HomeMy WebLinkAboutresolution.council.038A-11 RESOLUTION # Si3A
(Series of 2011)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, IN
SUPPORT OF THE COMMUNITY OFFICE OF RESOURCE EFFICIENCY'S REPORT
"PRIORITIZING CLEAN ENERGY AND ENERGY COSNERVATION IN COLORADO'S
ECONOMIC DEVELOPMENT STRATEGY."
WHEREAS, the Governor's Office and Colorado Office of Economic Development and
International Trade has requested input from residents and communities for Colorado's Bottom -
up Economic Development Plan; and
WHEREAS, the Community Office for Resource Efficiency has published a report
emphasizing the important roles of energy conservation, clean energy, transportation
improvements and community planning in stimulating local and statewide economic
development; and
WHEREAS, the ideas in the attached report are aligned with the City of Aspen's
commitment to clean energy, energy conservation, economic development and livable
communities; and
WHEREAS, a statewide strategy for economic development which includes investment
in and support for clean energy and energy conservation will benefit Aspen and the state's efforts
to create lasting jobs and reduce greenhouse gases;
NOW, THEREFORE, BE IT RESOLVED THAT THE ASPEN CITY COUNCIL supports the
attached report, "Prioritizing Clean Energy and Energy Conservation in Colorado's Economic
Development Strategy ", produced by the Community Office for Resource Efficiency. The Aspen
City Council urges Governor Hickenlooper and the Colorado State Legislature to consider its
recommendations as the statewide economic development plan is created.
Dated: - /1 17
Michael . I land, Mayor
-AA- .
6 - ,
I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true
and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado,
at a meeting held June 13, 2011.
2_A /. 1/
Kathryn S. K./ , City Clerk
PRIO TIZIN • Clean Energy and Energy Conservation in
Co orado's Economic Development Strategy
•
DODD
``a OODD OO
■ oo DDDO �0
GI ED
OOD 0000 OO
ER 833 1:1
® ® ® ® DOO OOOD OO
CO CD CD
C.RE
c.......ier ewi<. .. ■..o..<. am<i.. <r EnergySmart
CORE Energy Smart Resource Center CORE
215 N. Garmisch St 111 ABC, Suite M 520 S Third St
Aspen, CO 81611 Aspen, CO 81612 Carbondale, CO 81623
WWW.ASPENCORE.ORG
Prioritizing Clean Energy and Energy Conservation in
Colorado's Economic Development Strategy
5/11/2011
To Governor Hickenlooper and Staff,
We are writing in regard to your Bottom Up Economic Development Initiative. CORE's Board,
staff and partners have attended a number of county and regional meetings, and we found them
productive and thoughtful. Thank you for creatively addressing Colorado's economic needs.
However, due to the size and scope of this effort, we found it necessary to submit a
recommendation that specifically addresses economic growth through the support of efficient
and clean uses of energy. This report is divided into five concise sections: energy efficiency
and conservation, clean energy, transportation, fossil fuels, and market synergy. Significant
economic potential exists in each of these areas.
Your predecessor, Governor Ritter, and thousands of students, CEOs, elected officials and
activists around the state have made Colorado a leader in innovative energy investment.
Moreover, Colorado is blessed with a bounty of solar access and wind potential, universities,
laboratories, investors, and utilities equipped to capitalize on new opportunities. The
recommendations discussed in this report create financial growth and savings potential for a
broad spectrum of Coloradans.
Instituting progressive policy measures in support of clean energy and efficiency has a litany
of domestic and international success stories. Germany's electricity Feed -In Law supporting
clean energy has created a job sector that now outnumbers their famous automobile industry.
Since 2009, a similar effort in Ontario, Canada has created over 20,000 jobs. In Colorado, the
Governor's Energy Office, the Office of Economic Development and International Trade and
stakeholders around the state have brought clean tech companies to Colorado: between 2008
and 2010 the state added an estimated 4,500 new jobs in the clean energy economy.
Investing in efficiency, renewables, and community -based transportation initiatives retains
more money in the local economy, hedges against rising energy costs and fosters greater
economic competitiveness for Colorado businesses. Combined, these efforts help establish
Colorado as an international hub for clean energy technologies and innovation.
We, and the forthcoming list of signatories, urge you to consider each of the recommendations
addressed. We look forward to your continued leadership in pursuing timely state legislation
that supports clean energy, resource conservation and environmental protection.
Best regards,
Nathan Ratl ge
Executive Director
Community Office for Resource Efficiency
CC: All State Senate and House Representatives
0000
0000' CIO
000 0000 Oa
® o00 0000 MCI
• ® • 1 03 03 oz) 833 03 _ m _
ENERGY EFFICIENCY AND CONSERVATION
"Energy efficiency is not just the low hanging fruit; it's the fruit laying on the
ground. " —US Secretary of Energy Stephen Chu
What's the Issue?
