Colorado

Race to the Top: The Expanding Role of U.S. State Renewable Portfolio Standards

For many years, the lone mechanism whereby states enacted RPSs and related state policies to reduce greenhouse gases involved the traditional channels of representative government. But the majority of American states have constitutional provisions that allow legislation to be enacted through majority vote of the electorate and they have used them increasingly in recent decades on a range of environmental and energy issues (Guber 2003). Consistent with that trend, in November 2004, Colorado became the first state to enact an RPS through "direct democracy" when Proposition 37 passed by a 54-to-46 percent margin. This led to extensive rule-making directed by the Colorado Public Utility Commission, with an Order released in December 2005 still subject to requests for rehearing. In 2007, covered suppliers will be required to generate three percent of their electricity from renewables, an increase from the current level of two percent, and steadily increase their renewable output to a level of 10 percent by 2015. The legislation also requires that at least four percent of renewables covered under the standard be derived from solar sources and establishes an explicit cost cap whereby any impact from the RPS cannot exceed 50 cents per residential customer per month.

After a coalition headed by utilities and coal mining interests blocked an RPS in three consecutive sessions of the Colorado legislature, the state seemed unlikely to adopt such a policy. Indeed, Colorado had been among those states most reluctant to take any steps related to greenhouse gas emissions during the previous decade (Rabe 2004). At the same time, proponents felt that there was a strong base of support for the RPS, since it had nearly passed the legislature on two prior occasions and preliminary polling showed solid public support. Consequently, supporters decided to go the route of an initiative, gathering more than 100,000 petition signatures that secured a place on the November ballot.

Opposition spent more than $2 million under the banner of an organization called Citizens for Sensible Energy Choices, investing heavily in a television advertising campaign that focused on concerns about potential costs. However, support was maintained through a campaign with bipartisan leadership, including co-chairs Lola Spradley, the Republican Speaker of the Colorado House, and Mark Udall, a Democratic member of the U.S. House of Representatives. The campaign enlisted a tapestry of supporters, representing numerous renewable energy developers, agriculture and ranching interests, public health and environmental protection constituencies, and various religious organizations. Proposition 37 also received endorsements from most of the state's major media outlets, including the Denver Post (Post 2004).

A number of anticipated environmental benefits were raised during the campaign but the most important driver behind the passage of Proposition 37 was projected economic development from expanding renewable capacity (Smith 2004). Considerable attention was focused on the state's first major wind farm, a 108-turbine facility in rural Prowers County. This farm has been warmly embraced in that part of the state, supplementing incomes of individual ranchers and farmers and boosting local property tax revenues by approximately one-third. As Rep. Spradley noted in a public endorsement of the RPS initiative, "Ranchers and farmers are going to harvest a bumper crop of renewable energy that can bring important economic development to rural Colorado" (Coloradans for Clean Energy 2004).

Just as new policies can diffuse across states through representative institutions, there is ample precedent for one state's use of direct democracy provisions to trigger replication elsewhere. The Colorado RPS has already attracted considerable national publicity due to its route of enactment and RPS proponents in states such as Oregon and Washington have begun to study the case as a possible model for their own future efforts. In turn, the Colorado ballot proposition may well have served as an impetus for Montana to accelerate its timetable for enacting its own RPS through more conventional means, just one month after the passage of Proposition 37.

All references are cited in the report, which can be downloaded here.