On November 15, Moye White welcomed Governor Ritter to its offices to address a group of business professionals from a variety of industries including transportation, real estate, banking, and energy. Ritter spoke about the major changes occurring in the energy landscape, including those related to utilities, transportation, politics, and finance.
Ritter began the evening by highlighting the leadership role undertaken by major utilities, including Xcel Energy, in incorporating renewable energy sources into their portfolios. In 2016, Xcel announced a Renewable Energy Plan, committing itself to secure at least 30% of its energy needs from renewable sources by 2020. After their announcement, skeptics replied that such a target was impossible, and even if it was achievable, it would be too expensive. Today, Xcel is close to hitting its goal of 30% renewables, and consumer bills have decreased by 9% over the last four years. Another factor driving the rise of renewable energy is the decrease in storage prices by 50% over the last two years. Despite its success, Xcel may not be done transforming the landscape just yet. Ritter expects Xcel to maintain its position as a leader in the transition to a cleaner energy future, with more bold moves to come.
Ritter also commented on major political changes, including the state government “trifecta” victories (governorships and both legislative chambers) won by Democrats in Colorado and other Western states. While Ritter lamented the politicization of energy-related issues, he is hopeful that progress on renewable energy and environmental initiatives can be made in this new political setting. While Colorado’s Governor’s Mansion remains in Democratic hands, he predicts that the party’s full control of state government will have a progressive impact on future legislation related to clean energy. Additionally, seven other states have recently elected governors from both parties who discussed the importance of clean energy during their campaign. While the federal government remains hostile to new and existing policies encouraging clean energy development, Ritter noted how the outgoing Republican Governors of Illinois and Nevada moved the clean energy revolution forward in their states. He believes that if all sides come together, we can de-politicize the argument, make greater strides towards clean energy transformation in America, and focus on the financial and economic impact it can make in local markets.
The transition to a clean energy future requires more than just advances in technology, and the governor was sure to point out the financial and economic pressures facing the industry in both the development of new technologies as well as the conundrum of stranded coal assets. While minor policy changes at legislative or executive levels can help spur the development of self-sustaining renewable energy markets in most states, stranded assets pose a real threat to utilities and communities that have invested heavily in carbon-based energy sources. New ideas are needed, such as the utilization of the securitization bond markets to address these fiscal issues. These transactions utilize low-interest, AAA rated bonds to recover costs related to coal plant decommissioning. This can help spread closing costs over an extended period while generating revenue in the present that can be used to pass savings on to utility customers, help impacted communities and laid-off workers, and keep utilities operating efficiently, allowing them to invest more in renewable generation. Legislation allowing for these securitization transactions has been approved in several states.
Finally, Ritter touched upon the importance of our transition to the use of clean energy in transportation. In 2012, emissions from transportation eclipsed the power generation sector for the first time since the 1970s. Obama era policies were aimed to reduce vehicle emissions by imposing fuel economy standards of 56 mpg by 2026. While the current administration has made steps to wind back these policies, states and manufacturers are maintaining momentum, including Colorado’s recent adoption of California’s low emissions vehicle standard. The price reduction of electric vehicle batteries is also having a major impact on the transportation industry, increasing the feasibility of large fleets converting from diesel to battery-operated trucks. Encouraging news abounds, including, one of the biggest players in the trucking industry planning to install batteries across its entire 18-wheeler fleet by 2035.
While there is still progress to be made, the environment is rapidly changing. Colorado is at the forefront of these changes, and is making a concerted effort to move towards a clean energy future. In the end, these energy advancements will be a benefit to the economy, the energy sector, and public health.