According to a recent study published by McKinsey, the United States could reduce energy
consumption by over 20% by 2020, a reduction that would lead to $1.2 trillion in savings.
A national energy efficiency campaign would be a boon for the economy — putting people
back to work completing upgrades, saving property owners cash on their utility bills, and
stimulating innovation and industry to do more with less. Dollars not spent on energy costs
are dollars spent improving our communities, schools, neighborhoods and businesses.
:::: What's happening now?
qv Boulder County was one of the first jurisdictions in the country to establish a Property Assessed
Clean Energy (PACE) program. In its first two rounds in 2009, the County used its bonding
authority to push over $9M in funding for home energy improvement loans. This funding
went directly into the local economy, stimulating jobs and sustaining businesses during tough
economic times. Every dollar loaned through PACE generated at least an additional $0.53 in
economic activity in Boulder County.
The Department of Energy (DOE) and the Governor's Energy Office (GEO) have invested
millions in projects around the state to support similar efficiency efforts. Two cluster areas in
Colorado — Boulder, Denver and Garfield County and Eagle, Gunnison and Pitkin Counties —
are participating in the DOE's Better Buildings Program. Better Buildings has provided 3 -year
funding and technical support for communities to establish comprehensive retrofit programs.
The programs are meant to test various retrofit tactics, from grassroots marketing and
workforce development, to financing tools, data management systems, and utility partnerships.
Ultimately, the goal of these programs is to normalize efficiency improvements and transform
the residential retrofit market.
Progressive building codes have also mandated that energy efficiency become standard. For
example, Aspen /Pitkin established the Renewable Energy Mitigation Program (REMP) in 2000
to curtail excessive household energy consumption. (See highlight box for details.) REMP
has since been replicated in several jurisdictions around the state. The Governor's Energy
Office has also supported more progressive energy codes with grant funding, workshops, and
publications.
Legislative action, such as House Bill 07 -0137, has increased the uptake in efficiency programs
as well.? HB 07 -1037 requires that Investor -Owned Utilities (IOUs) provide efficiency programs
that are cost effective to their customers. Since all efficiency programs must pass a cost benefit
analysis, the mandate has allowed utilities to invest in efficiency improvements without hurting
their bottom line.
What are the opportunities?
Provide state and federal tax incentives for efficiency improvements. Between 2005 and
2010, the federal government allowed taxpayers to claim a 30% federal tax credit for efficiency
improvements such as increased insulation or new windows. The tax credit decreased to 10%
with a cap of $500 for 2011 and to date has not been extended past December 31st, 2011. The
state should lobby the federal government to continue the credit indefinitely, as it provides a
huge stimulus to the industry. The state should also examine developing a state tax incentive
program.
Enhance building energy codes. In 2007, HB -1146 required that all communities with a
building code adopt the 2003 International Energy Conservation Code (IECC). The state
should look into expanding this provision to communities not currently captured by the 2007
legislation. Energy codes stimulate the marketplace, creating demand for efficient products
2 and materials and a more educated workforce. Furthermore, the IECC published a new code
in 2009, which has been adopted in several communities around the state. The state should
continue educating communities about the 2009 Code and additional 'above code' training
activities, particularly in places that do not currently have a code in place.
REMP
The Renewable Energy Mitigation Program (REMP), established in 2000, is a component of the Aspen /Pitkin
County Building Code that establishes an interior and exterior energy budget for new construction projects. The
goal of the program is to encourage energy conservation and efficiency. However, excess consumption can be
mitigated through the installation of an onsite renewable energy system or an in -lieu fee. Since 2000, REMP has
reduced energy use, supported a thriving solar industry and raised over $9M. All of the revenue is redistributed
to the community via grants and rebate offerings. REMP has provided rebates to hundreds of solar installations
and leveraged millions of dollars in community -based efficiency upgrades. REMP has also served as a unique
outreach vehicle to keep citizens educated and engaged on energy and resource conservation issues. Similar
provisions have been established in Crested Butte, Basalt, Carbondale, Snowmass Village, Eagle County, Teton
County, WY and Martha's Vineyard, MA.
Encourage the real estate community to include efficiency improvements within the
Multiple Listing Service. Consumers need to see that investing in energy efficiency pays off on
the assessment of their home. The GEO should continue its work with Eco Brokers International,
IRES, Metrolist, USGBC - Colorado and realtor associations to establish a statewide standard
that ensures the MLS accounts for efficiency improvements. The GEO should also continue
to work with the Appraisal Foundation and the Appraisal Standards Board to establish clear
standards for reflecting the value associated with a home's energy use.
