1. Selecting Renewable Projects at Colorado Springs Utilities APPA Conference John Romero GM Acquisition, Engineering and Planning October, 2009

2. Overview Overview of Colorado Springs Utilities What is Driving Renewable Investment Which Projects and Why Challenges with Renewables Summary

3. Overview of Colorado Springs Utilities Four Service Utility 500,000+ Combined Customers 863 MW Peak (2007) 200,000+ Electric Customers Front Range

4. Colorado Renewable Portfolio Standard (RPS) Customer Desire for Renewables Potential Environmental Legislation American Recovery and Reinvestment Act (Stimulus) What is Driving Renewable Investment?

5. Colorado Renewable Portfolio Standard Investor Owned UtilitiesMunis/Co-ops 2008-10 5% 1% 2011-14 10% 3% 2015-19 15% 6% 2020 20% 10% Renewable energy: solar, wind, geothermal, biomass, landfill gas, animal waste, hydropower, recycled energy and fuel cells. IOU’s must generate at least 4% of the requirement from solar with one-half coming from customer on-site generation No solar requirement for munis/co-ops 300% RPS credit per MWH for solar before July 1, 2015 125% RPS credit per MWH for Colorado generated renewable energy Percentage based on retail electric sales What is Driving Renewable Investment?

6. Customer Desire for Renewables General Desire 76% of customers express a willingness to pay $1 - $2 more per month to add wind to the resource mix Business Customers Universities/small commercial requesting additional “green” power Military Bases Stimulus Money Net Zero Energy Users by 2020 What is Driving Renewable Investment?

7. Potential Environmental Legislation Waxman-Markey Clean Energy Renewable Energy and energy efficiency: 6% in 2012 rising to 25% in 2025 Carbon Capture and Sequestration Smart Grid Global Warming CO2 reductions from 2005 levels: 3%:2012, 17%:2020, 42%:2030 and 83%:2050 What is Driving Renewable Investment?

8. American Recovery and Reinvestment Act (Stimulus) $11 billion for a smarter grid $5 billion for low-income home weatherization projects $4.5 billion to green federal buildings $6.3 billion for state and local renewable energy and energy efficiency efforts $600 million in green job training programs $2 billion in competitive grants to develop energy storage What is Driving Renewable Investment?

9. Renewable Energy Credits (RECs) Solar Wind Hydro Biomass Which Projects and Why?

10. Source: NREL May 2009

11. Renewable Energy Credits Five Year Contract with Western Area Power Administration (2006 – 2010) Purchase of over 1.5M RECs Price: $2.49 / MWh Assured Compliance through 2018 Value Proposition of $100M+ over Alternatives Which Projects and Why?

12. Wind Issued RFP for 10 – 100 MW of Wind 14 Respondents, 4 Finalists, Recommendation of Award in June 2009 Wind Integration Study: 50 MW Limit Contract Negotiations for Delivery in 2011 Which Projects and Why?

13. Solar United States Air Force Academy (USAFA) Stimulus $18.3 Million to Provide Solar Service 2 – 4 MW of Capacity Working with USAFA to Meet Military Renewable Objectives Which Projects and Why?

14. Hydro Cascade Hydro 850 KW 2009 Online Date Finished Water Micro Turbines (evaluation stage) USAFA Project Which Projects and Why?

15. Biomass – Co-firing 20 MW co-fire at Drake Coal Facility Reduced Coal Burn of 75,000 tons 150,000 MWh of Production Grants (applications) USDA Woody Biomass Grant ($250,000) Cooperative State Research Education and Extension Service ($5 Million matching) Which Projects and Why?

16. Costly Compared to Traditional Resources (at least, for now) Typically Low Capacity Factors Intermittent Challenges with Renewables

17. Summary Renewables Driven by: Legislation Customer Desire to be “Green” Desire to be Environmentally Friendly Resource Portfolio Diversity Project Selection Cost Customer Directed Integration Changes to Dispatching Resource Mix