Colorado Legislature approves 20% renewable portfolio standard

Portland, Maine (Platts)--19Mar2007

The Colorado Senate Friday approved a bill that doubles the state's
renewable portfolio standard to 20% while providing incentives for utilities
to build new "green" generating resources.

House Bill 1281 passed on a 27-8 vote and was sent to Governor Bill
Ritter for his signature. Ritter, a Democrat, supports the bill.

The bill raises the RPS for investor-owned utilities to 5% by 2008, 10%
by 2011, 15% by 2015 and 20% by 2020. For the first time, cooperatives and
municipal utilities will be required to meet an RPS, which starts at 1% by
2008 and rises to 3% by 2011, 6% by 2015, and 10% by 2020. Colorado's current
10% by 2015 RPS was approved in 2004 in a ballot measure.

The bill allows utilities to develop and own projects representing up to
50% of their renewable supply needs. In those cases, the bill also exempts
utilities from the state's competitive bidding requirements.

The bill also allows utilities to earn an extra profit on renewable
projects. Utilities will be allowed to earn their approved return on equity
plus up to half of the project's net economic benefit. Project costs will be
recovered through project-specific rate clauses.

The bill raises the maximum retail rate impact of complying with the
standard to 2% for retail utilities other than cooperatives. It also prevents
utilities from opting out of compliance with the RPS. The bill contains
provisions that aim to encourage utilities to establish community energy funds
to develop projects for renewable energy, energy efficiency, conservation and
environmental improvement.