Extend Demand -Side Management (DSM) programs. The Public Utilities Commission (PUC)
requires IOUs to implement cost effective efficiency programs. However, rural cooperatives
and municipal utilities are currently exempt from this provision. State legislators should
examine efforts to extend these programs to all utilities in the state, potentially through a
public benefits charge (PBC) on utility bills or an efficiency provision placed on franchise fees.
(The provision would require a percentage of all franchise fees go to local efficiency programs.)
PBCs in 12 states generated $870 million in 2002/2003 and yielded nearly 2.8 million MWh in
savings. At an average $ 0.03 /kwh saved, PBCs are a much more cost - effective way to provide
energy than new generation.
Encourage Implementation of Energy Audit and Disclosure Ordinances. Several cities
have implemented a point of sale energy disclosure requirement with various mechanisms for
compliance, including incentives and fees. In 2009, Austin Energy passed an ordinance that
requires buildings over 10 years old to provide proof of an energy audit prior to the sale of the
property. By establishing a negotiating option at the point of sale that highlights efficiency
investments, the program has enabled the City of Austin to get closer to reaching its climate
action and energy conservation goals.
Financing Investments in Energy Efficiency
Coloradans need greater access to capital and affordable financing in order to invest in
energy efficiency. Unfortunately, the lending limits and underwriting criteria of conventional
loan products (i.e. home equity loans and lines of credit) leave many homeowners, landlords,
and businesses unable to access the capital needed to invest in upgrading their properties.
The irony of this situation, and perhaps the greatest justification for finding solutions to the
problem, is that financing efficiency improvements ultimately save the borrower money, thereby
improving their ability to service debt and strengthening our collective economic condition.
While the state and a handful of Colorado counties have taken measures to establish PACE
financing programs (authorized under HB 08 -1350 and expanded under SB 10 -100 and HB
10- 1328), objections at the federal level have put these programs on hold. This is regrettable.
Had property owners been given the ability to finance energy improvements on their property,
PACE could have provided a direct and leveraged cash infusion of tens of millions of dollars
into the economy, allowing property owners across the state to improve the efficiency of their
properties, while creating hundreds of new jobs, primarily in the construction trades. We
3 encourage the state to pursue every effort to revive PACE as soon as possible.
GREEN FINANCE UK
A new partnership between the UK's Carbon Trust (an independent non - profit established by the British
government) and Siemens Financial Services will provide nearly $900 million (USD) worth of financing over the
next three years, enabling UK businesses to invest in cost - effective energy efficient equipment upgrades, such
as lighting retrofits and biomass heating. All UK businesses are eligible to apply for financing as of April 2011.
Under an agreement signed between the two parties, Siemens Financial Services will provide the financial
backing and manage the provision of funding, while the Carbon Trust will use its expertise concerning carbon
savings from efficiency upgrades to assess the carbon, energy and cost savings of any proposed application.
This arrangement is designed to enable the financing to pay for itself through energy savings. The program is
expected to deliver lifetime energy cost savings of nearly $2 billion (USD) and over 6 million tons of carbon.
Several counties across the state are actively working to develop loan programs that benefit
from various types of credit enhancements. Partners include the GEO, the Colorado Housing
Finance Administration (CHFA), and the private banking industry. Loan products could include
a loan loss reserve or a rate buy -down fund, in order to extend more favorable terms and
qualifying criteria to borrowers interested in making energy improvements to their properties.
We encourage the state to continue to enhance and expand energy efficiency lending under
CHFA's Colorado Credit Reserve (CCR) and Green CCR.
Colorado's SB 08 -184 authorized the Colorado Clean Energy Finance Program and enabled the
state treasurer to invest up to $10 million per year (over three years) to provide below market -
rate loans to homeowners. With these loans, home improvements for energy efficiency and
renewable energy may be financed. The program is designed to be self- sustaining as it is
to be funded with securities payable from loan payments. The state treasurer and the GEO
should be encouraged to streamline their administrative planning efforts and roll this program
out immediately.
Finally, Energy Performance Contracting is a financing and implementation model that has
benefited greatly from contract oversight and facilitation provided through the GEO; however,
its use has been largely limited to public sector facilities. As a partnership model, we would
encourage expanding the use of this concept to commercial and multi - family residential
sectors.
4
CLEAN ENERGY
"According to the Union of Concerned Scientists, the generation of 20% of
electricity from renewable sources by 2020 will lead to the creation of 4,100 new
jobs; $331 million in income to farmers, ranchers, and rural landowners; an increase
of $2.5 billion in capital investment; $62 million in new local tax revenues; and, $1
billion in energy savings by 2030 —$200 for every (Colorado) state resident." 11
What's the issue?
