Kimberly Lewis | Energy leadership that works
Colorado is considered to be one of America’s great renewable energy success stories. The State ranks fourth in the nation in solar production and has 6 percent of the United States wind market. However, Colorado would not have been able to take advantage of these resources without the support of its utilities.
Virginia should follow Colorado’s example and adopt policies that will encourage the development of a renewable energy market. As a young citizen of Virginia, I am alarmed by the way we continue to damage the environment. The effects of global warming will be devastating; a radical shift in our energy culture is needed to ensure our future. We can recycle, use CFLs, and reduce our carbon emissions, but it is not enough. We need Virginia’s utilities to take the lead on renewable energy.
In 2000, the Colorado State Legislature first introduced a renewable portfolio standard bill. Renewable portfolio standards (RPS) require utilities to provide a set percentage of their power from renewable energy sources. These policies create a reliable demand for renewable energy, encourage competition among providers and ultimately drive down rates for consumers. Oblivious to its benefits, the Colorado General Assembly three times defeated the RPS. Finally, in 2004 it was passed on a public ballot initiative. This RPS required large utilities to generate 10 percent of their power from renewable energy sources by 2015.
The debate before the initiative passed centered on economic feasibility, availability of resources, and protection of the environment. Many were against the bill until studies found that costs would be minimal. The retail rate impact rule also assured customers that any rate increase would not exceed 1 percent of their annual electric bill.
There was, as one might expect, opposition from the larger utilities despite the ballot’s popular support. Colorado’s rapid move toward renewable energy came when these generators found that meeting RPS goals was easier and less costly than initially feared. Xcel, one of the state’s leading utilities, met the 10 percent standard in 2007, eight years earlier than mandated. The utilities have now embraced the profitable renewable energy market. In 2007, with the utilities’ strong support, the RPS target doubled to 20 percent by 2020. It also brought in smaller municipal and cooperative utilities, which are required to achieve 10 percent renewable energy by 2020.
The RPS has also attracted global renewable energy firms to Colorado. Vestas, a leading supplier of wind turbines, chose the state for its first North American facility. This was in part due to the policies in place that guarantee a market for renewable energy. This investment also benefitted the state by creating nearly 500 jobs.
Growth in the renewable energy sector has had an even broader impact on Colorado’s economy. In 2007, the renewable energy and energy efficiency (RE&EE) industries created over 91,000 jobs in Colorado. The oil and gas sector is more than 50 percent larger in terms of revenue, yet the RE&EE sector provides 70 percent more jobs. In total, the RE&EE sector creates more than 2.5 times as many jobs per dollar when compared to the oil and gas sector (MIS & ASES 2008).
Prior to RPS legislation, Colorado had the potential for a profitable alternative energy industry. It took a change in public policy to kick-start the use of these resources. The RPS has guaranteed a demand for alternative energy, thus creating a reliable market for the renewable energy industry. Virginia, without a mandatory RPS, could learn a lesson from Colorado. Smart policy decisions will allow the renewable energy industry to flourish, with minimal costs to consumers and great benefits to the environment and economy.
Utilities have the power to shape Virginia’s energy future even without a government mandate. Every year we delay causes further damage to future generations. Utilities should not be investing in new coal-burning plants. Instead they should supply what Virginians want and need, a sustainable, clean energy industry.
– Kim Lewis is a research intern at Public Policy Virginia, a Charlottesville-based think tank that focuses on climate change issues.