The Renewable Energy Fight

Source: BY RONALD BROWNSTEIN, National Journal • Posted: Thursday, March 19, 2015

The battle in Colorado over renewable portfolio standards is a key front in the national climate debate.

(John Moore/Getty Images)

March 18, 2015  DENVER—With a strong environmental community, a vibrant fossil-fuel industry, and a thriving clean energy sector, Colorado encapsulates all the contending interests driving the complex politics of energy and climate. That’s why there are important clues for the national energy debate in the recent partisan collision here over requirements for utilities to generate more electricity from renewable-energy sources.

Such “renewable-portfolio standards,” requiring utilities to generate some of their power from sources like solar and wind, have spread widely since the 1990s. Today, 29 states have adopted such mandatory requirements, with another seven having established voluntary goals.

These requirements, as intended, have jump-started the market for renewable energy. Galen Barbose, a research scientist at the Lawrence Berkeley National Laboratory, says the states with these mandates have accounted for about two-thirds of the total increase in renewable generating capacity that utilities have added nationwide in recent years. That means the states with mandates are annually adding enough renewable production to power about 1.5 million homes.

To meet renewable standards, utilities are relying mostly on wind. And with wind-generated electricity now often competitive in price with coal and natural gas, virtually all the states with mandates are on track to reach them at relatively modest cost. Barbose calculates that meeting the requirements has raised electricity rates by less than 3 percent for consumers.

The process has advanced smoothly enough that several states have raised their initial thresholds. Colorado initially required Xcel, its largest utility, to generate 10 percent of its power from renewables, but the Legislature subsequently raised that to 30 percent by 2020. (Other utilities face lower requirements.) Even with that higher goal, Xcel “is on track, if not ahead of schedule,” says Jeffrey Ackermann, director of the governor’s energy office.

But an aggressive effort by conservatives to roll back state standards has disrupted that balance. Encouraged by the conservative American Legislative Exchange Council, state legislative Republicans have introduced dozens of bills since 2013 to repeal or retrench renewable requirements. So far just two have passed: Ohio last year suspended its renewable requirement for two years, and West Virginia, a core coal state, repealed its standard in February.

Like a hillside fire, the battle then jumped to Colorado. After Republicans won a one-seat majority last November, the state Senate in February approved legislation to retrench the renewable requirements, on an 18-17 party-line vote. Democrats, who still narrowly control the state House, then killed the bill in committee. But every Republican on that committee voted for a rollback. Given the monolithic GOP opposition, “the requirement is definitely at risk again,” if Republicans regain the state House in 2016, says Democratic state Rep. Max Tyler, who chairs the Transportation and Energy Committee.

Local analysts agree the spark that ignited the rollback effort was the legislation that Democrats, then controlling the Legislature, passed in 2013 to double renewable requirements (previously set at only 10 percent) on rural utilities. That measure, approved soon after the Legislature tightened gun-control restrictions, sharpened antagonism between rural communities and a Democratic coalition that, as in most states, is heavily urbanized in Colorado.

Renewable supporters like Tom Plant, senior policy adviser at Colorado State University’s Center for the New Energy Economy, believes the economics of renewable energy should erode rural resistance. In Colorado, he notes, large royalty payments are flowing to farmers and ranchers who have installed wind turbines. Across the West, rural states such as Wyoming and Idaho are building wind capacity to export electricity, mostly to more densely populated blue states.

But while clean energy is generating more investment and employment, its economic impact is still dwarfed by the resurgent fossil-fuel industry, which often resists these mandates. Ideology reinforces interest: Many tea-party conservatives see earlier GOP support for renewable requirements as evidence that the party had deserted small-government principles. It is telling that even Republican Colorado state legislators who represent areas receiving substantial renewable investments supported the rollback.

All this points to continuing state conflict over renewable mandates. So does another factor: The Environmental Protection Agency’s coming regulations to reduce carbon emissions from power plants will pressure states to shift more electrical generation from coal to renewable sources (or natural gas). But Senate Majority Leader Mitch McConnell, who represents coal-producing Kentucky, is already urging states to obstruct the regulations by refusing to develop implementation plans. In Colorado, state Senate Republicans are formulating a bill that would allow the state Legislature to block Democratic Gov. John Hickenlooper from submitting a compliance plan, as he intends to do. As in many states, Colorado’s skirmishing over renewable energy may be just the distant thunder for the coming national confrontation over climate.