Nationally, the clean energy sector is booming. From 2006 -2008, Colorado attracted more
f;t4h, t han $600M in venture capital funding for clean energy projects. In 2007 there were 2,639
jobs in clean energy in Colorado; by 2010 that number ballooned to over 7,000. Colorado
is one of the leading states for renewable energy development, ranking in the top ten for
resources, generation and jobs created. However, with the industry growing as rapidly as it is,
it's important that Colorado maintains its competitive advantage by supporting progressive
state policies that attract investment and jobs to the state.
What's happening now?
One of Colorado's best assets is its access to an established research network and highly trained
workforce. Federal institutions such as the National Renewable Energy Laboratory (NREL),
the National Institute of Standards and Technology, and the National Center for Atmospheric
Research have propelled Colorado's research capabilities to one of the top in the country.
Clean tech programs at the University of Colorado and Colorado State University have also
groomed a workforce ready to be the next leaders in the country. Colorado ranks 3rd in the
nation for engineers and 6th in the nation for computer specialists.
From transportation networks to proximity to major energy markets to good old- fashioned
wind and sunshine — Colorado has it all. The state is perfectly situated to provide materials
to wind developers (the top 13 windiest states are within 750 miles Moreover, Colorado
ranks high for actual renewable resources at 5th and 11th in solar and wind, respectively.
Several multinational companies have taken note and moved their operations to Colorado.
The world's leading wind turbine manufacturer, Vestas, opened its only plant in the United
States, in Colorado in 2007. Other global companies such as Abengoa, SMA Solar, and GE
Energy Controls have also established operations in Colorado.
Policymakers in Colorado have put the state at the forefront of renewable energy generation.
In 2004, voters supported a measure to establish a mandatory Renewable Portfolio Standard
(RPS) for utilities. Since then the mandate has grown from 10% to 30% of an IOU's portfolio,
making it one of the more aggressive mandates in the country. Policies such as this have
provided investors and businesses a signal that Colorado is open and ready for clean tech
business. Since 2005, Colorado's solar generation has grown one hundred -fold, from 1 MW in
2005 to 103 MW in 2010.
What are the opportunities?
Actively recruit clean energy companies. There are several reasons Vestas came to Colorado;
however, one oft -cited is Colorado's leadership on clean energy. At the time, Governor Ritter
was espousing the New Energy Economy in boardrooms, state capitols and conference rooms
around the country. Vestas listened, coming to Colorado despite better financial incentives
from other competing states. It is vital the state dedicate human resources to recruiting
'game changer' companies like Vestas, whose arrival precipitated the relocation of six of its
suppliers to Colorado.
Make regulatory environment more amenable. The Governor's Energy Office had a huge
success in 2010 working with the Federal Energy Regulatory Commission to set up a pilot fast
track process for small hydro projects. The GEO will help 20 projects through the pilot program
before starting work with FERC on an extended effort. Streamlining the regulatory process
is imperative to Colorado's success with renewable generation. Several in -state developers
have also acknowledged delayed transmission construction as a detriment to doing business in
Colorado. Working closely with FERC, the PUC, GEO and utilities, the State should establish a
5 more coherent and speedy regulatory process, which prevents the lengthy delay of projects.
FEED -IN LAW
A feed -in law enables the rapid absorption of renewable energy onto the electric grid through a long -term
agreement between renewable generators and electric utilities. Renewable generators are paid a premium
price for their power, which provides assurance to investors that there is a secure return on investment. Utilities
pass a modest increase on to their rate base in order to cover the increase cost in power. In Gainesville, FL, for
example, the feed -in law required an increase of just $0.43 per month to each customer. Similar programs in
Ontario, Canada, Spain and Germany have created tens of thousands of new jobs.
Given Colorado's superlative wind, solar, geothermal and biomass resources, it is well positioned to incentivize
additional renewables with this policy. Energy efficiency, storage technology, waste- heat - recapture from coal
fired power plants or orphan natural gas wells could also be included in the policy.
Establish robust workforce training hubs. Thanks to some of the best research facilities in
the country, Colorado's workforce is well educated and excels at advanced research. However,
Colorado lacks some of the specialized technicians needed to maintain and manage of some
of the larger wind farms and geothermal projects in the state. State legislators should promote
training opportunities close to clean tech hubs through the Colorado Renewable Energy
Collaboratory (CREC) network so that companies do not need to recruit out of state.
Enhance commercialization of research. For all of its advantages as a tech hub in the
Rockies, Colorado ranks 20th for the number of patents in the clean energy sector. Colorado
legislators need to help bridge the gap from the lab to Main Street. A possible solution is to
extend state tax credits to companies that use technologies developed or manufactured within
the state, like New Jersey's Renewable Energy Manufacturing Incentive (NJREMI) program.
(See the Market Synergy section for more information.)
