House Committee on Transportation & Energy (03/18/2015)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON TRANSPORTATION & ENERGY

Date:	03/18/2015	ATTENDANCE

Time:	01:39 PM to 04:52 PM	Buck	X
		Carver	X
Place:	HCR 0112	Coram	X
		Esgar	X
This Meeting was called to order by		Kraft-Tharp	X
	Representative Tyler	Melton	X
		Moreno	X
This Report was prepared by		Neville P.	X
	Matt Kiszka	Nordberg	*
		Sias	X
		Winter	X
		Mitsch Bush	X
		Tyler	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB15-1284		Amended, Referred to the Committee of the Whole

01:40 PM

The committee was called to order. A quorum was present.

01:40 PM -- HB15-1284

Representatives Winter and Roupe, co-prime sponsors, came to the table to present House Bill 15-1284. They explained that the bill seeks to remove restrictions for implementing community solar gardens (CSG). Under Colorado's Renewable Energy Standard (RES), retail customers whose property is not well suited for on-site generation may buy output from a centrally located distributed generation facility with other subscribers. These facilities are also known as CSGs.

Current law requires subscribers to live in the same county as the CSG with one exception. If the subscriber's county has less than 20,000 residents, the CSG may be in an adjacent county as long as that county also has less than 20,000 residents. This bill eliminates these population requirements. The bill also increases the minimum number of subscribers in a CSG with a generation capacity larger than 500 kilowatts from 10 to 25. Finally, the bill refines statutory provisions governing a utility's cost recovery for operation of a CSG.

The sponsors responded to questions on whether the bill would affect Rural Electric Authorities (REA), the costs of CSGs that can be passed on to ratepayers under the bill, where future CSGs are likely to be situated in the state, why the original statute called for a CSG subscriber to live in the same county as the CSG they subscribe to, how the bill changes the aggregate retail rate for a subscriber to an average total retail rate, the cap on the size of a CSG under the bill, and if the bill moves Colorado towards more unregulated energy production.

01:59 PM -- Robin Kittel, representing Public Service Company and Xcel Energy, spoke in opposition to the bill. She said that Xcel Energy is very supportive of renewable energy resources, and that it was in support of the original legislation that created CSGs. She said that there is no need to expand customer access to CSGs in Colorado and that existing law functions adequately for the purposes of implementing CSGs in the state. She said that Xcel Energy's renewables fund raises roughly $56 million on an annual basis, which allows Xcel Energy to provide its customers with 2,250 megawatts (MW) of utility scale wind and solar. Ms. Kittel said that solar can be provided more cheaply through utility-scale solar projects. She responded to questions on whether utility-scale solar is more cost effective than CSGs. Ms. Kittel discussed PUC regulation of CSGs, and responded to questions on the SunShare CSG, Public Utility Commission (PUC) rate regulation of CSGs, the costs for renewable production generated by a public utility, what the rate is for Xcel when it purchases energy from a solar farm, how Xcel Energy recoups the cost of interconnection for a CSG and how the bill would affect this, how much Xcel Energy currently pays for Renewable Energy Credits (RECs) generated by CSGs, and how Xcel can move beyond its stance of opposition in light of the fact that its customers are asking for more access to CSGs. Committee discussion ensued.

02:33 PM

Ms. Kittel responded to questions on the satisfaction of CSG subscribers, if utility customers can subscribe to utility-scale solar, who decides the size of a CSG, and what the costs of energy transmission are.

02:39 PM -- Heidi Morgan, representing Black Hills Energy, spoke in opposition to the bill. She said that Black Hills is concerned that the bill removes a utility's ability to recover the costs associated with system upgrades. She added that this cost could be transferred to the customer. She responded to questions on changes to retail rates under the bill, Black Hills' concerns with the lack of regulation of CSGs, the regulation of utility electricity transmission, where Black Hills stands on the contiguous county aspect of the bill, if the energy generated from CSGs will help Black Hills reach its renewable energy targets under Colorado's RES, the anticipated increased costs for Black Hills for connecting additional CSGs to the grid, and why Black Hills is opposed to writing rate-making processes into statute.

02:56 PM -- Gene Camp, representing the PUC, came to the table for questions. He said that the PUC went through a lengthy rule-making process when CSGs were first passed into law, and that it had made a December 26, 2014 ruling granting energy production of up to 60 MW from CSGs in 2015 and 2016. Mr. Camp responded to questions on the amount of generation the PUC had granted CSGs, PUC regulation of CSGs, the PUCs authority to regulate grid connection costs, if there is anything in the bill that was previously requested but not granted during the PUC rule-making process, if the bill conflicts with the recent rulings of the PUC, if the PUC made its rulings in conformity with existing statute, tracking of CSG generation in the state, and the relative cost of renewables versus other forms of energy.

