Study reviews state's energy future = Result: We need new sources, transmission lines

Colorado will need to develop 4,900 megawatts of new electricity sources and hundreds of miles of new high-voltage transmission lines in the next 20 years to avoid costly energy shortages, such as those that have plagued California and the East Coast in recent years, according to a study released Thursday.

The Colorado Energy Forum, a nonprofit education and research organization, released the detailed analysis in hopes of sparking discussion among utilities, legislators, regulatory officials and the general public.

Such a comprehensive and unbiased analysis of Colorado's energy future has not been conducted for more than a decade, according to CEF Executive Director Bruce Smith.

"The system is working fine right now," Smith said. "We're not saying, 'The sky is falling.' But 4,900 megawatts of capacity is a big number that will take years and cost billions of dollars to construct."

Transmission lines alone take five to seven years to complete, including permitting, site approval and construction.

"Twenty years sounds like a lot of time, but the last coal-fired plant to come on line in Colorado was in 1983," Smith said. These plants take years to plan and build. The discussion needs to happen and will happen. We're saying it should happen sooner rather than later."

The group's report, "Colorado's Electricity Future," represents a cooperative effort between R.W. Beck Inc., Schmitz Consulting, LLC and the Colorado School of Mines. The study provides an in-depth look at Colorado's total need for electricity supply and transmission over the next 20 years.

Among its findings and recommendations:

# The state will need to produce an additional 4,900 megawatts of new power sources by 2025 - either by building new baseload plants, decreasing demand through conservation measures or a combination of both - in order to meet expected growth and avoid energy shortages.

# Hundreds of miles of transmission lines will need to be built to connect generation to consumers - including both fossil-fueled plants and renewable facilities - and to improve the overall reliability of the region's power-delivery network.

# Numerous obstacles exist to building both generation and transmission facilities.

Colorado's Electricity Future consists of three separate reports. In the first report, entitled Colorado Power Market Study, R.W. Beck determined the state's future needs.

The second report, Economic Impacts to Colorado from Higher Electricity Prices, was completed by former Colorado Public Utilities Commission chief energy economist Gary Schmitz.

Schmitz found that increasing electricity prices are making the Colorado economy less competitive, reducing the future growth of its employment base and, as a result, its income.

According to Schmitz's analysis, making wrong decisions, or postponing decisions, can have enormous economic consequences. Schmitz also found that if utilities are able to meet the forecasted demand, at lower costs through good planning, the negative economic impacts may be reduced or avoided.

The Colorado School of Mines completed the third and final section of the report, entitled Economic and Reliability Impacts to Colorado from Outages.

The School of Mines found that negative impacts of an inadequate and unreliable electric supply include loss of jobs and inability to attract new business. It concluded that without a long-term strategic plan for affordable and reliable energy, the state could face a significant negative economic impact.

Only three power plants are currently in the works to help meet Colorado's growing power demand. Pueblo's 750-megawatt, $1.3 billion Comanche III plant will come on line within three years. Tri-state Generation and Transmission is constructing a plant in Springville, N.M., that is expected to come online soon. A second Tri-state plant, in Garden City, Kan., is expected to be completed in 2012. Both Tri-state plants will supply power to Colorado.

Smith said the three plants represent a fraction of Colorado's total future power needs and serve to illustrate the expanse of time needed to plan for and construct large power plants.

"We're advocating dealing with this in time to make good choices," said Smith. "If you don't do it in time, you may be forced to makes decisions you don't want to make."

Smith said he doesn't expect the study's findings to generate controversy. Rather, the controversy will stem from discussions on how the state will meet the demand, and whether that is done through coal, wind, solar or natural gas.

"All of these sources become part of the controversial decision of how we will meet the 4,900-megawatt demand. There's a broad difference of opinion on how to meet that."

Colorado Amendment 37, passed by voters last year, requires that Xcel and other large utilities receive 10 percent of their energy from renewable sources.

The Colorado Energy Forum was formed in 2005 to educate Colorado residents about the need for increased investment in Colorado's energy infrastructure. The organization receives funding from utility companies.

Visit www.coloradoenergyforum.org for more information.

ThomasJohnson@coloradoan.com