Financing Clean Energy Investments
eel Many concepts that support clean energy also benefit energy efficiency and vice versa. As
with energy efficiency, Coloradans need access to financial resources in order to invest in clean
energy projects. Colorado should continue to improve access to financial tools that enable
property owners to increase their energy independence, hedge against volatility and long-
term increases in utility pricing, and reduce their carbon footprint.
Renewable energy systems are typically eligible to be financed with a PACE loan. This tool
has proven effective in the past, and again, would benefit greatly from the state's influence in
altering PACE to be a permitted financing tool under federal regulations.
The Power Purchase Agreement (PPA) has proven to be another effective model for financing
clean energy investments. This arrangement can be applied to various renewable energy
technologies and can benefit private property owners, as well as public sector entities, such as
schools and governments. The state should continue to facilitate partnerships and consider
the deployment of state -owned assets for PPA's, as they are a rapid way to increase renewable
energy interest and generation in Colorado.
EXAMPLE PROGRAMS IN OREGON
Beginning in 1980, the Oregon Department of Energy emerged as a leader in clean energy financing with
the creation of their State Energy Loan Program. The program is self- supporting, as expenses are paid by
borrowers and loan funds are raised using general obligation bonds. By the end of 2008, the program had
financed more than $420 million in local energy investments.
In 2011, Oregon introduced another innovative program, residential energy tax credits for solar installations.
This program allows homeowners to receive credits toward their Oregon income taxes for adding solar systems
to their property.
6
TRANSPORTATION
What's the Issue?
Colorado's economic drivers are found both in its metropolitan areas and rural recreation and
amenity -based communities. Mobility for this diverse workforce is critical to economic growth.
For many Colorado communities, transportation energy costs are a significant portion of their
cost of living. With housing costs becoming increasingly unaffordable in resort areas, it is often
low- income workers who are disproportionately affected by high transportation costs.
In 2008 Coloradans drove 46 billion miles, 70 percent more than in 1990 even though the state's
population only grew by 16 %. Between 2002 and 2007, gasoline expenditures rose 86 percent
in the state, causing Coloradans to spend $2.6 billion more to fuel their cars than they had
just five years earlier. At the same time, transportation -based greenhouse gases increased 62
percent between 1990 and 2007 in Colorado.
■O EML What's Happening Now?
• • Driven by convenience, safety and savings, demand for public transit is increasing. In 2008, 74
percent more Coloradans chose to ride transit than in 1991. An average commuter traveling
30 miles round trip for a full time position would save approximately $1,200 per year by
transitioning to public transportation. Additionally, analysis has shown that within a given
commuting zone, the growth in average net earnings are greater in rural counties with transit
systems, than in rural counties without transit systems.
House Bill 1331, "Incentives for Efficient Motor Vehicles," created financial incentives to help
consumers purchase efficient motor vehicles. HB 1331 extends tax credits to consumers who
purchase or convert vehicles that use "cutting edge" technology and petroleum reduction
technology, including plug -in hybrid electric conversion technology. The bill, which extends
tax credits until 2015 for most technologies, encourages consumers to consider a vehicle's air
pollution score, its fuel economy, and its carbon footprint before making a vehicle purchase.
What are the Opportunities?
Advocate for walkable communities and bike corridors. Several areas around the country,
including Boulder, CO, Charlottesville, VA and Austin, TX, have developed pedestrian walkways
that bring substantial economic revival to previously underutilized areas. The state should
provide additional transit funding for communities to invest in walkability measures, such as a
pedestrian mall, rails to trails design and other similar efforts. Bike programs, such as Denver's
Bike Sharing Program, also reduce traffic congestion and promote livability.
Support regional planning organizations (RPOs) with dedicated funding. Developing
independent RPOs allows for a variety of stakeholders and sectors to contribute to a
comprehensive transit plan, which would provide a regional blueprint for economic growth
and expansion of communities. Further, following such a blueprint provides better guidance
for developing transit -ready growth, which helps reduce cost and supports Colorado's mobile
workforce.
Promote electric car charging stations and infrastructure. The market for electric cars is
� growing rapidly. One of the greatest inhibiting factors is a lack of charging station infrastructure.
Supporting the installation of charging stations would reduce fuel emissions, save drivers
money and further establish Colorado as a leader in the clean tech marketplace.
Encourage additional Tight rail services. Rail service connecting goods, services and the
workforce to regional and national transport hubs is a significant opportunity to grow Colorado's
economy. The Rocky Mountain Rail Authority estimates a high -speed rail network linking
Fort Collins, Pueblo, Eagle County and DIA could bring $33 Billion to the state economy with
new jobs, income and increased property values. Continued support of these efforts and
coordination with similar federal planning efforts will ensure Colorado takes advantage of its
diverse economic resources.
