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“All of the Above” Must Include Coal and Gas

September 14, 2012

Two weeks ago, the CREA Board of Directors approved a resolution recommending an extension of the federal production tax credit for renewable energy projects. The tax credit, which allows developers of certain renewable energy projects (mostly wind) to reduce their federal income tax obligation in relation to the amount of energy produced, is currently scheduled to expire at the end of 2012.

Our Board had a very lively debate about the merits of extending the tax credit: some felt it was appropriate to continue to subsidize renewable energy for a limited period of time because it has generated jobs and diversity in power supply, others argued that these kinds of subsidies distort the market and should be discontinued. There were strong arguments on both sides of the issue. Ultimately, the Board decided to support the continuation of the tax credit with the caveat that it not be extended indefinitely. The Board also voted to send copies of the approved resolution to our congressional delegation.

After receiving our letter, Senator Michael Bennet’s staff called to thank us for our support for the extension of the tax credit. While I was grateful for the call, I took the opportunity to tell the Senator’s staffers that we could sure use the Senator’s support of all domestic resources for producing electricity. Specifically, I told Senator Bennet’s staff that while wind and other renewables have an important place in our power portfolio, the Colorado and U.S. economy depend on reliable, abundant, and affordable electricity that today can only be produced with dispatchable power generation sources that are fossil-fuel based. We’re making great progress with renewables, but until better storage technology comes along, we have to find a way to continue to use coal and natural gas for a significant part of our power supply.

We appreciate the positive discussion with Senator Bennet’s office and hope it will lead to a better understanding of the concerns of Colorado’s electric co-ops when it comes to the cost of power.

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