Energy policy in Colorado

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Energy policy in Colorado
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Quick facts
Energy department: Colorado Energy Office[1]
State population: 5.2
Per capita income: $45,135
Energy consumption
Total energy consumption: 1,481 trillion BTU[2][3]
Per capita energy consumption: 289 million BTU
Energy spending
Total state energy spending: $19.333 million
Per capita energy spending: $3,779
Residential natural gas price: $8.72
Residential electricity price: $11.69
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Glossary of energy terms
Energy policy in Colorado
Fracking in Colorado
Energy policy in Colorado depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Colorado, and many other states, focuses on improving the use of Colorado's energy resources, and improving efficiency through providing technical guidance, and financial support. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.[4]

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Colorado

Energy overview

State facts

Below are quick facts about Colorado's energy climate.

Colorado:

  • has abundant traditional energy resources such as oil, coal and natural gas.
  • employs renewable energy in the form of wind, biofuels and hydroelectric energy.
  • is the sixth largest producer of natural gas in the nation.
  • is the seventh largest producer of energy in the United States.
  • has the eighth smallest per capita expenditure for energy consumption in the United States.
  • has almost 70 hydroelectric facilities.
  • mandates that 30 percent of all electricity sold in Colorado come from renewable sources by 2020.[5]

In Colorado:

  • about three-fourths of households use natural gas as their main home heating source.
  • average household energy costs are 23 percent less than the national average, primarily due to historically lower natural gas prices in the state.
  • about 66 percent of generated electricity comes from coal, 20 percent from natural gas and 14 percent from renewable energy resources.
  • the industrial sector consumes the most electricity.
  • coal-fired plants generate about two-thirds of total generated electricity.
  • most coal is mined from Colorado, but some is imported from Wyoming.
  • all prices for electricity are below the national average except in the industrial sector.[6]

Available energy resources

Traditional energy resources are found throughout Colorado. Oil production has been steadily increasing and now the state provides 1 out of every 50 barrels of total U.S. output. Much of the oil comes from Niobrara Shale, which is found in northeastern Colorado. Colorado ranks sixth in the nation for total natural gas production. There are two natural gas trading hubs in Colorado, Cheyenne and White River. Much of the natural gas comes from the San Juan Basin, but it is also mined from the Piceance and Raton basins. Colorado has a vast amount of coal and mining is focused in the Green River, Uinta and the San Juan basins.[7]

Colorado has access to wind resources in the eastern plains and Rockies, as well as solar resources in the south closer to the New Mexico border. Wind turbines account for the largest share of the state's renewable electricity generation. Currently there are almost 70 small-scale hydropower projects in Colorado and some burgeoning biomass production facilities as well. Colorado has access to a great number of hot springs, and the groundwork is being laid to take advantage of those resources.[8]

Consumption and prices

Energy consumption in Colorado
CO energy sector usage chart.png

Legend[9]
     Transportation       Residential     Industrial       Commercial
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The main consumer of energy in Colorado is the industrial sector, though the transportation sector is close behind. The sector that consumes the least is the commercial, with about 19 percent of total consumption. Prices for energy resources and electricity in Colorado are less than the national average except for the industrial cost of electricity, which is slightly above the national average. The difference in price is small, but it could be due to the nature of the work the industrial sector does.[10]

Most of the energy used in Colorado is in the form of petroleum and the majority of the petroleum used is in the form of motor gasoline.[11] The large amount of petroleum that is consumed follows from Colorado's second largest consumer of energy, the transportation sector. The price for natural gas is about 30 percent lower than the national average, and its electricity price is five percent less than the national average.[12]

The Colorado average gasoline price is usually slightly below the national average, but it generally follows the overall trend.[13] Colorado has only an excise tax on gasoline, which is 22 cents per gallon.[14]

Comparisons tables

The table below compares Colorado's consumption and spending for energy, as well as prices for natural gas and electricity and carbon emissions to those of Utah which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Colorado's ranking of 14th in per capita income is higher than Utah's ranking of 47th.
  • Colorado's ranking of 45th in the price of natural gas means that the price of natural gas is lower than in Utah where the ranking is 36th.
  • Utah's rank of 34th in carbon emissions means that carbon emissions are lower than in Colorado with a ranking of 22nd.
  • Utah's rank of 45th for per capita energy spending means that it spends slightly less per capita on energy than Colorado with a ranking of 43rd.
Consumption and Expenditures Comparisons Summary
Type ColoradoUtahU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population5.2 million222.9 million33313.9 million
Per Capita Income Average$45,13514$34,06147$42,693
Total Consumption1,481 trillion BTU25797 trillion BTU3497,301 quadrillion BTU
Per Capita Energy Consumption289 million BTU34283 million BTU36312 million BTU
Total Spending on Energy$19.333 million27$10.341 million34$1,394,088 million
Per Capita Spending on Energy$3,77943$3,70645$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$8.7245$8.9036$12.48
Price of Electricity, cents per kWh$11.6922$10.103812.31
Total Carbon Dioxide Emissions, million metric tons (2010)96.52264.2345,631
*Rank is from highest to lowest.

