Peter Blake

Legislature not done with energy policy bag of tricks

You can’t relax yet. The imminent passage of the “stick it to the REAs” bill will not be the end of the Colorado legislature’s efforts to mess with the state’s energy policy this session.

Senate Bill 252, which the state Senate passed late Monday after a mini-filibuster by Republicans, would boost the amount of renewable energy sources that rural electric co-ops must use to 25 percent by the year 2020. The REAs are currently under a 10 percent mandate. The House is expected to follow suit shortly.

But just moments after that bill snuck through on an 18-17 vote, another bill — S.B. 272 — was introduced that would require “investor-owned utilities” (read Xcel and Black Hills) to spend 30 percent of their “demand side management” budgets on “renewable energy technologies that cannot be net metered.”

In other words, geothermal heat pumps and active solar systems that use liquids to collect and store heat. Unlike wind and photovoltaic solar power systems, they can’t be hooked up to your electric meter, meaning you can’t get credit for what you contribute to the grid.

But their use can reduce the amount of natural gas burned, and that is what the bill’s sponsors, Sen. Gail Schwartz, D-Snowmass Village, and Rep. Randy Fischer, D-Fort Collins, aim to do.

“Demand side management” (DSM) is a subsidy program you pay for on your monthly Xcel bill. It is supposed to cut the amount of power the utility must generate by reducing overall demand. Xcel uses DSM funds to help some customers pay for energy-efficient appliances such as CFL bulbs, dishwashers and refrigerators.

In short, everyone must pay in order to help a few ratepayers buy new appliances that they would probably have purchased anyway.

But S.B. 272 would be aimed at subsidizing much more expensive installations — and that gives Xcel pause. The bill is being pushed not by the utility but by — you guessed it — the trade associations representing manufacturers of heat pumps and solar thermal systems.

Rich Mignogna, a former renewable energy specialist with the Colorado PUC, has written about the future of heat pumps on his blog. He likes the idea of DSM programs investing in heat pumps, which cool your house in the summer and heat it in the winter. They’re the future, and the current crop of appliances DSM pays for are “unsophisticated.”

But retrofitting existing buildings is very expensive, and they work better on new structures, especially large ones, he conceded.

There are other elements of the bill Mignogna doesn’t like. First, the language of the bill implies that the new DSM program will soon be buried in your basic charge and not broken out. “If the money is embedded in the base rate, you’ll never see it and won’t know to ask any questions,” he said.icon_op_ed

The bill also says the new DSM money would go into the “development” of thermal energy technologies instead of their deployment. That sounds like the money could go to research instead of to customers.

Two Xcel executives, governmental affairs director Dan Pfeiffer and policy manager Peter Narog, said the utility is very much against the bill as written, but suggested it has already been revised prior to its first committee hearing.

That’s at 1:30 today (Thursday), by the way, in Senate Agriculture and Energy — less than 72 hours after introduction. It sounds like another one of those measures the sponsors want to get passed before the public finds out about it.

The 30 percent mandate is way too high for Xcel and it’s likely to be reduced if not eliminated. And since the technology is so expensive, said Narog and Pfeiffer, “it doesn’t fit into our current model of what’s cost effective.”

But what bothers the Xcel executives most is that the bill “requires all our customers to pay into a DSM fund which very few customers could take advantage of.” Heat pumps aren’t washing machines.

Xcel won’t take a position on the bill until it sees what comes out of committee. It’s likely to be neutral at best.

The purpose of the bill, as defined in the title, is to “create a pathway” for new technologies that “offset the consumption of natural gas.”

There’s a nice bit of irony in that. It was just three years ago that the natural gas lobby combined with the greens, Xcel and Gov. Bill Ritter to ram House Bill 10-1365 through the legislature in a matter of days. It required Xcel to shut down three coal plants or convert them to natural gas by 2017. The coal industry was not consulted during the drafting of the bill behind closed doors.

But the old alliance is over. Now the greens are going after their former natural gas allies because gas is carbon based.

This bill is also evidence that so-called “green” interests are just as openly commercial as coal and oil have been. Manufacturers of thermal solar products and heat pumps are pushing S.B. 272, just as wind and photovoltaic solar companies push anti-REA and other renewable energy measures.

Longtime Rocky Mountain News political columnist Peter Blake now writes Thursdays for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com

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