Colorado Springs Utilities recently became Western's first municipal firm power customer to participate in a group purchase of renewable energy credits. Western's Rocky Mountain region coordinated the purchase of almost 1.7 million MWh over a five-year period for the city-owned utility and five Federal agencies.

The purchase for the Federal agencies was under Western's Renewable Resources for Federal Agencies program. Western also purchases RECs for other firm power customers that request the service, as Colorado Springs did.

State standard inspires utility purchase

Colorado Springs' portion of the purchase amounts to more than 1.5 million MWh over the five-year period. The RECs will help the city in its voluntary compliance with the state's voter-approved renewable portfolio standard. "Amendment 37 does not apply to municipal utilities, but Colorado Springs chose to participate because of the many benefits renewable energy offers," noted Peggy Plate, Rocky Mountain Regional Energy Services representative. "Western is pleased to provide a service that helps our customers create diversified resource portfolios. It is part of Western's strategic plan to encourage the voluntary use of renewable energy and energy efficiency measures," she added.

"Colorado Springs could have issued its own request for proposals, but Western's purchasing experience made the process much more efficient," explained Principal Engineer Jean Mueller. "Also, being part of a group purchase offered more potential for cost savings."

The city plans to pursue more cost-effective renewables, she said, adding that purchasing RECs helps to encourage future renewable development. "Purchasing RECs is the most cost-effective option right now.  It is the right thing to do for Springs Utilities, our customers and the environment," Mueller pointed out.

Community Energy, a third-party marketer, will supply certificates from wind energy and other resources generated in California, Kansas and Nebraska. Wind sites in Colorado may supply additional RECs in the future.

"Colorado Springs has taken a leadership position in the Renewable Energy market with this large five-year purchase," said Community Energy, Inc. Executive Vice President Brent Alderfer.  "This purchase is one of the largest single REC buys in the U.S., and will give an impressive boost to new wind project development in the West."

Federal purchases support many projects

The Federal purchases account for up to 235,605 MWhs of RECs over five years.  Counting toward compliance with Section 203 of the Energy Policy Act of 2005, these purchases move the agencies toward Federal renewable energy goals. The agencies include:

• Environmental Protection Agency, Denver – 7,000 MWh

• Fort Lewis, Wash. – 209,455 MWh

• NASA - Ames Research Center, Calif. – 12,300 MWh

• NASA – Eastside Airfield, Calif. – 4,100 MWh

• U.S. Forest Service, Rocky Mountain Region – 2,750 MWh

Another third-party marketer, 3 Phases Energy is supplying the certificates for the agencies. The certificates for wind, biomass and geothermal energy will come from sites such as The Geysers geothermal powerplant and the HighWinds wind farm, both in California. Projects providing generation for the RECs may be located in California, Colorado, Kansas, Nebraska, Oregon and South Dakota. "The flexibility to pick and choose facilities according to availability allows 3 Phases to offer a more competitive price on RECs," said 3 Phases Partnership Director Steve McDougal.

3 Phases Energy also provided RECs for a purchase Western coordinated for the EPA in 2004. "When agencies like Western make large-scale purchases, 3 Phases is able to make long-term purchasing commitments to renewable energy developers," said McDougal. "That confidence helps to improve the profitability of renewable generation."

Program meets two goals

Western and DOE's Federal Energy Management Program launched Renewable Resources for Federal Agencies in 2002 to help Federal facilities meet renewable energy goals. The program offers two products—renewable energy delivered to the customer and renewable energy credits, the choice of the agencies participating in this purchase.

Renewable energy certificates, also known as green tags, are the intangible environmental benefits associated with generating one MWh of electric energy by a renewable resource. Because RECs don't require energy to be physically delivered to the buyer, they are the simplest way for customers to support renewable energy. "Certificates are a good option for utilities working toward meeting renewable portfolio standard requirements," commented Program Manager Theresa Williams.

The growth of state and locally-adopted standards is one of the reasons Western decided to extend the service to requesting firm power customers, she added. "The two goals of the program are to help Federal agencies meet their requirements and to promote renewable energy development," explained Williams. "Making renewable energy purchases easier and more cost-effective for our customers supports the second goal. It's a great value-added customer service."