Senate Committee on Local Government and Energy (01/29/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON LOCAL GOVERNMENT AND ENERGY

Date:	01/29/2009	ATTENDANCE

Time:	09:43 AM to 12:04 PM	Cadman	A
		Hodge	X
Place:	SCR 353	Kester	X
		Lundberg	X
This Meeting was called to order by		Newell	X
	Senator Schwartz	Foster	X
		Schwartz	X
This Report was prepared by
	Kori Donaldson
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Colorado Rural Electric Association Presentation SB09-039 SB09-022		Witness Testimony and/or Committee Discussion Only Amended, Referred to the Committee of the Whole Amended, Referred to Finance

09:43 AM -- Colorado Rural Electric Association Presentation

The committee was called to order. A quorum was present. Mr. Tom Compton, President, and Mr. Ray Clifton, Executive Director, both of the Colorado Rural Electric Association (CREA), and Mr. Lee Boughey, Senior Manager of Communications and Public Affairs, Tri-State Generation and Transmission, made a short presentation to the committee about providing electricity in rural areas. Committee members received a packet of information about electric cooperatives in the state, prepared by CREA (Attachment A). Mr. Compton explained the organization of electric cooperatives in the state. Committee members also received a handout outlining Mr. Boughey's presentation, prepared by Tri-State Generation and Transmission (Attachment B). Mr. Boughey said his business, Tri-State Generation and Transmission, is a nonprofit, wholesale power supplier owned by 44 electric cooperatives and public power districts. Mr. Boughey walked the committee through Attachment B and told them that one of the goals of his organization is to develop new technology to improve energy efficiency.

(Attachment A can be viewed at Archives)

09:55 AM

Mr. Boughey continued his presentation and highlighted new initiatives related to energy efficiency in which local cooperatives are currently engaged.

10:06 AM

Mr. Boughey addressed questions about standards requiring the integration of renewable energy sources into the existing electric grid. Discussion ensued.

10:10 AM

Mr. Clifton told the committee that the electric industry, including electric cooperatives, is at a crossroads. He said the industry faces new challenges associated with generation, transmission, and rate setting, and that the industry has an aging infrastructure. Mr. Clifton continued by talking about the impact of raising service rates in parts of the state that have a per capita income below the state average. Mr. Clifton and Mr. Boughey addressed a question about the need to build additional infrastructure to address transmission needs. Senator Schwartz thanked the presenters.

10:20 AM -- Senate Bill 09-039

The committee took a brief recess.

10:23 AM

Senator Schwartz, prime sponsor, presented Senate Bill 09-039, which concerns the discretionary authority of cooperative electric associations to establish reasonable graduated rates for increased energy consumption by residential customers. Senator Schwartz explained that the bill will allow for tiered rates. Senator Schwartz addressed questions from the committee and offered clarification about the intent of the bill. The following people testified on the bill:

10:30 AM -- Mr. Del Worley, representing Holy Cross Electric Association, spoke in favor of the bill. Mr. Worley reviewed the areas serviced by his electric cooperative and talked about the purpose of tiered rates. Mr. Worley said the bill will help to achieve energy sustainability and address climate change concerns, and addressed questions about how the bill may change the service rates. Discussion ensued.

10:42 AM -- Mr. Ray Gifford, representing himself, spoke in favor of the bill. He said he supports the bill because it gives electric cooperatives the freedom to experiment with rate structures in order to better match rates to the fluctuations in consumer usage. Mr. Gifford addressed questions about rate setting procedures, seasonal fluctuations in service rates, and different levels of consumer usage. Discussion ensued. Mr. Gifford discussed the move towards innovative rate design in the industry.

10:57 AM -- Ms. Pam Kiely, representing Environment Colorado, spoke in favor of the bill. Ms. Kiely said the bill is a good opportunity for rural cooperatives to use energy more effectively, and explained that reduced consumption makes a profound positive impact on the environment.

11:00 AM -- Mr. Ray Clifton, representing the Colorado Rural Electric Association, spoke in favor of the bill. Mr. Clifton addressed an earlier question about rate-setting procedures in home rule cities versus municipalities, and expressed his support of the bill.

11:04 AM -- Mr. Dan McClendon, representing Delta Montrose Electric Association, spoke in favor of the bill. Mr. McClendon spoke about the importance of energy efficiency in order to offset costs for consumers.

11:07 AM -- Mr. Kent Singer, representing Holy Cross Electric Association and the Colorado Rural Electric Association, spoke in support of the bill. He addressed an earlier question about the requirement to report pending rate changes to consumers. Mr. Singer spoke to Amendment L.004 (Attachment C) and other possible amendments to the bill and addressed questions about the language of the bill.

11:15 AM -- Mr. Tom Easley, representing the Rocky Mountain Climate Organization, spoke in support of the bill and outlined recommendations made by the Colorado Climate Project. Mr. Easley addressed questions about how calculations are made in order to develop new rate structures. Discussion ensued.

