2018 Election, Energy, Environment, Exclusives, Featured, Governor's Race 2018, Public Utilities Commission

Walker Stapleton challenges Polis on 100 percent renewable energy mandate

Gubernatorial candidate Walker Stapleton sat down with Complete Colorado for an interview last week. Asked about his Democratic opponent Jared Polis’ planned mandate for 100 percent renewable energy in Colorado by 2040, Stapleton said, “As I’ve said many times during the course of this campaign I’m for all forms of energy, I’m for wind, I’m for solar, I’m for natural gas, and I’m for oil, but I’m not for subsidizing alternate forms of energy on the back of hard-working Coloradans.”

A recent report by Energy Ventures Analysis published by the Independence Institute* estimates that the cost of achieving Polis’ 100 percent renewable power generation scheme in Colorado could be as much as $44.8 billion.

Walker Stapleton

“The cost of an incremental increase in capacity to renewables gets passed on by companies like Xcel to the consumer,” said Stapleton. “So, you find out that what you thought you were paying for per kilowatt-hour for electricity, you’re actually paying more than that.”

In a July 26, 2018 quarterly earnings conference call with 9 investment analysts from companies like JPMorgan Securities and Deutsche Bank Securities, Benjamin G. S. Fowke, chairman of the board, president, and CEO of Xcel Energy said, “We continue to make great progress on our steel-for-fuel strategy.”

Fuels like coal and natural gas aren’t big profit-makers for Xcel, they are considered “pass through” costs. Xcel adjusts utility rates to make those costs essentially profit-neutral by passing them on to ratepayers.

But Xcel Energy is also guaranteed about a 9 percent return on capital investments, including new power plants, windmills, solar panels and transmission lines. This return on investment, authorized by the Colorado Public Utilities Commission, is profit over and above the profit on the costs of creating and delivering electricity to ratepayers.

This guaranteed return, even when profits for delivering energy to consumers are stagnant or falling due to reduced demand, makes building windmills and solar fields a more stable source of profits than the electricity they generate. Renewables have no fuel costs, thus “steel for fuel.”

Stapleton continued, “In my mind (Polis’ renewables plan) is going to hurt Coloradans that are struggling…middle-income Coloradans that are struggling to provide for their families, struggling to get ahead that are going to face the prospect of greater utility bills.”

Stapleton pointed out that energy experts aren’t convinced that 100 percent renewables is an achievable goal, an assessment that is supported by statements made at a public meeting introducing the three finalists vying to replace retired Colorado Springs Utilities (CSU) CEO Jerry Forte.

Eric Tharp, acting CEO for CSU said, “Somebody ask me the other day about the California legislation that says 100 percent by 2045 and I said that’s an aspirational goal. Today, that would be very, very expensive.”

“We’re doing a study in the next EIRP (Electrical Integrated Resource Plan) that looks at 100 percent renewables for Colorado Springs…what does it cost and how much do we need,” Tharp continued. “It will be likely be 5 or 6 times (greater) in terms of nameplate capacity because it doesn’t run 24/7.”

Aram Benyamin, general manager of the CSU Energy Supply Department said, “Technically we can arrive at that point down the road, but right now when somebody says, ‘I’m going to go 100 percent renewable’ they’re doing it on somebody else’s system.”

Benyamin is speaking to the fact that solar and wind, the two major players in renewables, do not operate 24/7 and their output can be highly variable. This means backup sources that can be switched on when demand exceeds the supply generated by renewables will always be required.

Load balancing, says Benyamin, requires input from other power generators to the grid to deal with peak loads and lack of output from variable sources like solar and wind. The “somebody else’s system” Benyamin refers to could be hundreds of miles away and be generated by coal, natural gas, nuclear, wind, solar or hydro, which cuts against a 100 percent renewable claim. Access to excess capacity depends on agreements among power companies about how, when and how much peak demand external supplies cost. In the energy market, just like any market, demand drives price, and peak demand is usually priced highest.

Mark Gabriel, Administrator and CEO of the federal Western Area Power Administration (WAPA) and also a candidate for CSU CEO, manages 56 federal hydropower plants that feed the western grid.

His hydro plants are reliable renewable power sources that other utilities can call upon to provide power when needed, as it would be when windmills aren’t turning and at night. “I feel like at WAPA we’re pretty darned renewable. We have 10,000 megawatts of nameplate capacity on the hydro stations,” Gabriel said.

But hydropower is both limited and not without its own environmental impacts. Building new dams and reservoirs these days is difficult thanks to the environmental challenges involved.

Tharp said, “Every source is challenged. Natural gas, they don’t like fracking. Nuclear, they don’t like long-term disposal. Coal, they don’t like the emissions. Hydro, it’s ruining rivers. Wind, it’s killing birds and producing infrasonic sound. Solar, it’s ugly.”

But humans have impacts on the environment, that’s inevitable, and supplying electricity is always going to affect it somehow.

“From a consumer point of view, you want to make sure that when you hit the light switch or open the fridge that it’s working, it’s not just working certain hours of the day,” Stapleton said.

Stapleton says that the way the Colorado Public Utilities Commission has been dealing with the electrical industry needs to be examined and that the next Governor will have to address it because the PUC is scheduled to sunset next year.

“What I would do instead is not subsidize or mandate alternate forms of energy,” said Stapleton. “I would let the market decide.”


*Complete Colorado is a project of the Independence Institute


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