Colorado

Number of Sites with CHP: 27

Total Installed Megawatts: 678

Sample Companies and Facilities Using CHP

Industrial:

Institutional:

  • Boulder Waste Facilities
  • City of Arvada
  • City of Aspen
  • City of Durango *renewable
  • Colorado Department of Labor and Employment
  • Colorado State University
  • Metro Wastewater Reclamation District *renewable
  • University of Colorado at Boulder
  • University of Northern Colorado

* Contact Us if you know of additions or subtractions from this list.

Colorado Policies Affecting CHP

Statewide Interconnection Procedures: Yes

  • Interconnection standards in Colorado are decent but could be made better by eliminating the requirement for additional insurance. Customers with grid-tied DG systems already carry their own general liability insurance, and the rules already have provisions for indemnification, making the requirement for additional insurance redundant and an extra, unneeded expense. See the policy (page 126)
  • About statewide interconnection policies

Waste Heat Included in Renewable Portfolio Standard: Yes

CHP in Utility Demand-Side Management: No

  • This has been recommended to Xcel Energy and to the Public Utilities Commission, as a way to help Xcel to meet its energy efficiency goals. However, it still faces internal utility challenges before going forward.
  • About CHP in efficiency portfolio standards

Output-based Emission Standards: No

Fair Standby Rates: No

  • Standby rates are excessively high in Xcel's territory as well as in some co-op territories. They have single-handedly prevented projects from going forward, and forced others to shut down. These standby rates need to be re-evaluated to reflect the risk of systems incurring unplanned downtime, and the benefits that CHP provides to the grid.
  • About standby rates

CHP-Specific Incentives: SOME

  • Tri-State provides power to 44 rural electric cooperatives in parts of CO, NM, WY, and NE. Tri-State offers some incentives for its member cooperatives to develop distributed and/or renewable energy projects, and recycled energy projects qualify. See the Policy Summary, FAQs (part 1) and FAQs (part 2).
  • New Energy Economic Development (NEED) grants that are competitively offered twice a year from the Colorado Energy Office could count recycled energy projects, but they are not officially called out. Check the main page of the Colorado Energy Office for updates on new grant periods.

Assessment of CHP Conditions in Colorado

Colorado Electricity Prices

Average Retail Electricity Prices

Electricity prices in Colorado do not have as significant summer and early fall peaks as other southwest region states, but both the commercial and industrial electricity prices seem to have more volatility than the national average. However, the prices have also been below the national average for the majority of the years by often a cent (per kWh) for commercial, and a fraction of a cent for the industrial sector.

Colorado average commercial retail electricity price (2010) 9.05 ¢/kWh
National average commercial retail electricity price (2010) 10.26 ¢/kWh
Colorado average industrial retail electricity price (2010) 6.91 ¢/kWh
National average industrial retail electricity price (2010) 6.79 ¢/kWh

Source: EIA; data is year-to-date through December 2010.
Note: All data post January 2010 are preliminary estimates based on a cutoff model sample.

Colorado Natural Gas Prices

Average Retail Natural Gas Prices

Colorado has seen more volatility than the national average in natural gas prices over the past five years. In particular, the Colorado industrial sector has seen a fluctuation of ten dollars over the course of a single year in comparison to approximately five dollars over the course of the same year for the national average. The industrial sector also is more likely to be above the national average, while the Colorado commercial sector prices are more likely to be below the national average. Overall the prices seem to mirror the national trends, and are currently trending downward. Since Colorado has fairly low gas prices, though with fairly high volatility, a CHP project in Colorado could be economically viable as long as it is able to average out its financial impact over the course of a year. Commercial CHP projects would be more easily viable than industrial.

When evaluating CHP, a considerable amount of attention needs to be placed on the price of natural gas, and where it may be headed in the future. The combination of relatively low electric prices and rising natural gas prices makes it more difficult for a CHP project to be economic and generate cost savings, but there are still going to be successful applications for the appropriate use of CHP. The best applications are those that value high reliability, have higher electric rates during peak times, spend a high percentage of their energy bill on air conditioning, and/or potentially could make use of a "waste fuel."

Colorado average commercial natural gas price (2010) 7.75 $/TCF
National average commercial natural gas price (2010) 9.23 $/TCF
Colorado average industrial natural gas price (2010) 5.76 $/TCF
National average industrial natural gas price (2010) 5.34 $/TCF

Source: EIA; data is year-to-date through December 2010.

Key Colorado Contacts

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** Click on a state to learn more about the
status of CHP in that state