SENATE Amended 2nd Reading May 8, 2012 HOUSE 3rd Reading Unamended May 2, 2012 HOUSE 2nd Reading Unamended May 1, 2012Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO REVISED This Version Includes All Amendments Adopted on Second Reading in the Second House LLS NO. 12-0372.01 Kate Meyer x4348 HOUSE BILL 12-1351 HOUSE SPONSORSHIP Becker, SENATE SPONSORSHIP Tochtrop, House Committees Senate Committees Appropriations State, Veterans & Military Affairs A BILL FOR AN ACT Concerning inclusion under the renewable energy standard's definition of recycled energy such energy that combusts synthetic gas derived from waste materials through pyrolysis as the fuel source for generation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Currently, recycled energy is a type of eligible energy resource that may be used to meet renewable energy standards. The bill adds to the definition of "recycled energy" the energy that is produced by a generation unit with a nameplate capacity of not more than 15 megawatts that combusts gas generated from synthetic gas derived from waste materials through pyrolysis as the fuel source for generation. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 40-2-124, amend (1) introductory portion, (1) (a) introductory portion, (1) (a) (III), (1) (a) (VI), (1) (c) (III), (1) (c) (VI) introductory portion, and (1) (f) introductory portion; and add (8) as follows: 40-2-124. Renewable energy standard - definitions - net metering - legislative declaration - report - repeal. (1) Each provider of retail electric service in the state of Colorado, other than municipally owned utilities that serve forty thousand customers or fewer, shall be considered is a qualifying retail utility. Each qualifying retail utility, with the exception of cooperative electric associations that have voted to exempt themselves from commission jurisdiction pursuant to section 40-9.5-104 and municipally owned utilities, shall be is subject to the rules established under this article by the commission. No additional regulatory authority of the commission other than that specifically contained in this section is provided or implied. In accordance with article 4 of title 24, C.R.S., the commission shall revise or clarify existing rules to establish the following: (a) Definitions of eligible energy resources that can be used to meet the standards. "Eligible energy resources" means recycled energy and renewable energy resources. The commission shall determine, following an evidentiary hearing, the extent to which such electric generation technologies utilized in an optional pricing program may be used to comply with this standard. A fuel cell using hydrogen derived from an eligible energy resource is also an eligible electric generation technology. Fossil and nuclear fuels and their derivatives are not eligible energy resources. For purposes of this section: (III) (A) "Recycled energy" means energy produced by a generation unit with a nameplate capacity of not more than fifteen megawatts that converts the otherwise lost energy from the heat from exhaust stacks or pipes to electricity and that does not combust additional fossil fuel or, in accordance with sub-subparagraph (B) of this subparagraph (III), combusts synthetic gas derived from waste materials through pyrolysis as the fuel source for generation. "Recycled energy" does not include energy produced by any system that uses energy, lost or otherwise, from a process whose primary purpose is the generation of electricity, including, without limitation, any process involving engine-driven generation or pumped hydroelectricity generation. (B) For the purposes of the renewable energy standard, the commission may authorize a maximum of four projects, the cumulative nameplate rating of which projects may not exceed sixty-five megawatts, that use pyrolysis to combust synthetic gas derived from waste materials. (VI) "Wholesale distributed generation" means a renewable energy resource in Colorado with a nameplate rating of thirty megawatts or less and that does not qualify as retail distributed generation. (c) Electric resource standards: (III) Each kilowatt-hour of electricity generated from eligible energy resources, in Colorado, other than retail distributed generation, shall be counted counts as one and one-quarter kilowatt-hours for the purposes of compliance with this standard. (VI) Each kilowatt-hour of electricity generated from eligible energy resources at a community-based project shall be counted as one and one-half kilowatt-hours. For purposes of this subparagraph (VI), "community-based project" means a project: located in Colorado: (f) Policies for the recovery of costs incurred with respect to these standards for qualifying retail utilities that are subject to rate regulation by the commission. These policies shall must provide incentives to qualifying retail utilities to invest in eligible energy resources. in the state of Colorado. Such The policies shall must include: (8) (a) During the first regular session of the seventy-first general assembly, but prior to April 10, 2017,the director of the public utilities commission shall report to the appropriate house of representatives and senate committees of reference for energy-related matters, as determined by the speaker of the house of representatives and the president of the senate, sitting jointly, regarding the results of the expansion of the term "recycled energy" effected by House Bill 12-1351, enacted in 2012. The report shall include, at a minimum, any jobs created and other economic benefits realized, any energy generated, emissions reductions, and landfill reductions resulting from or fairly attributable to that expansion. (b) This subsection (8) is repealed, effective September 1, 2017. SECTION 2. In Colorado Revised Statutes, add 40-2-124.5 as follows: 40-2-124.5. Greenhouse gas mitigation projects - coal mine methane gas - legislative declaration - definition. (1) The general assembly finds, determines, and declares that the capture of coal mine methane gas provides many benefits to Colorado citizens by making beneficial use of a source of energy that would otherwise be wasted, reducing greenhouse gas emissions, and providing new jobs and revenues to local communities. (2) As used in this section,"coal mine methane gas" means the greenhouse gas methane captured from active and inactive coal mines, where it is determined that the methane is escaping to the atmosphere. At active mines, only methane vented in the normal course of mine operations and safety procedures, and, at inactive mines, only methane that is naturally escaping to the atmosphere, is coal mine methane gas. The capture and combustion of coal mine methane gas as a clean energy source may be verified by a qualified third party following established carbon offset protocols for climate protection. (3) Each kilowatt-hour of electricity generated from coal mine methane gas is counted as one kilowatt-hour for purposes of compliance with the renewable energy standard under section 40-2-124 as an eligible energy resource; except that the total amount of electricity generated by coal mine methane gas to be counted toward compliance with the renewable energy standard established in section 40-2-124 must not exceed fifty megawatts of nameplate capacity. SECTION 3. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 8, 2012, if adjournment sine die is on May 9, 2012); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2012 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.