Colorado’s Renewable Energy Standard—also known as a Renewable Portfolio Standard (RPS)—is intended to increase use of renewable resources in the state by establishing the minimum amount of renewable energy that the state’s electricity providers must sell in a given year. This legally-established renewable energy procurement goal gradually increases over time to meet the overall target of 30% renewable power by 2020.
The state profile below explores the design of this policy, highlighting the factors that influence the success of Colorado’s RPS goals and the tradeoffs inherent to it. Once you’re comfortable with the information on this page, you can evaluate the policy’s expected viability with the RPS Feasibility Calculator. You can also use the calculator to change the policy requirements, trajectory, cost cap, and more, to see how altering Colorado’s policy design affects its success.
- 30% of the state’s retail electric sales from must be from renewable sources by 2020, subject to the cost cap
- Carve-out for distributed generation
- Explicit cost cap at 2% of customer’s annual bill
Carve-outs can create economic opportunities in the state by introducing new or promising technologies into the market. However, these standards limit the utilities’ ability to substitute between renewable energy sources, potentially increasing the cost of the policy. Colorado’s RPS requires that 3% of the renewable obligation in each year be fulfilled through distributed generation
Compare the goal established in the RPS to what is being achieved.
The following chart compares the variety of sources currently used to generate Colorado’s electricity. The color of each bar is indicative of the carbon intensity of each source.
Cost Cap Details
Colorado has an explicit cost cap at 2% of the customer’s annual bill. If the premium paid for renewable energy by a utility exceeds this amount, the utilities obligation under the RES will be reduced to the level of this cost cap (see C.R.S 40-2-124 §1(g)). If a utility is below this cost cap, it can acquire renewable energy resources above the minimum level established in the RES. This ‘rate impact rule’ applies to both investor-owned utilities and electric cooperatives. Using the RPS Feasibility Calculator you can make adjustments to the cost cap, determining how this impacts the provision of renewable power and the overall viability of the RPS.
Historic retail prices (¢ / kWh)
The above chart presents historical data from the Energy Information Administration (EIA) on the price at which residential customers can purchase electricity. Typically, states set explicit cost caps relative to the retail price (as opposed to the lower wholesale price).
Colorado is the first state to create a RPS through ballot initiative. In 2004, voters approved Amendment 37 requiring utilities serving 40,000 or more customers to generate or purchase enough renewable energy to comprise 10% of retail electric sales. It would be increased and modified two subsequent times to its current goal of 30% by 2020 (see C.R.S. 40-2-124). These modifications added a secondary RPS of 10% by 2020 for electric cooperatives (serving less than 100,000 customers) and municipalities (serving over 40,000 customers). In 2013, S.B. 252 added a distributed generation carve-out, and created a separate RPS schedule for ‘co-ops’ serving over 100,000 meters which requires that renewable energy account for 20% of sales by 2020 and thereafter.
RPS Technical Details
|Eligible Technologies||Solar-electric, Wind, Geothermal-electric, Biomass facilities that burn nontoxic plants, Landfill gas, Animal waste, Hydropower, Recycled energy, Fuel cells using renewables-sourced hydrogen|
|Geographic Eligibility||No restrictions on location; tradable RECs can be used to satisfy requirement, but have life of 5 years from calendar year it was generated.|
|Percent of Total Load||Primary RPS: 58.7%, Secondary RPS: 35.6%|
|Technology Requirements||Distributed Generation (IOUs)—3% of the annual requirement (half being fulfilled by on-site installations) for 2011 and thereafter; Distributed Generation (Coops)—1% for coops serving 10,000 or more meters, 0.75% for cooperatives serving less than 10,000 meters|
|Sectors||Investor-Owned Utilities, Cooperatives and Municipal electric companies|
|Penalty||By statute, state regulators may impose unspecified penalties for non-compliance.|
Tools and other links
- Database of State Incentives for Renewables & Efficiency (DSIRE) RPS data page—Datasets available for download in .xlsx format
- National Renewable Energy Laboratory (NREL) Energy Analysis Portal—Resources on renewable energy policies, and interactive web tools
- Energy Information Administration (EIA) U.S. Energy Mapping System—An interactive energy resource map with a myriad of data layers to explore
- DSIRE State RPS Page—Visit for detailed information on RPS and complete legislation
- U.S. Department of Energy Office of Energy Efficiency and Renewable Energy (EERE)—State Profile—Access your state’s EERE page, and find information on renewable resources maps, energy statistics, and news