About 72 percent of Colorado homes use natural gas to heat their home, while about 20 percent use electricity to heat their homes. The relatively low per capita spending on energy in Colorado can be attributed to the fact that over almost three-fourths of homes use natural gas for their main source of heating and the price of natural gas in Colorado is one of the lowest in the nation.[15]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Colorado
Source Colorado 2011 U.S. average 2011
Natural gas 72.7% 49.5%
Fuel oil 0.1% 6.5%
Electricity 19.2% 35.4%
Liquid Petroleum Gases (LPG) 4.8% 5%
Other/none 3.2% 3.6%

Production and transmission

Colorado generated about 2,746 BTU in 2011. Over 66 percent of Colorado's generation is from natural gas, coal makes up the next largest portion with about 20 percent of the total electricity generation produced from coal. 17.7 trillion BTU came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[16]

Energy production by type in Colorado, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 226.9 8.26% 1.9%
Natural gas 1,831.2 66.67% 6.91%
Coal 586.8 21.36% 2.66%
Biofuels 17.7 0.64% 0.92%
Other 84 3.06% 1.18%

Electricity consumed in Colorado is primarily from coal, but natural gas also plays a sizable role. This is due to the fact that those energy sources are also the type of energy source produced in Colorado.Electricity in Colorado is largely transmitted by the Public Service Company of Colorado, but both the Tri-State Generation and the Transmission Association also contribute. The transmission infrastructure is aging and, according to the Colorado Energy Office, in need of expansion in order to meet the demand of the growing state.[17]

Over 45,000 miles of pipelines deliver natural gas, crude oil and other energy products to residents of Colorado. Eight companies provide pipelines for crude oil, and ten companies operate the natural gas pipelines.[18]

There are 29 municipal electric systems in Colorado and together they provide energy to 403,636 customers in Colorado.[19][20] There are two investor owned utilities, Xcel Energy and Black Hills Energy, which provide about 62 percent of electrical power to Colorado residents. There are 26 rural electrical cooperatives that provide electric services in Colorado. The cooperatives provide about 21 percent of the total electricity consumed in the state, and they provide mainly to residential areas.[21]

There are 14 natural gas services in Colorado. Six of those 14 also provide electricity. The gas supply is mainly purchased through external sources for resale through the gas utilities. Eight of the utilities are municipal utilities, meaning they are operated through local cities' city councils and local government. The remaining six natural gas utilities are investor-owned.[22]

Where electricity comes from in Colorado[23]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 1 0.03% 0%
Natural gas-fired 659 16.48% 0%
Coal-fired 2,586 64.68% 0%
Nuclear 0 0% 0%
Hydroelectric 64 1.6% 0%
Other renewables 710 17.76% 0%
Total net electricity generation 3,998 100% 0%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues

Colorado aggressively pursues renewable energy resources, and is concerned with finding efficient ways to produce energy that are also clean sources of energy.[24]

See also: Fracking in Colorado

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Colorado was ranked as 16th most efficient by the American Council for an Energy-Efficient Economy in November of 2013. This ranking is down two spots from 2012.[25] The state was the first ever to employ a voter-approved Renewable Portfolio Standards (RPS) in 2007. Colorado's RPS requirements differ depending on who is providing the electricity. For investor-owned companies, the upcoming requirement is to have 12 percent of its total electricity sales from 2011 through 2014 be supplied by renewable sources. The final goal is to have 30 percent of its retail sales by 2020 be powered through renewable sources. Cooperatives and municipal utilities are required to have 10 percent of their total retail electricity sales be powered by renewable energy by 2020. The interim goal is to have six percent of its total retail electricity provided by renewable sources for the years 2015-2019. Cooperatives serving over 100,000 meters are held to a requirement of 20 percent by 2020. Qualifying technologies include: solar, landfill gas, wind, biomass, hydroelectric, geothermal, coal mine methane, anaerobic digestion, fuel cells using renewable fuels and pyrolysis of municipal solid waste.[26][27][28][29]

The conservative American Tradition Institute estimates that the RPS standards in Colorado will cost the state's electricity consumers about $1,371,000 in 2015 because renewable energy technologies are more expensive than fossil fuels such as coal.[30] However Colorado's natural gas price ranks as the 45th lowest, and the price of electricity is about average.[31]

