Why Colorado could be a model for decarbonization

by Allen Best

Big Pivots

Colorado still has a carbon-heavy economy as of 2021, but with a legislative mandate to achieve deep reductions by 2030. Will the state be an exemplar for that decarbonization?

Eric Blank, the chairman of the Colorado Public Utilities Commission as of January, made the case that Colorado can be that national model, at least among interior states. One reason is its size.

“The fact that it’s a small pond,” he said at an event sponsored by the Getches-Wilkinson Center for Natural Resources, Energy and the Environment at the University of Colorado-Boulder. He went on to talk about mathematical game theory, the frequent switching in a small group that creates a “very large motivation to work together well.”

Going back to the 1990s, he said, those working in energy in Colorado were “really collegial and worked together.” Imagine instead working in real estate development in New York City and “never having to work with the same person twice.” The actions in that case would be very difficult. In Colorado, you can’t get away with being a bad actor. “I think it’s a strength.”

An Ivy League-trained lawyer, Blank’s first posting in Colorado was with Western Resource Advocates before he went into the private sector, first as a wind developer and then as a solar developer.

“We really have a chance to be a role model for the rest of the country,” he said. “This doesn’t need to be some red vs. blue tribal warfare, like everything at the national level,” he said. “We have an opportunity to do it smart, do it fair, do in a different way that is a model for everybody.”

Eric Blank

The PUC primarily regulates investor-owned utilities, both gas and electric, but also the generation of wholesale electric provider Tri-State Generation & Transmission. In that capacity, it is overseeing a giant component of Colorado’s decarbonization strategy, which is to largely decarbonize electricity by 2030 and then apply electricity to replace fossil fuels in other components of the economy.

For example, the PUC has overseen the transportation electrification plan of Xcel Energy, and it is now doing so for Black Hills Energy. Both were required by a 2019 state law.

To a lesser extent, the PUC has some oversight about natural gas and propane use in buildings. That role could expand, depending upon legislation that may emerge from the Legislature this session.

Decarbonization of electrification is proving relatively fast and easy because, said Blank, renewables have become cheaper than coal, in particular.

“As a general rule, the economics of wind, solar and storage are now cheaper than operating costs of many of the coal plants,” he said. “There are opportunities to cost-effectively move forward that generally work for customers. Our challenges tend to be more how to protect communities that have been disproportionately impacted by (the transition) that is equitable, just and fair.”

Also working to Colorado’s advantage, said Blank, is a “really robust and integrated stakeholder group that is interested in our processes and our work and creates a real richness and diversity in thinking. It’s a real strength.”

This is from Big Pivots, an e-magazine tracking the energy and water transitions in Colorado and beyond. Subscribe at bigpivots.com

And there’s a critical mass. “It’s just a nice place to build and grow.”

Not least, Colorado has relatively rich renewable resources. It ranks not at the top for either wind or solar, but “depending upon how you define it, the top 10 or 15 among the states.” And, it’s not just one resource. “The combination is very compelling.”

At the outset. Blank talked about Colorado’s weaknesses. He mentioned the size of state agencies, dwarfed by those in California. And then there’s Colorado’s location in the electrical grid, in the Western interconnection but on the edge of the Eastern interconnection, which acts something like a wall. And there are not good connections north and south. As such, Colorado is something of an island.

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