03:13 PM -- David Amster, representing SunShare, and Tom Hunt, representing the Clean Energy Collective (CEC), spoke in support of the bill. Mr. Amster discussed the issues that companies operating CSGs and customers of CSGs have experienced under current statute, and how the bill would remove roadblocks to the growth of CSGs in the state. He explained his company, SunShare, and how the bill would help it grow. He said the bill would allow for economies of scale within renewables and allow people to opt in to consuming renewable energy. Mr. Amster discussed the intentional colocation of CSGs by project developers, how a CSG is connected to the grid, and how CSGs will have to pay for powerline connecting costs under the bill. He distributed a letter from the University of Denver detailing why it had chosen not to participate in Xcel Energy's Solar Rewards Community Program (Attachment A). He responded to questions on the size of SunShare's projects in Colorado Springs, if the bill will increase the rates of people who do not opt in to a CSG, and if SunShare manufactures its own solar panels.

150318 AttachA.pdf

Mr. Amster discussed the 2 percent renewable energy standard adjustment (RESA) requirement for utilities in Colorado and the incentives for solar gardens in the state. He responded to a question on the cost for utilities to purchase energy from CSGs.

Mr. Hunt said that CEC is supportive of the bill as long as amendments that address variable and average rate options for CSG customers are adopted. He discussed how changes made by the bill to contiguous county allowances for subscribers to a CSG will help grow CSGs in Colorado. Mr. Amster and Mr. Hunt responded to questions on whether CSGs connect to a utility's distribution system or its transmission system and if non-subscribers will have to cover the cost of additional CSGs under the bill.

03:42 PM -- Sam Masias, representing himself, spoke in favor of the bill. He said that Denver has an issue with regional haze that CSGs will help reduce. He discussed the size of CSG arrays in the state, the challenges involved in connecting CSGs to the electric grid, the cost efficiency of CSGs, and where panels are generally sourced from.

03:52 PM -- John Bringenberg, representing the Colorado Solar Energy Industry Association (COSEIA), spoke in favor of the bill. He said that COSEIA is supportive of the bill if it is amended to allow a subscriber to buy in to a CSG in any county.

Representative Winter distributed a letter of support to the committee (Attachment B) from Bella Energy, a Colorado solar power provider.

150318 AttachB.pdf

03:57 PM -- Aaron Trackman, representing himself, spoke in support of the bill. He said that the bill would expand opportunities for people to access community solar.

03:58 PM -- Karey Christ-Janer, representing herself, spoke in support of the bill. She said that she is a customer of both SunShare and CEC, that community energy is cost effective, that CSGs respond to the public's demand for solar energy, and that the state needs to incentivize the construction of CSG projects in the areas where they are most needed.

04:07 PM

Representative Winter distributed Amendment L.004 (Attachment C), and the sponsors explained that it addresses concerns with the variable and average rate aspects of the bill. They responded to questions from the committee on the amendment. Discussion ensued.

150318 AttachC.pdf

04:19 PM

The committee went into recess.

04:44 PM

The committee came back to order. Representative Tyler distributed Amendment L.003 (Attachment D), and said that it amends the bill to have it only address the expansion of CSG subscriptions to contiguous counties. Committee discussion ensued.

150318 AttachD.pdf


BILL:	HB15-1284
TIME:	04:46:22 PM
MOVED:	Tyler
MOTION:	Adopt amendment L.003 (Attachment D). The motion passed on a vote of 9-4.
SECONDED:	Winter
		VOTE
	Buck	No
	Carver	Yes
	Coram	Yes
	Esgar	Yes
	Kraft-Tharp	Yes
	Melton	Yes
	Moreno	Yes
	Neville P.	No
	Nordberg	No
	Sias	No
	Winter	Yes
	Mitsch Bush	Yes
	Tyler	Yes

YES: 9 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PAS

04:50 PM

The bill sponsors made their closing comments on the bill.


BILL:	HB15-1284
TIME:	04:50:38 PM
MOVED:	Winter
MOTION:	Refer House Bill 15-1284, as amended, to the Committee of the Whole. The motion passed on a vote of 8-5.
SECONDED:	Melton
		VOTE
	Buck	No
	Carver	Yes
	Coram	No
	Esgar	Yes
	Kraft-Tharp	Yes
	Melton	Yes
	Moreno	Yes
	Neville P.	No
	Nordberg	No
	Sias	No
	Winter	Yes
	Mitsch Bush	Yes
	Tyler	Yes

Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:52 PM

The committee adjourned.