7
FOSSIL FUELS
What's the issue?
As of 2009, Colorado was the ninth largest coal producer in the US. 28 Colorado is also fortunate
to have one of the largest natural gas fields in the country, the Piceance Basin. All told, the
energy extraction industry in 2007 employed roughly 25,000 people, though this was largely (50 %)
comprised of "support activities for mining. " While the coal, oil and gas industries are large
economic drivers for the state, Coloradans are not reaping the full economic benefit from the
development of their natural resources, nor are they adequately protected from industry risks.
For example, reports by Headwaters Economics and CORE's longtime Director, Randy Udall,
illustrate the sizeable loopholes in Colorado's severance tax policy for the natural gas industry. 31
The tens of millions of dollars in lost annual revenue could otherwise be supporting community
development or public education, for which it is primarily used in Wyoming.
A myriad of other issues are also at play, including water use and water contamination from
fracking and community and wildlife disruption from well pad development. Each of these
scenarios presents significant negative externalities, such as the release of carcinogens into
local water sources, which could easily affect the local economic livelihood.
What's Happening Now?
In 2010, the Clean Air -Clean Jobs Act was signed into law. The goal was to help 'clean'
Colorado's energy supply and air quality. The Oil and Gas Conservation Commission was also
recently expanded to include a greater diversity of members. The Commission then developed
a series of new regulations addressing the location and effect of drilling rigs.
Unfortunately, there is still much left to be done. As an example, a recent House Energy and
Commerce Committee report "shows that 1.5 million gallons of fracking fluid containing a
carcinogen were used in Colorado" between 2005 and 2009, a statistic that ranks Colorado 2nd
in the country in the use of fracking contaminants. Contaminated water not only affects the
health of Coloradans, but it has a deleterious effect on the state's economy. A large portion
of Colorado's economy relies on tourism and its natural resources. Healthy rivers and healthy
ecosystems are imperative to keeping tourism a prominent part of the economy.
What Are the Opportunities?
Fix the severance tax loopholes for the natural gas industry. There are currently two major
loopholes in Colorado's severance tax policy. First, the "stripper well" exemption, which
requires no severance tax payment from wells that produce less than 90,000 cubic feet of
natural gas per day or less; and secondly, the "ad valorem" deduction, which allows energy
companies to deduct their county property taxes from their severance tax payment. Following
are a few facts that illustrate the effect of these two loopholes: 33
• Roughly three fourths of Colorado oil and gas wells pay no severance tax at all.
• In 2005, Colorado collected $132M in severance taxes. In Wyoming the same amount of
production would have raised $382M, almost three times as much.
• In 2004, Noble Energy produced about $500M of natural gas in Weld County. They paid
zero dollars in severance taxes to the State of Colorado.
Analyze and re- assess potential impacts from fracking. Nationally and internationally
hydraulic fracturing (fracking) has come under increased scrutiny, primarily due to the unknown
and hazardous chemicals that are used — and with good reason. A group of investigative
journalists, ProPublica, "has documented more than 1,000 cases of water contamination near
U.S. shale sites. " A recent New York Times article further supports these concerns. 35 Moreover,
the recent Oscar - nominated documentary, Gasland, highlighted similar water contamination
complaints in Garfield County. The potential for increased fracking and increased contamination
represents a huge financial uncertainty for the natural gas industry and local communities.
8
Help small towns avoid boom /bust cycles from energy extraction. Colorado's history is
riddled with stories of mining's boom /bust cycle. Whether the mining was for silver in the 1880's
or natural gas today, local communities have suffered from the surge and dearth of economic
resources. Some of the factors contributing to this phenomenon are out of Colorado's hands.
Other factors are not. One of the most important things the state can do, for communities sited
near extractive energy sources, is to help create a diversified economy, which includes protecting
natural resource and public lands for hunting, fishing, ranching and recreational activities.
MARKET SYNERGY
What's the Issue?
Several of Colorado's largest economic sectors have benefited from growing the clean energy
economy. Improving the way Colorado uses energy helps protect the natural resources that
attract tourists. Supporting progressive energy policies inspires confidence in renewable
energy service companies considering expansion or looking for a place to gain footing in
a rapidly expanding market. Likewise, making Colorado a hub of clean tech research and
development strengthens the universities and workforce to deliver higher paying jobs and
professional careers.
What Are the Opportunities?
Manufacturing
In order to reduce imports and increase exports, Colorado should focus efforts on developing
MEd products for which a local or regional market exists, such as wind and solar energy technologies.
