Michael Bennet to join them.

For more information, call 303-333-7342 or go to www.e2.org.

Lucy@coloradostatesman.com