THE ECONOMIC AND JOB IMPACTS OF THE PROPOSED COLORADO RES
Management Information Services, Inc. April 12, 2013 A Bill has been introduced in Colorado that would require rural electriccooperatives in the state, such as theTri-State Generation and Transmission Association, to increase the portion of renewable electricity generated starting in 2020from 10% to 25%.
The direct cost to Tri-state alone has been estimated to be as higha $4 billion, and the resulting rate increase would be about 20%.
Rate Impact on Rural Colorado
Rural electric coops in Colorado directly supply electricity to rural residences,farms and ranches, cities, towns, and suburban communities, as well as large and smallcommercial businesses and industries
Figure 1 illustrates the member of Tri-state.The immediate, direct rate impact of the RES requirement would be especially severeon the one of every five Colorado citizens served by these cooperatives:
Rural electric coops in Colorado supply electricity primarily to ruralcustomers, and the communities served are relatively low-income.
Many of the tribal customers served by these coops reside in someof the poorest economies in the entire country.
On average, these member systems serve five consumers per mile,compared to 37 consumers per mile served by investor ownedutilities
thereby greatly increasing service costs.
The RES would cause the average electric bill for the coops’
residential customers to increase from about $95 per month toabout $115 per month
This increase would pose real hardships for many of the customers
low income, rural, and living on fixed incomes
who lack thediscretionary income to afford it. The trade-offs they would beforced to make include spending less money on medicine,healthcare, food, and clothing.
Economic and Jobs Impacts in Colorado
Electricity price increases act like a tax increase, reducing incomes of energyconsumers and ratepayers. The supply-side impacts from electricity price increasesdepress business development and economic output and destroy jobs.Energy and energy prices
specifically electricity and electricity prices -- matter to the economy and, in general, more abundant, efficient, and less expensive electricityis desirable and preferred and provides significant economic and jobs benefits.
Electricity is a mainstay of the U.S. economy and a critical factor of production, so this isstraightforward and noncontroversial.
To quantify the relationship between electricity