February 18, 2011
The Honorable State Senators
State Capitol Building
200 E. Colfax Ave.
Denver, CO 80203
RE: HB 1228 – Economic Development Through Distributed Generation
Dear Senator:
Colorado Republican Business Coalition opposes HB 1228.
This bill will lead to legislation that will require utilities to buy electricity generated from private concerns at much higher rates than the utilities’ cost to generate power.
Utilities currently spend approximately 6.5 cents per Kwh to generate electricity. Solar power costs anywhere from 12 to 30 cents per Kwh. Wind energy cost between 3 and 5 cent per Kwh, depending on wind speed and assuming a federal Production Tax Credit.
When utilities are forced to pay these costs plus a profit to any willing producer, there will likely be a flood of willing producers, enticed by the promise of a guaranteed profit. This occurred in Spain1, and resulted in bankrupting Spain’s burgeoning solar power industry and jobs losses.
As more wind and solar power comes on line, utilities will be forced to build more natural gas generation, to stabilize electric supply when the wind isn’t blowing and the sun isn’t shining. Forcing utilities to pay more for power generation, and then forcing them to build more capacity must result in significantly higher rates.
“Xcel’s investment in wind energy has the potential to be profitable, but the large investment costs–85% of the cost of wind power production is installation–will need to be mitigated by a hike in utility prices.”2
Colorado businesses and individuals can ill-afford the current upward pressure on utility rates, let alone the escalation this mandate will cause. Spending more than necessary for electricity will deter economic recovery and create more unemployment.
Government mandates that result in unnecessarily higher electric bills is a recipe for economic disaster. We urge you to oppose HB 1228.
Respectfully,
Christine Burtt, Chairman
Brian Vande Krol, Member, Legislative Issues Committee.
cc: Board of CRBC
Membership of CRBC