Renewable Energy Standards Explained

Renewable Portfolio Standards (RPS) demand that a specified percentage of the electricity utilities sell come from renewable resources. States have created these standards to expand their energy resources, promote domestic energy production and support economic development.

Recent RPS legislation has seen a push toward 100% clean or renewable energy requirements, including Colorado’s RPS target by 2050. States determine qualified resources based on their existing energy generation mix and the potential for renewable energy development in their states.

Qualifying renewable energy resources in Colorado include solar, wind, geothermal, biomass, certain hydroelectric resources, and emissions-neutral coal-mine methane. 

Making Clean Energy Accessible

RES policies are intended to encourage competition between energy project developers to take advantage of the vast renewable energy resources that exist in the United States. Various studies have shown that an ambitious RES will help to create thousands of brand-new jobs, stimulate economic development, decrease pollution, and save consumers money on their utility bills.

Low-Cost & Flexible Compliance 

Utilities that are subject to a RES are required to acquire renewable energy certificates or credits (RECs) for the required percentage of their generation. To allow utilities some flexibility in complying with the requirement, RECs may be bought, sold, or traded independently from the accompanying energy.

How have RPS programs been implemented?

State RPS programs vary widely in terms of program structure, enforcement mechanisms, size, and application. No two state programs are the same. Some states focus the RPS requirements on large investor-owned utilities, while others apply the standards to all utilities operating in the state.

In addition to renewable energy standards, some states have clean energy targets or goals. These states have defined terms such as carbon-free, carbon-neutral, or clean energy in different ways

Colorado: Renewable Portfolio Standard

In total, 36 states and the District of Columbia had established an RPS or a renewable energy goal. In 12 of those states (and the District of Columbia), the requirement is for 100% clean electricity by 2050 or earlier.

See below for Colorado’s RPS: 

• Title: Renewable Energy Standard.
• Established: 2004.
• Requirement: 30% by 2020 (IOUs); 10% or 20% for municipalities and electric cooperatives depending on size; 100% clean energy by 2050 for utilities serving 500,000 or more customers.
• Applicable Sectors: Investor-owned utility, municipal utilities, cooperative utilities.
• Cost Cap: Approximately 2%.
• Details: For a distributed generation, 3% of IOU retail sales by 2020, 1% of cooperative retail sales by 2020 (for those providing service to 10,000 or more meters) or 0.75% of cooperative retail sales by 2020 (for those providing service to less than 10,000 meters). The state has several credit multipliers for different technologies. Additionally, in 2019, Colorado enacted legislation requiring utilities serving 500,000 or more customers to supply 100% of retail sales with clean energy sources by 2050 so long as meeting such requirements is technically and economically feasible and in the public interest.
• Enabling Statute, Code or Order: Colo. Rev. Stat. §40-2-124; Senate Bill 252 (2013); Senate Bill 263 (2019).