Major legislation

Policypedia
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Policy and Elections
Fracking was been a major policy area in the elections this year in Colorado. Find out more about Fracking in Colorado.
  • Renewable Energy Standard, (HB 10-1001) was the first RPS initiative ever passed in the United States. The bill requires the state's largest utilities to supply at least 10 percent of their customers' electricity from renewable energy sources. The percentage requirement has been raised by subsequent bills in an effort to continue pushing clean energy.[32]
  • Clean Air - Clean Jobs (HB 10-1365) is meant to decrease nitrogen oxide emissions from coal-fired power plants in order to make compliance with federal clean air regulations simpler.[33]
  • Facilitation of the Financing of Renewable Energy (HB 08-1350) created the first Property Assessed Clean Energy (PACE) system in Colorado. PACE operates by facilitating the lending and sale of bonds, then a business funds itself with the proceeds. Then later the debt is repaid over a timeline of a few years. The debt due is determined by a yearly evaluation of their property tax bill.[34]
  • The American Reinvestment and Recovery Act of 2009 grants the Colorado Energy Office a budget of over 16 million dollars to promote extraordinary projects that promote energy efficiency and or renewable energy. Eligible projects are broad, but a basic criteria is: any significant retrofitting of buildings, support for companies directly involved in the renewable energy sector, and any other projects that meet the basic goals of the program.[35]
  • Colorado Renewable Energy and Infrastructure Authority Act (HB07-1150) created the Colorado Clean Energy Development Authority (CEDA). The legislation delegated, to CEDA and local governments, the authority to finance bonds that would promote energy efficiency. Many of the bonds go towards paying for the installation of renewable energy systems for private residences and commercial property.[36]
  • Net Metering (SB 09-51 and HB 08-1160) manages the metering and billing arrangement used when customers install renewable energy generating equipment on their property. The meters measure the net amount of energy produced and consumed by utilities which is later used to determine billing procedures.[37]
  • SB 145 and HB 1126 provide a sales tax credit to property owners to incentivize installation of solar, wind, biomass, or other renewable energy technologies systems on their property. The incentive applies to "any fixture, product, system, device or interacting group of devices that produce electricity from renewable sources…" The incentive is allocated through the local level of government.[38]

Ballot measures

Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.

State environmental policy


See also
Local fracking on the ballot

Statewide fracking on the ballot

Below is a list of energy related ballot measures across Colorado. These ballot measures cover issues from fracking bans, to utilities and related tax questions.

Government agencies and committees

  • The Colorado Energy Office (CEU) improves the effective use of all of Colorado's energy resources and the efficient consumption of energy throughout the state. The CEU's goal is to provide support in any and all forms that will help advance the effective use of Colorado's energy resources. The CEU works towards helping the residents of Colorado have healthier and more prosperous lives through innovations in energy production, better consumption practices and maintaining safe environmental standards.[40]
  • The Colorado Public Utilities Commission is an independent, quasi-executive agency in the Colorado state government and a subdivision of the state's Department of Regulatory Agencies. The commission is responsible for regulating the state's public utilities: telecommunications, electric, gas and water firms. It also has "partial regulatory control over municipal utilities and electric associations," and supervises railroad and motor carrier (trucking, taxi, towing) firms.[41]
  • The Colorado Department of Natural Resources manages and conserves California's land, water, mineral and wildlife resources. The Executive Director oversees this agency, which is responsible for 26 departments, commissions, councils, divisions, committees and boards, including the Colorado Oil and Gas Conservation Commission. The Department is oversees the exploration and development of mineral resources and the conservation of these and other resources.[42]

Major organizations

  • The Colorado Renewable Energy Society strives to lead Colorado to an energy efficient economy that is based on renewable energy economy. The Society focuses on educating the public through public events that display the ways renewable energy technologies can be implemented into daily life easily. They also incentivize efficient energy projects and focus on policy and economic development.[43]
  • The Colorado Solar Energy Industries Association (COSEIA) works to expand solar markets and generate jobs and economic prosperity for Coloradans. The Association cooperates with other groups to remove market barriers, and educate the public about opportunities to implement solar energies. COSEIA also works to ensure that Colorado meets the RPS goal of 30 percent renewable energies by 2020.[44]
  • The Community for Sustainable Energy focuses on grassroots activism to raise public awareness about energy issues and create consumer demand to change the energy system in Colorado. The 2014 goal for CFORSE is to make Home Energy Efficiency Remodels (HEER) affordable, market attractive and convenient.[45]
  • Conservation Colorado fights to ensure that the environmental interests are represented in energy policy. The organization focuses mainly on ensuring that some land is kept wild, and to ensure that drilling doesn't have a net negative impact on the environment. The mission of the organization is to create change from grassroots movements to ensure that the air, land, water and people of Colorado are protected from the side-effects of extracting resources.[46]
  • The Colorado Pipeline Association (CoPA) consists of pipeline operators in the state that are dedicated to promoting pipeline safety by providing information for excavators, state residents, businesses, emergency responders and public officials. The Association holds meetings and inspects, regulates and enforces intrastate gas pipeline safety requirements.[47]

In the news

This section displays the most recent stories in a Google news search for the term Colorado+Energy+Policy

All stories may not be relevant to this page due to the nature of the search engine.

