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![Page 1: Regulatory Priorities of the Colorado Public Utilities Commission Black Hills Corporation Analysts’ Meeting Remarks of Ron Binz, Chairman Colorado Public.](https://reader035.fdocuments.in/reader035/viewer/2022062407/56649d9d5503460f94a86afb/html5/thumbnails/1.jpg)
Regulatory Priorities of the Colorado Public Utilities Commission
Black Hills CorporationAnalysts’ Meeting
Remarks of Ron Binz, Chairman
Colorado Public Utilities Commission
October 1, 2009
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Outline of this presentation
• Brief introduction to the Colorado PUC• Our energy regulatory priorities
– Stress energy efficiency– Stress renewable energy development– Employ progressive resource planning– Support advanced generation development
o CCSo CAES
– Accelerate state and regional transmission development
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Caveat
• I am one of three equal commissioners• My positions are my own• I am confused by many things and have not made
up my mind on much at all• I don’t even agree with some of the things I say• Good advice: don’t believe everything you think
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PUC Structure: Commissioners
• Three Commissioners• Appointed by the Governor• Confirmed by majority vote of State Senate• Serve four-year teams – may be reappointed• No more than two Commissioners from one political party• Judicial functions and legislative functions
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The Commissioners
Matt Baker Ron Binz Jim Tarpey
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What Do We Regulate?
• Investor-owned electric utilities• Investor-owned natural gas utilities• Intrastate natural gas pipelines
-----------------------------------------------• Some telecommunications carriers & services• Passenger transportation• Railroad crossings• Investor-owned water utilities • Pipeline safety• Relay Service for the hearing impaired
60%15%
1%
10%
4%
10%
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Colorado Energy Salesby Type of Utility
Cooperative28%
Investor-Owned55%
Public17%
Types of Colorado Electric Utilities
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Our State Energy Priorities• Boost Energy Efficiency
– Customer: education– Utility: engagement– Regulatory: incentive regulation; rate structure changes
• Stress renewable resources– State Renewable Portfolio Standard – Healthy renewables industry– A commitment to addressing climate change– Progressive resource planning at Commission
o PSCo ERP decisiono Inquiry into Tri-State resource planning oversight
• Advanced technologies development– Research and demonstration for carbon sequestration– Concentrating solar field at PSCo’s Cameo coal-fired plant– CAES and other storage strategies– Smart grid test bed in Boulder, Colorado
• Transmission development– SB 100– Western Renewable Energy Zones participation
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The Challenges We Face
• Energy Supply
• Energy Efficiency
• Consumer Prices
• Climate Change
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Colorado’s Balanced Approach
• Coal producing state (#8 of 50 states)• Natural gas producing state (#7 of 50 states)• Substantial wind and solar resources• Moderate electric rates• Governor with a focus on the
“New Energy Economy”
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Electric Generation Fuels in Colorado1990-2008
Colorado Electric Generationby Fuel Source 1990-2008
Coal
Hydro
NG
Renewable
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Gig
awat
thou
rs
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How Colorado Generates Electricity (2007)
Coal 65%
Hydro 3%
NG 26%
Renewable 6%
1
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Colorado Approach to Electric Resource Planning
• “Least Cost Planning”
• Fuel Neutrality
• Utility models new portfolio
• Utility selects bid resources
• “Resource Planning”
• Clean Energy Preference
• Independent Evaluator
• Optional Post-bid Review
Old Rule New Rule
• New DSM emphasis
-- Resource Planning --
• Little energy efficiency
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PUC’s ERP Decision for XcelEnergy
Major Decision Items
• Affirmed commitment to competitive bidding for resources
• Approved closure of two coal plants
• Approved large solar projects (200 - 600 MW)
• Continued growth of wind
• Assumed future CO2 price in modeling ($20/ton + 7% growth)
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PUC’s ERP Decision for Black Hills
Major Decision Items
• Affirmed commitment to competitive bidding for resources
• Permitted Black Hills to own and construct half of new resources
• Modified competitive bidding process to eliminate “Phase II”
• Assumed future CO2 price in modeling ($20/ton + 7% growth)
• Appointed Independent Evaluator
• Result of bidding:200 MW contract to BH IPP for CTs and CCs
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The Challenges We Face
• Energy Supply
• Energy Efficiency
• Consumer Prices
• Climate Change
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Boosting Energy Efficiency
• Utility: Engagement
• Customer: Education
• Regulation: Make rate structure changes
• New Development: “Smart grid”
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Utility Engagement
• Energy Efficiency goals in legislation
• Recent Commission rules establishing: – Bonus mechanism– Expedited cost recovery
• Tie-in EE to utility resource planning
• Overall: utility should make efficiency a business
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Customer Education
Two 75-watt Compact Fluorescent Lights will reduce CO2 emissions by
One Metric Ton over their lifetime
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Energy Efficiency in Housing
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Colorado’s Energy Efficiency Ranking
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The Challenges We Face
• Energy Supply
• Energy Efficiency
• Consumer Prices
• Climate Change
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U.S. Residential Electric Rates
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Price Levels and VolatilityNG Delivered for Electric Generation
Colorado 7/05 to 12/08
0
2
4
6
8
10
12
$/M
MB
TU
4.9 to 1.0
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The Challenges We Face
• Energy Supply
• Energy Efficiency
• Consumer Prices
• Climate Change
![Page 27: Regulatory Priorities of the Colorado Public Utilities Commission Black Hills Corporation Analysts’ Meeting Remarks of Ron Binz, Chairman Colorado Public.](https://reader035.fdocuments.in/reader035/viewer/2022062407/56649d9d5503460f94a86afb/html5/thumbnails/27.jpg)
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• Reduce Colorado’s carbon emissions by 20% below 2005 levels by 2020
• Reduce Colorado’s carbon emissions by 80% below 2005 levels by 2050
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EPRI Prism Analysis (2008)
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American Solar Energy Society
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What about China, India?
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NREL Wind Resource Map
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Concentrating solar w/storage
Other baseload (coal w CCS; nuclear)
$
Concentrating Solar in Colorado
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San Luis Valley
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Solar Thermal Electric Density
• Use: 100 MW(ac)/mile2
• Colorado Peak Integrated Demand: 11GW
• Result: 110 mile2 required land area
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San Luis Valley
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But what if 11 GW of solar were spread around the state in 100 MW installations?
It might look like this...
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Integrated GasificationCombined Cycle Coal Plant
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Compressed Air Energy Storage (CAES)
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HIGH PLAINS EXPRESS
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Thanks for the invitation.
I look forward to your questions.