Archive for January, 2012

Colorado PUC Denies Xcel Request for Interim Rate Hike

Thursday, January 12th, 2012

The Colorado Public Utilities Commission (PUC) has denied Xcel Energy Inc.’s request for a $100 million interim electricity-rate hike while regulators review the utility’s request for a $141.9 million increase.  The requested increase, if approved, would raise the average residential monthly electric bill by about 6 percent.

Last November Xcel requested a $141.9 million increase, to be effective starting Dec. 23rd.  But since it could be this coming summer before the PUC reaches Solar Dollarsa decision on the request, Xcel asked for the interim hike.  The PUC rejected that request this past Wednesday, saying the company failed to show it would be adversely impacted by maintaining current rates while the commission reviews the $141.9 million request.

Xcel spokesman Mark Stutz says Xcel officials are disappointed because they feel “regulatory lag” is a growing concern, but they’re looking forward to deliberations on the full request.

Arise Energy Solutions Perspective:

“This is great news for Colorado residents living in Xcel’s service area,” said Jim Bartlett, Arise Energy co-founder and CEO.  “After the sizable rate increases we experienced just 18 months ago, this interim increase seems particularly onerous – thus we were very pleased to see the PUC’s ruling against Xcel in this case.”

“Although we’ve received good news for the time being, it’s very likely that Xcel will receive approval for a sizable portion of the requested rate increase later this year following the PUC’s full review of the request,” said Bartlett.  “This should reinforce the importance of making greater investments in renewable energy solutions — and sooner rather than later.  As electric utility rates go up, our solar energy clients see a corresponding increase in the return-on-investment (ROI) from their systems.  That means faster paybacks, and thus a more compelling reason for investing in solar energy now.”

For more information on how a solar energy system can lock in energy rates, save money, and reduce carbon footprints, contact Arise Energy Systems for a free consultation and site assessment.   Call 720-468-3225 or email jbartlett@AriseEnergy.com.

COSEIA Obtains $491k Grant to Fast-Path Solar Installations

Sunday, January 8th, 2012

Last month, a Colorado Solar Energy Industries Association (COSEIA) team received $491,000 in Federal grant funds to develop a system that will cut red tape and cost for solar panel installations.

“Every municipality has been going about trying to set standards in a piecemeal fashion and that has added to cost,” said Neal Lurie, executive director of the Colorado Solar Energy Industries Association.

Non-hardware costs, such as permitting, installation, design and maintenance account for up to 40 percent of the total cost of installed rooftop system, Permitting processaccording to the US Dept. of Energy, which awarded the grant.

A report released last year estimates that local permitting and inspection costs add roughly $2,500 to the average residential solar installation, nation-wide.

The average residential solar installation is now between $12,000 and $18,000 and half the costs are currently for permitting, regulatory, interconnection, customer acquisition, installation, and other similar charges, Lurie said.

The COSEIA team will work with municipalities to develop consistent lists of best practices, on-line tools and other standards, with the goal of cutting application costs by 25 percent, Lurie said.

“The Energy Department is investing in this Colorado project to unleash the community’s solar potential by making it faster, easier, and cheaper to finance and deploy solar power,” Energy Secretary Steven Chu said in a statement.

The Colorado Solar Energy Industries Association team also includes: the Rocky Mountain Institute, the City of Denver, Boulder County, the city of Fort Collins, the city of Golden, and the American Solar Energy Society.

“We’re proud of the work that COSEIA is doing and the leadership our state’s solar industry organization is providing in this area to help cut red-tape and reduce administrative, permitting and inspection costs associated with the installation of solar energy systems here in Colorado,” said Arise Energy Solutions co-founder and CEO Jim Bartlett.  “Through our experience installing systems in a number of counties and municipalities across this part of Colorado,  we’ve experienced a vast range in terms of the application and permitting requirements placed on renewable-energy contractors, and it doesn’t need to be that way.”

Bartlett reiterated that all of the unique application processes used by various jurisdictions just add unnecessary time and cost to the application, permitting and inspection process, and that these costs ultimately are passed on to the system owner.

“Every additional dollar spent on aspects of the system that don’t have anything to do with actually generating electric energy, (such as application, permitting and inspection costs) just extends the time required to reach the “break-even” point for a solar solution,” said Bartlett.   “Therefore, anything we can do to streamline the process and make it more “standardized” across all jurisdictions will help lower the total cost of all systems, allowing for more rapid pay-back of renewable-energy system investments, and thus provide a more compelling financial scenario for prospective system owners.”

Arise Energy Solutions, LLC is an active member of COSEIA, and designs, integrates and installs solar energy solutions for clients in the greater Denver metro area.  Over the last two years Arise has worked to document some of the unique aspects of the paperwork and application processes used by the dozens of individual municipalities and counties when those jurisdictions are evaluating, permitting, inspecting and approving solar energy solutions.

Why Will the Cost of Electric Power Continue to Escalate?

Thursday, January 5th, 2012

We often get asked to share our views on why electric energy rates will go up, how fast, and why. The biggest reasons we believe the rates we pay for electric power will continue to go up are related to coal, because most of the electricity used in the US comes from coal fired plants. For as far back as anyone alive can remember, coal has been the dominant source of electric power provided here in the US.  In some places (such as Colorado, up until fairly recently) coal provides as much as 90% of electric power consumed. In other parts of our country coal may only account for 40-50% of electric power production today, but across the country the cost and availability of coal are still tremendous factors in the cost of electric power. Coal Fired Plant

Here in Colorado, Xcel Energy (the dominant electric utility) has developed and begun executing a plan to migrate almost all of its plants from coal to natural gas, with this migration expected to be complete by 2014.  The migration involves closing some coal-fired plants, re-tooling and converting some coal-fired plants so they can burn natural gas instead, and building new natural-gas-fired plants to replace the capacity lost through closure of older coal-based plants.  All of this is a smart strategy… and in rolling it out here in Colorado, Xcel has put our state in a good position.  Not only will the switch to natural gas be beneficial in terms of air quality, it will also prepare us to avoid the brunt of coal shortages that may be expected within the next 20 years.

Using natural gas as the fuel to generate our electric power is a good change. However, it will translate into higher costs for electric power because:

  • The capital investments being made to convert to natural gas are substantial, and Xcel Energy is seeking to have those investments paid back through increased rates. These rate increase requests have already been submitted to the PUC.
  • As we begin to use natural gas to generate electric power, doing so will drive up our rates further, because using natural gas is more expensive than using coal, per unit energy produced. Once again, the increased costs will naturally be passed along to rate payers by the utilities.

Coal resources in this country are now thought to be more like 40 years, instead of the 200+ years we’ve been told repeatedly in the past.  Part of the reason electric power has been so inexpensive here in Colorado (compared with many other parts of the country), is that the largest source of coal in the US is Wyoming, and the cost of transporting that coal to plants in Colorado is very modest given the distance involved.  This can be expected to change as we shift to burning natural gas that’s piped in from much further away.

For an interesting view on the larger issue our country faces as we approach the end of of our coal resources, check out this video interview with Leslie Glustrom, Director of Research and Policy at Clean Energy Action (CEA).   Although the interview is from 2009, the message is still very relevant today.   A report available from CEA includes a detailed analysis of the coal situation in the US.

At Arise Energy, we are passionate about the need for greater investment in renewable energy, and particularly in solar energy in areas where that resource is so abundant, as it is here in Colorado.   We continue to work with the governor’s energy office, COSEIA, and other industry leaders to drive for increased investment in solar energy here in our state, and for the required financing and incentives to make solar energy affordable for more Colorado businesses and homeowners.