11:27 AM -- Mr. Bill Schroeder, representing Intermountain Rural Electric Association, spoke in opposition to the bill and said the bill takes away cooperative member rights to make decisions about rate setting.

11:31 AM -- Mr. Landon Gates, representing the Colorado Farm Bureau, spoke in support of Amendment L.004.

11:32 AM -- Mr. Bill Midcap, representing the Rocky Mountain Farmer's Union, spoke in support of the bill.

11:33 AM

Senator Schwartz made concluding remarks about the bill.


BILL:	SB09-039
TIME:	11:35:40 AM
MOVED:	Schwartz
MOTION:	Refer Senate Bill 09-039, as amended, to the Committee of the Whole with a favorable recommendation. The motion passed on a vote of 4-2-1.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge	Yes
	Kester	No
	Lundberg	No
	Newell	Yes
	Foster	Yes
	Schwartz	Yes

Final YES: 4 NO: 2 EXC: 0 ABS: 1 FINAL ACTION: PASS


BILL:	SB09-039
TIME:	11:38:31 AM
MOVED:	Lundberg
MOTION:	Adopt Amendment L.002 (Attachment D). The motion failed on a vote of 2-4-1.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge	No
	Kester	Yes
	Lundberg	Yes
	Newell	No
	Foster	No
	Schwartz	No

Not Final YES: 2 NO: 4 EXC: 0 ABS: 1 FINAL ACTION: FAIL

Prior to the vote, Senator Lundberg distributed and briefly explained L.002 (Attachment D). Senator Schwartz expressed her concerns with L.002. Discussion ensued.


BILL:	SB09-039
TIME:	11:35:48 AM
MOVED:	Schwartz
MOTION:	Adopt Amendment L.004 (Attachment C). The motion passed without objection.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge
	Kester
	Lundberg
	Newell
	Foster
	Schwartz

Not Final YES: 0 NO: 0 EXC: 0 ABS: 1 FINAL ACTION: Pass Without Objection

11:46 AM -- Senate Bill 09-022

Senator Bacon, prime sponsor, presented Senate Bill 09-022, which increases the annual limit of payments generated from state school lands that can be credited to the State Board of Land Commissioners Investment and Development Fund from $1 million to $5 million. Committee members received a fact sheet concerning the bill, prepared by the Colorado Board of Land Commissioners (Attachment E). The following people testified:

11:50 AM -- Mr. Steve Holdren, representing the Colorado Board of Land Commissioners, spoke in support of the bill.

11:52 AM -- Mr. Jon Brejcha, also representing the Colorado Board of Land Commissioners, spoke in support of the bill.

11:54 AM -- Mr. Tobin Follenweider, also representing the Colorado Board of Land Commissioners, spoke in support of the bill. Committee members received a flowchart illustrating the FY 2008-09 distribution of school trust revenues and proceeds (Attachment F). Mr. Follenweider explained the flowchart.

11:57 AM -- Mr. Bruce Caughey, representing the Colorado Association of School Executives, spoke about the bill. He expressed some concerns about the bill and recommended a possible conceptual amendment.

12:00 PM

Senator Bacon made concluding remarks about the bill. Senator Bacon distributed and briefly explained Amendment L.001 (Attachment G) and Amendment L. 002 (Attachment H).


BILL:	SB09-022
TIME:	12:00:31 PM
MOVED:	Hodge
MOTION:	Refer Senate Bill 09-022, as amended, to the Senate Committee on Finance with a favorable recommendation. The motion passed on a vote of 6-0-1.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge	Yes
	Kester	Yes
	Lundberg	Yes
	Newell	Yes
	Foster	Yes
	Schwartz	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 1 FINAL ACTION: PASS


BILL:	SB09-022
TIME:	12:02:28 PM
MOVED:	Hodge
MOTION:	Amend the bill, page 4, lines 4 and 5 of the bill: strike "OR OTHER GOVERNMENT ENTITIES". The motion passed without objection by those members present.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge
	Kester
	Lundberg
	Newell
	Foster
	Schwartz

Not Final YES: 0 NO: 0 EXC: 0 ABS: 1 FINAL ACTION: Pass Without Objection


BILL:	SB09-022
TIME:	12:01:23 PM
MOVED:	Hodge
MOTION:	Adopt Amendment L.002 (Attachment H). The motion passed without objection by those members present.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge
	Kester
	Lundberg
	Newell
	Foster
	Schwartz

Not Final YES: 0 NO: 0 EXC: 0 ABS: 1 FINAL ACTION: Pass Without Objection


BILL:	SB09-022
TIME:	12:00:50 PM
MOVED:	Hodge
MOTION:	Adopt Amendment L.001 (Attachment G). The motion passed without objection by those members present.
SECONDED:
		VOTE
	Cadman	Absent
	Hodge
	Kester
	Lundberg
	Newell
	Foster
	Schwartz

Not Final YES: 0 NO: 0 EXC: 0 ABS: 1 FINAL ACTION: Pass Without Objection

12:04 PM

The committee adjourned.