A good example of a successful program is New Jersey's Renewable Energy Manufacturing
Incentive (NJREMI), which provides rebates to New Jersey residents, businesses, local
governments, and non - profit organizations that purchase and install solar panels, inverters,
and racking systems manufactured in New Jersey. In order to qualify as a certified New Jersey
manufacturer under this program, companies must supply products manufactured with at least
50 percent of the product cost — including the labor, overhead, components, and raw materials
— from facilities located in New Jersey. The Program's economic development impact is two-
fold: first, incentivizing private investments in renewable energy technologies (creating jobs for
system installers, electricians, and engineers), and secondly, helping to establish a market for
clean energy products manufactured in the state (creating manufacturing jobs).
Higher Education
Colorado should continue to invest in businesses and institutions that build our intellectual
capital. We should take advantage of the opportunity to create and fill new professional level
jobs with talented scientists and executives being trained in the state's numerous energy -
related higher education programs, as well as at the National Renewable Energy Lab (NREL).
Governor Ritter developed the Colorado Renewable Energy Collaboratory (CREC) to build
on the individual merits and developments being made at the Colorado School of Mines,
CSU and CU. The Collaboratory's key goals are to create private - public research relationships
that provide rapid transfer of technology to the marketplace. As such, the center is not
only grooming some of the best minds in the field, but also garnering financial interest from
companies worldwide to invest in Colorado.
Although Colorado's budget is strained, maintaining funding for higher education is absolutely
essential to develop the state's capacity in the energy sector and remain competitive in national
and international markets.
Tourism
Based on 2007 data, the Colorado Tourism Office (CTO) estimates that approximately 200,000
jobs, $9.8 billion in visitor spending, and $763 million in state and local taxes are attributable to
the tourism industry. While the industry benefits from a diverse mix of cultural and recreational
attractions for visitors across the state, it is well known that outdoor recreational activities
represent a significant draw for visitors. Whether it's skiing, hunting, fishing, cycling or camping,
a healthy natural environment, including the production of clean energy, is a major economic
9 asset to our state. As such, Colorado, its municipalities, the CTO and tourism partners should
continually and consistently tout the many efforts aimed at protecting our natural resources
and preserving vibrant ecosystems throughout the state.
Oak Given the numerous statewide efforts to protect the health of our natural environment, whether
establishing conservation funds, spearheading clean energy technologies, or improving our
mass transit infrastructure, Colorado has an opportunity to claim a niche as a sustainability-
oriented tourism destination. Aspen Skiing Company, as an example, has successfully used
their energy and environmental commitments in national marketing campaigns.
PITKIN COUNTY'S HEALTHY RIVERS AND STREAMS FUND
Acknowledging the economic and recreational value of the county's rivers and streams, in 2008, voters in Pitkin
County approved a sales tax of 0.1% to be dedicated to establishing a Healthy Rivers and' Streams Fund. The
purpose of the fund is to maintain and improve water quality, protect water rights, preserve minimum stream flows,
and ensure ecological health, recreational opportunities, and wildlife and riparian habitat within the Roaring Fork
Watershed. The fund is also directed to promote water conservation and maintain capital improvements. Since
its passage, this tax has generated approximately $675,000 per year to protect the county's natural resources and
recreational assets.
Overall, the market synergies realized when sustainable energy policy is applied among the
manufacturing, education and tourism sectors demonstrates how a shared commitment to a
clean energy future can help us collectively increase the state's economic potential. As noted,
continuing our commitment to growing clean energy investments will bring complementary
growth to some of our largest industries. Additionally, we have a substantial interest in
preserving the quality and beauty of our natural environment, arguably the lifeblood of our
state economy. Changing course now would be a detriment to the physical and economic
health, safety and welfare of all Coloradans.
CONCLUSION
*I t Colorado experienced an 18% growth in clean tech jobs from 1998 to 2007 even as the
air ir industry was just gaining a foothold nationally. As the clean tech sector grows —which it
' inevitably will as technologies improve, alternative energy prices fall and carbon mandates are
implemented —it is imperative Colorado remain a leading state in the industry. By continually
developing progressive policies, Colorado will encourage greater industry investment and
ensure Colorado's inclusion in the clean tech market.
The state must not abandon its support of the Governor's Energy Office and the agency's
mission to advocate for energy efficiency and renewable energy. The GEO has played an
integral role in elevating Colorado to its leadership position and will continue to provide critical
ti support. By promoting the adoption of progressive energy legislation, the GEO helped attract
$30 million in Better Buildings funding from the Department of Energy. CORE and its regional
partners urge Governor Hickenlooper to provide dedicated, long term funding to ensure this
agency remains fully staffed.
Furthermore, we ask Governor Hickenlooper to consider the implications of climate change
when developing Colorado's future economic strategy. According to a recently published
American Security Project report, Colorado will incur increased economic stresses due to
climate change. 37 These effects should not and cannot be ignored as we plan for the future of
our state. Just as Colorado has thus far benefited from being a leader in the clean tech sector,
it will reap rewards from leading on innovative carbon reduction policies as well. Moreover,
implementing additional clean energy and efficiency strategies will protect natural habitats,
secure clean air and clean water, and benefit public health.
