The legislature of the State of Colorado has been very active on renewable energy issues over the last few weeks.  Three bills have been making steady progress through the House and Senate in Denver, each of which could have a noticeable effect on the renewable industries in the state.

I.   Coal-Mine Methane as a Renewable Energy Source

House Bill 1160 seeks to amend Colorado’s renewable energy standard to include electricity generated by burning captured coal-mine methane.  The legislation has passed in the House, and is now being considered by the Senate Local Government Committee.  The bill faces strong opposition by many environmental and renewable energy advocacy groups, including Western Resource Advocates (“WRA”), based in Boulder, Colorado.  In a March 23, 2012 guest commentary in the Denver Post, John Nielsen, the Energy Program Director at WRA stated as follows:

By allowing coal-mine methane to qualify as “renewable energy,” something it is not, HB 1160 would diminish further investments in Colorado’s wind and solar resources. Those resources are sustainable, emission-free, use little or no water, provide important health and economic development benefits, and reduce greenhouse gases.

II.   Prohibition on Severance of Wind Rights

House Bill 12-1105 seeks to establish a non-severable wind energy right in real property.  Essentially, under this proposal a landowner would not be able to sell fee simple title to the wind rights on his or her property, but must instead execute a lease, license, easement or other agreement to develop or participate in the income from or the development of a wind project on the property.  The legislation has passed in the House, and is now being considered by the Senate Local Government Committee.  This proposal law is in-line with a national trend against severance of wind and solar rights, and effectively prohibits a landowner from selling the wind or solar rights to a project developer while retaining the ownership of the underlying property.  Interestingly, however, this legislation seems to expressly contemplate and allow for the transfer of the rights to receive the income from the wind project to a third-party, which could potentially lead to many of the same down-stream ownership concerns that commonly give rise to severance restrictions in the first place.  K.K. DuVivier, professor of law at the University of Denver Sturm College of Law and author of the excellent resource “The Renewable Energy Reader,” was recently interviewed by Colorado Public Radio about this legislation.

III.   Ending PUC’s Authority Over Transmission Siting Issues

House Bill 12-1312 seeks to modify the Colorado Public Utilities Commission’s approval process for transmission line certificates of convenience and necessity, so that the PUC no longer has jurisdiction over the land use rights or siting issues related to the location or alignment of the proposed transmission lines.  Instead, those issues would be left to the discretion of the county and local governments.  Ms. Becky Quintana, a representative of the PUC, recently testified before the House Committee on Transportation about this legislation and stated that the PUC neither supported nor opposed the legislation.  From the PUC’s perspective, the legislation does not restrict the authority of the PUC, but rather more clearly defines the jurisdiction of the PUC and local governments, though she noted that, under the proposal, any transmission project that spanned multiple counties would require inter-governmental agreements as each county’s jurisdiction would end at the county line.

Do you have any questions or comments about any of these bills or about developing renewable energy projects inColorado?  If so, leave a comment below or contact me directly at lhagedorn@polsinelli.com.

As this blog has noted numerous times, it isn’t always easy to get a solar or wind project constructed.  In fact, as we’ve discussed before, often one of the most expensive impediments to a project’s development is the local and state permitting process.  The Colorado Solar Energy Industries Association (COSEIA) puts a number on this expense, stating that permitting costs can add about $2,516 per U.S. residential installation and can easily exceed $100,000+ for large scale installations.

As it turns out, the state of Colorado has been, until recently, one of the worst offenders when it comes to tacking on substantial state and local permitting fees to renewable energy projects.  The Vote Solar Initiative and the COSEIA recently teamed up to collect and evaluate information about the current state of permitting in 34 local jurisdictions throughout Colorado.  The resulting study, which was recently released by the two groups, indicated that the average fee for obtaining the necessary local permits in Colorado for a solar project is nearly twice as high, and the approval process can take up to seven times as long, as the national permitting best practices.  The groups point to this result as reinforcing the need for Colorado to adopt a more standardized, streamlined solar permitting practices.

However, there is hope in sight.  Shortly after the study was released, the Colorado State Senate approved legislation that seeks to prevent the state and local governments from charging excessive permit fees and plan review fees to customers installing solar technologies.  The Legislation, entitled the Fair Permit Act (H.B.1199), was sponsored by Rep. Bob Gardner, Sen. Bob Bacon, and Sen. Shawn Mitchell to address these high permit costs and inefficiency.  The legislation now only needs the signature of Colorado Governor John Hickenlooper to become law.

Specifically, the Act improves transparency in the permit process by requiring the government agency to clearly and individually identify all solar fees and taxes assessed on an invoice, and limits solar permit fees to the government’s actual costs in issuing the permit, not to exceed $500 for a residential installation or $1,000 for a commercial system.

If you have any anecdotes about permitting renewable energy projects in Colorado, or if you’d like more information about permitting projects in general, leave a comment or send me an email at lhagedorn@polsinelli.com.