Colorado Energy News Feed

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See also

External links

References

  1. Colorado Energy Office, Welcome, accessed Mar. 10, 2014
  2. These figures come from the U.S. Energy Information Administration, "State Profiles and Energy Estimates, Colorado Overview." Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013
  3. U.S. Energy Information Administration, "Colorado Overview", accessed February 5, 2014
  4. Colorado Energy Office', "About Us, accessed February 19, 2014
  5. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  6. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  7. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  8. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  9. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  10. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  11. U.S. Energy Information Administration, "Table C4. Total End-Use Energy Consumption Estimates, 2011," accessed March 10, 2014
  12. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  13. To compare current gasoline prices in Colorado to the U.S averages, go to [1] GasBuddy.com
  14. Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013, accessed February 19, 2014
  15. United States Energy Information Administration, Colorado Profile, accessed Mar. 10, 2014
  16. U.S. Energy Information Administration', Colorado Profile Analysis, updated December 18, 2013, accessed February 19, 2014
  17. Colorado Energy Office, "Transmission", accessed February 21, 2014
  18. Colorado Pipeline Association, Homepage, accessed February 21, 2014
  19. Colorado Association of Municipal Utilities, "Municipal Electric Systems in Colorado," accessed March 11, 2014
  20. Colorado Association of Municipal Utilities, "Municipal Electric Systems in Colorado," accessed February 21, 2014
  21. Governor's Energy Office, "2010 Colorado Utilities Report," August 2010, accessed February 21, 2014
  22. Governor's Energy Office, 2010 Colorado Utilities Report, August 2010, accessed February 21, 2014
  23. These figures come from the EIA State Profiles and Energy Estimates [2] U.S. Energy Information Administration, "Colorado Overview," accessed February 5, 2014
  24. Governor's Energy Office, 2010 Colorado Utilities Report, August 2010, accessed February 21, 2014
  25. American Council for an Energy-Efficient Economy (ACEE), 2013 State Energy Efficiency Scorecard, November 2013, accessed February 21, 2014
  26. Database for Incentives for Renewables and Efficiency, Renewable Energy Standard, updated June 25, 2013, accessed February 21, 2014
  27. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  28. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  29. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  30. American Tradition Institute, The Economic Impact of Colorado's Renewable Portfolio Standard, February 2011, accessed February 21, 2014
  31. U.S. Energy Information Administration, Colorado Profile Analysis, December 18, 2013, accessed February 19, 2014
  32. Governor's Energy Office, 2010 Colorado Utilities Report, "August 2010," accessed February 21, 2014
  33. Governor's Energy Office, 2010 Colorado Utilities Report, "August 2010," accessed February 21, 2014
  34. Governor's Energy Office, 2010 Colorado Utilities Report, "August 2010," accessed February 21, 2014
  35. Database of State Incentives for Renewables and Efficiency, Colorado: Direct Lending Revolving Loan Program, November 13, 2012, accessed February 22, 2014
  36. Governor's Energy Office, 2010 Colorado Utilities Report, "August 2010," accessed February 21, 2014
  37. Governor's Energy Office, 2010 Colorado Utilities Report, "August 2010," accessed February 21, 2014
  38. Database of State Incentives for Renewables and Efficiency, Colorado: Local Option - Sales and Use Tax Exemption for Renewable Energy Systems, May 17, 2013, accessed February 22, 2014
  39. Colorado Legislative Council, Committees of Reference, accessed February 22, 2014
  40. Colorado Energy Office, About Us, accessed February 22, 2014
  41. Department of Regulatory Agencies (DORA), Mission and History, accessed February 22, 2014
  42. Colorado Department of Natural Resources, " Homepage," accessed July 5, 2013
  43. Colorado Renewable Energy Society, About Us, accessed February 22, 2014
  44. Colorado Solar Energy Industries Association, About Us, accessed February 22, 2014
  45. Community for Sustainable Energy, Welcome, accessed February 22, 2014
  46. Conservation Colorado, Mission Statement, accessed February 22, 2014
  47. Pipeline Association for Public Awareness, Colorado Pipelines Association, accessed March 10, 2014