Most importantly, we encourage Governor Hickenlooper to look at our energy and environmental
situation through an honest and realistic lens, with a sense of opportunity – an opportunity to
protect our cherished heritage and natural assets, an opportunity to spurtechnological innovation,
an opportunity to improve the lives of residents throughout the state, and an opportunity to grow
Colorado's economy through the support of new, sustainable industry sectors.
10
FOOTNOTES
1. Department of Energy Press Release. 2009. DOE to Fund up to $445 Million for Retrofit Ramp Ups in Energy Efficiency.
2. McKinsey and Company. 2009. Unlocking energy efficiency in the US economy.
3. Environment Northeast. 2009. Energy Efficiency: Engine of Economic Growth.
4. National Renewable Energy Laboratory. 2010. Property Assessed Clean Energy (PACE) and Economic Impacts in Boulder County.
5. Southwest Energy Efficiency Project. 2003. Increasing energy efficiency in new buildings in the Southwest: Energy codes
and best practices.
6. Governor's Energy Office. 2010. www.rechargecolorado.com
7. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses, and Investments across America.
8. American Council for an Energy Efficient Economy. 2004. Five Years In: An Examination of the first half decade of public benefits
energy efficiency programs.
9. ACEEE. 2010. Opportunities for increasing the penetration of energy efficiency by leveraging the resources of
local governments.
10. Austin Energy. www,austinenergy.com
11. American Security Project. 2010. "Pay now or pay later: Colorado."
12. Pew Center for the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses and Investments across America.
13. Ibid.
14. The Energy Foundation. 2011. A Blueprint for a New Energy Economy.
15. Colorado Cleantech Industry Association(CCIA). 2010. Colorado Cleantech Action Plan: A roadmap to guide the development of
Colorado's clean technology industry.
16. National Science Foundation. 2009. "Science and Engineering State Profiles."
17. Pacific Northwest Laboratory. August 1991. "An Assessment of the Available Windy Land Area and Wind Energy Potential in
the Contiguous United States "; Navigant analysis.
18. NREL. 2008. "Center to Research New Ways to Convert Sunshine to Power and Fuels."
19. Vallin, G. 2010. "Colorado- A leader in Wind Energy." Renewable Energy World.
20. The Energy Foundation. 2011. A Blueprint for a New Energy Economy.
21. The Energy Foundation. 2011. A Blueprint for a New Energy Economy.
22. CCIA. 2010. Colorado Cleantech Action Plan.
23. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses and Investments across America.
24. CoPIRG Foundation. 2010. Colorado's Transportation Crossroads: Priority Transit Projects for the 21st Century.
25. Denver Regional Council of Governments. RideArrangers' Commuter Savings Calculator
26. CoPIRG Foundation. 2010. Colorado's Transportation Crossroads: Priority Transit Projects for the 21st Century.
27. Rocky Mountain Rail Authority. 2010. High -Speed Rail Feasibility Study.
28 National Mining Association. 2010. U.S. Coal Production by State and by Rank.
29. Corporation for a Skilled Workforce. 2009. Industry Guidebook: Energy Extraction.
30. Headwaters Economics. 2011. Fossil Fuel Extraction and Western Economies.
31. Udall, Randy. 2007. "Torched and Burned: Why Does Colorado Subsidize the World's Most Profitable Industry."
Community Office for Resource Efficiency.
32. Sherry, Allison. 2011. "Colorado No. 2 in Carcinogen -laced 'fracking' fluids." Denver Post.
33. Udall, Randy. 2007. "Torched and Burned: Why Does Colorado Subsidize the World's Most Profitable Industry."
Community Office for Resource Efficiency.
34. Schiller, Ben. 2011. "Fracking Comes to Europe, Sparking Rising Controversy." Yale Environment 360.
35. Revkin, Andew. 2011 "Study Links Flammable Gas in Water and Nearby Drilling." New York Times.
36. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses and Investments across America.
37. American Security Project. 2011. Pay Now, Pay Later: Colorado.
11
Cft•RE
Comm. .Y Offf r. re. ne.o...r• eff lrle�ry
CORE would like to thank the following organizations for their contributions to this report.
EnergySmart
PITKIN COUNTY
Mary Kenyon
IMPtCT
MARKETING
C 1)r
ORE
CORE Energy Smart Resource Center CORE
215 N. Garmisch St 111 ABC, Suite M 520 S Third St
Aspen, CO 81611 Aspen, CO 81612 Carbondale, CO 81623
970.544.9808 970.925.9775 970.963.1090
WWW.ASPENCORE.ORG