Transcript Slide 1
Regulatory Priorities of the Colorado Public Utilities Commission Black Hills Corporation Analysts’ Meeting Remarks of Ron Binz, Chairman Colorado Public Utilities Commission October 1, 2009 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 CCS o CAES – Accelerate state and regional transmission development 1 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 2 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 3 The Commissioners Matt Baker Ron Binz 4 Jim Tarpey What Do We Regulate? • Investor-owned electric utilities 60% • Investor-owned natural gas utilities 15% • Intrastate natural gas pipelines 1% ----------------------------------------------• Some telecommunications carriers & services 10% • Passenger transportation 10% • Railroad crossings • Investor-owned water utilities 4% • Pipeline safety • Relay Service for the hearing impaired 5 Types of Colorado Electric Utilities Colorado Energy Sales by Type of Utility Public 17% Investor-Owned 55% Cooperative 28% 6 7 Our State Energy Priorities • Boost Energy Efficiency • Stress renewable resources – Customer: education – Utility: engagement – Regulatory: incentive regulation; rate structure changes – – – – State Renewable Portfolio Standard Healthy renewables industry A commitment to addressing climate change Progressive resource planning at Commission o PSCo ERP decision o Inquiry into Tri-State resource planning oversight • Advanced technologies development • Transmission 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 – SB 100 – Western Renewable Energy Zones participation 8 The Challenges We Face • Energy Supply • Energy Efficiency • Consumer Prices • Climate Change 9 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” 10 Electric Generation Fuels in Colorado 1990-2008 Colorado Electric Generation by Fuel Source 1990-2008 70,000 60,000 Renewable Gigawatthours 50,000 NG 40,000 Hydro 30,000 20,000 Coal 10,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 11 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 How Colorado Generates Electricity (2007) Renewable 6% NG 26% Hydro 3% Coal 65% 1 12 Colorado Approach to Electric Resource Planning -- Resource Planning -New Rule Old Rule • “Least Cost Planning” • “Resource Planning” • Fuel Neutrality • Clean Energy Preference • Utility models new portfolio • Independent Evaluator • Utility selects bid resources • Optional Post-bid Review • Little energy efficiency • New DSM emphasis 13 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) 14 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 15 The Challenges We Face • Energy Supply • Energy Efficiency • Consumer Prices • Climate Change 16 Boosting Energy Efficiency • Utility: Engagement • Customer: Education • Regulation: Make rate structure changes • New Development: “Smart grid” 17 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 18 Customer Education Two 75-watt Compact Fluorescent Lights will reduce CO2 emissions by One Metric Ton over their lifetime 19 Energy Efficiency in Housing 20 Colorado’s Energy Efficiency Ranking 21 The Challenges We Face • Energy Supply • Energy Efficiency • Consumer Prices • Climate Change 22 U.S. Residential Electric Rates 23 NG Delivered for Electric Generation Colorado 7/05 to 12/08 Price Levels and Volatility 12 10 6 4 2 4.9 to 1.0 24 No v Ju l Se p Ja n M ar M ay No v Ju l Se p Ja n M ar M ay No v Ju l Se p Se p No v Ja n M ar M ay 5 0 Ju l0 $/MMBTU 8 The Challenges We Face • Energy Supply • Energy Efficiency • Consumer Prices • Climate Change 25 • Reduce Colorado’s carbon emissions by 20% below 2005 levels by 2020 • Reduce Colorado’s carbon emissions by 80% below 2005 levels by 2050 26 27 28 29 EPRI Prism Analysis (2008) 30 American Solar Energy Society 31 What about China, India? 32 33 NREL Wind Resource Map 34 Concentrating Solar in Colorado Concentrating solar w/storage $ Other baseload (coal w CCS; nuclear) 35 San Luis Valley 36 Solar Thermal Electric Density • Use: 100 MW(ac)/mile2 • Colorado Peak Integrated Demand: 11GW • Result: 110 mile2 required land area 37 San Luis Valley 38 But what if 11 GW of solar were spread around the state in 100 MW installations? It might look like this... 39 40 Integrated Gasification Combined Cycle Coal Plant 41 Compressed Air Energy Storage (CAES) 42 43 Wyoming Generation WYOMING Energy Zones Dave Johnston High Plains Express Tot 3 Expansion Project LRS Pawnee/ Story COLORADO Midway EPTP Limon Comanche Lamar Holcomb ARIZONA NNMI Gladstone NEW Albuquerque MEXICO Socorro Phoenix Tucson SunZia 44 HIGH PLAINS EXPRESS Thanks for the invitation. I look forward to your questions. 45