A bipartisan bill requiring all Colorado transmission utilities to join an organized wholesale market by 2030 cleared the Colorado legislature last Thursday, drawing praise from both advocates and utilities.
Senate Bill 72 will also create an independent Colorado electric transmission authority to establish intrastate electric transmission corridors and to operate transmission and storage facilities as needed to enable Colorado utilities to physically participate regional markets.
The bill's passage is not only an indicator of the growing interest of Western states in regional power markets, but could also put pressure on other states to create similar policies, according to Emilie Olson, policy principal at Advanced Energy Economy.
Colorado's transmission utilities will, if the governor signs the measure, have about 8.5 years to consider which regional wholesale power market they would like to join — and they may not be the only Western utilities to make such a decision in the near future, according to Olson.
States such as Oregon, Washington, Idaho and Montana have all been talking about regional transmission for some time, Olson said. New Mexico has opened a regulatory proceeding to discuss grid modernization, including regional transmission, and both Utah and Colorado have pursued studies considering the impact of joining regional transmission systems, with a 2009 study by the Colorado Governor’s Energy Office pointed to regional interconnection as an option for accelerating renewable energy development.
In combination with similar legislation passed last week in Nevada, Olson said, Colorado could be "putting a finger on the scale" to push additional states toward joining regional energy markets.
Neither of Colorado's two investor-owned utilities currently participates in an RTO, although both have expressed interest and "dipped a foot in" by experimenting with real-time power markets associated with the California Independent System Operator and the Southwest Power Pool, Olson said. Advanced Energy Economy supported SB 72 not to push Colorado utilities toward regionalization, she said, but rather to accelerate the process and give the state's utilities a "clear, uniform goalpost."
"For Colorado specifically, we can definitely see it having a huge impact in terms of supercharging the kind of infrastructure projects the state has long needed to aggressively build out clean energy," Olson said, "and do so in a way that creates economic development."
In a statement to Utility Dive, Xcel Energy indicated it appreciated the bill and its sponsor for creating "a robust framework for evaluating market options we believe we can work with to help us determine the best future for our customers in delivering clean, reliable and affordable energy."
Further legislation in other states regarding grid regionalization, Olson said, is likely inevitable. The real question now, she said, is which states take early action, potentially reaping economic benefits by drawing more renewable energy to their states, and which lag behind.
"I think a lot of legislators see the writing on the wall between declining costs for advanced energy technologies, companies eyeing the best states to invest in, and with COVID there's the question of what a durable, resilient economy looks like," Olson said. "Being a laggard does potentially put your state at risk of missing the broader opportunity."