Legislation that’s designed to expand the use of renewable energy in Colorado by steering utilities to join regional transmission networks could also help if a big freeze or other extreme weather strains the state’s energy supply.
Sen. Chris Hansen said the bill he and Sen. Don Coram are sponsoring has been in the works for a couple of years. But consideration of Senate Bill 21-072 follows frigid weather in February that created havoc from Texas to the Midwest, forcing utilities to pay exorbitant prices for in-demand natural gas.
Colorado customers face rate increases because regulated utilities like Xcel Energy and Black Hills Energy can seek approval to pass along the costs. The Colorado Public Utilities Commission is investigating how the companies prepared for the freezing weather.
“The situation in Texas highlighted the fragility of having an isolated grid. In that sense, it helped focus people on the potential downside of not addressing our transmission system,” said Hansen, a Denver Democrat.
Massive outages that left millions of Texans without heat and electricity resulted from a number of factors, including a lack of winter-proofing of equipment in an area where single-digit temperatures are rare. The Texas electric grid is self-contained, making it more difficult to pull energy from other places.
Colorado is different from Texas in many respects. Colorado is more prepared for cold weather and has a much different regulatory system. However, Hansen said Colorado’s electric grid has similar vulnerabilities.
“Colorado is relatively islanded in the Western power grid,” Hansen said. “We basically have 38 island grids in the Western U.S. It’s massively inefficient. If we were to combine those over time, you would get tremendous upside for customers because you’re moving the lowest cost power to where it’s needed.”
The bill by Hansen and Coram, a Republican from Montrose, would require regulated utilities to join regional transmission organizations, or RTOs, by 2030. Regional networks would connect Colorado companies to multi-state grids and allow the instantaneous flow of electricity to where it’s needed.
The bill would also create the Colorado Electric Transmission Authority to identify routes for transmission lines, plan and oversee construction of power lines. To get started, the authority would take out a loan and then finance its operations from some of the proceeds of projects.
“It’s meant to be a developer of new transmission where it’s needed in the state,” said Hansen, who thinks that the investor-owned utilities haven’t invested enough in transmission.
“That’s left a number of parts of the state with inadequate transmission. To me that’s the equivalent of your town not being on the railroad back in 1880,” Hansen said.
The San Luis Valley in southern Colorado has some of the “best sun resources in the world,” Hansen said, but lacks adequate transmission lines. Opening access to places like the San Luis Valley and the Eastern Plains is seen as crucial to expanding the use of renewable energy sources and cutting greenhouse-gas emissions.
Xcel Energy-Colorado, the state’s largest electric utility, has significant concerns about the legislation and is talking to the sponsors, said spokeswoman Michelle Aguayo.
“One issue is that the current language duplicates the existing well-established and transparent transmission planning processes and we are concerned this would result in higher costs for our customers without oversight,” Aguayo said in an email.
A report by the Colorado Public Utilities Commission on whether RTOs are the right path for Colorado is due in May, Aguayo added. Xcel Energy recently proposed building a $1.7 billion, 560-mile corridor of transmission lines in mainly rural areas.
The transmission bill allows the PUC to waive the requirement that utilities join a regional network if there aren’t good options or if the commission determines it wouldn’t be in the public interest.
In 2019, Xcel Energy joined with Black Hills Energy and other Colorado companies to become part of the California Western Energy Imbalance Market. An imbalance market isn’t an RTO, but does connect members to a wider market.
Hansen said an imbalance market is a good step, but offers a “small fraction of the benefit of being in an RTO,” including only about 10% of the savings for customers that an RTO would.
“Expanding transmission capacity and improving the connectivity of the grid is one of those foundational things that’s absolutely necessary to achieving Colorado’s greenhouse-gas reduction goals and, really, the country’s greenhouse-gas reduction goals,” said Erin Overturf,deputy director of the clean energy program at the conservation group Western Resource Advocates.
A 2019 law set the goal of reducing the state’s greenhouse gas emissions 26% from 2005 levels by 2025; 50% by 2030; and 90% by 2050.
Expanding Colorado’s connection to regional grids has several benefits, Overturf said, including lower costs for customers through increased efficiency and reliability.
“One of the critiques you hear about renewable sources like wind and solar is the wind doesn’t blow all the time and the sun doesn’t shine all the time,” Overturf said. “But if you expand your geographical footprint, the sun might not be shining in southern Colorado but it’s shining in Kansas, so we can move electricity around to meet our needs.”
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Lawmakers don’t want Colorado to be like Texas; they want to make state’s electric grid regional - The Denver Post
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