The legislature of the State of Colorado has been very active on renewable energy issues over the last few weeks. Three bills have been making steady progress through the House and Senate in Denver, each of which could have a noticeable effect on the renewable industries in the state.
Coal-Mine Methane as a Renewable Energy Source
Recently enacted House Bill 1160 amends Colorado's renewable energy standard to include electricity generated by burning captured coal-mine methane. The legislation passed in both the House and Senate, and was signed into law on March 26, 2012. The bill faced strong opposition by many environmental and renewable energy advocacy groups, including Western Resource Advocates ("WRA"), based in Boulder, Colorado. In a March 23, 2012 guest commentary in the Denver Post, John Nielsen, the Energy Program Director at WRA stated that "[b]y allowing coal-mine methane to qualify as 'renewable energy,' something it is not, HB 1160 would diminish further investments in Colorado's wind and solar resources. Those resources are sustainable, emission-free, use little or no water, provide important health and economic development benefits, and reduce greenhouse gases."
Prohibition on Severance of Wind Rights
House Bill 12-1105 seeks to establish a non-severable wind energy right in real property. Essentially, under this proposal a landowner would not be able to sell fee simple title to the wind rights on his or her property, but must instead execute a lease, license, easement or other agreement to develop or participate in the income from or the development of a wind project on the property. The legislation has passed in the House, and is now being considered by the Senate Local Government Committee. This proposal law is in-line with a national trend against severance of wind and solar rights, and effectively prohibits a landowner from selling the wind or solar rights to a project developer while retaining the ownership of the underlying property. Interestingly, however, this legislation seems to expressly contemplate and allow for the transfer of the rights to receive the income from the wind project to a third-party, which could potentially lead to many of the same down-stream ownership concerns that commonly give rise to severance restrictions in the first place.
Ending PUC's Authority Over Transmission Siting Issues
House Bill 12-1312 seeks to modify the Colorado Public Service Commission's approval processes for transmission line certificates of convenience and necessity, so that the PUC no longer has jurisdiction over the land use rights or siting issues related to the location or alignment of the proposed transmission lines. Instead, those issues would be left to the discretion of the county and local governments. Ms. Becky Quintana, a representative of the PUC, recently went before the House Committee on Transportation to discuss this legislation and stated that the PUC neither supported nor opposed the legislation. From the PUC's perspective, the legislation does not restrict the authority of the PUC, but rather more clearly defines the jurisdiction of the PUC and local governments, though she noted that, under the proposal, any transmission project that spanned multiple counties would require inter-governmental agreements as each county's jurisdiction would end at the county line. The bill has passed both the House and Senate.
For More Information
If you have questions about any of these bills, or for information about developing renewable energy projects in Colorado, please contact Ron Rossi in Denver at 720.931.1180 or rrossi@polsinelli.com or another member of the Polsinelli Shughart Energy practice group.
