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06-20-11 Town Council Packets(2) 4 Rhonda Coxon From: Jason Haber (Jason @aspencore.org] Sent: Wednesday, June 15, 2011 12:39 PM To: John Wilkinson; billb @rof.net; butlermrky @aol.com; Fred Kucker Cc: Hunt Walker; Russell Forrest; John Dresser; Rhonda Coxon Subject: CORE Economic Development Report Attachments: Prioritizing Clean Energy_CORE.PDF Dear Councilmembers- Recognizing that the number one priority for most Coloradoans is to invigorate the economy and create jobs, Governor Hickenlooper launched his Bottom -Up Economic Development Initiative earlier this year. The goal of the Initiative is to create an economic development plan for the state through strategies suggested via county governments and the 14 regional Colorado Council of Governments. CORE wholeheartedly supports the Governor's Initiative and has been fortunate to be involved in regional meetings. However, after attending several meetings and in discussing this process with our partners, we felt there was a need to specifically address Colorado's clean tech and efficiency markets in the state's strategy. The clean tech industry in Colorado saw an 18% growth in jobs from 1998 -2007, while the state average for remaining sectors during that time period was only 8 To sustain such momentum, stimulate the economy and protect the environment, Colorado must continue to make the clean tech sector a state priority. Attached you will find CORE's report "Prioritizing Clears Energy and Energy Conservation in Colorado's Economic Development Strategy." Prepared by CORE staff and partners, the report outlines the economic opportunities in the clean tech industry and what Colorado legislators can do to ensure these opportunities are not overlooked. Please keep in mind that this report is in no way meant to be comprehensive. We are aware that many more opportunities exist, but we simply could not cover them all. Rather, we chose to put forward a diverse set of options for Colorado lawmakers to consider. Our primary goal was to illustrate the myriad financial opportunities available to homeowners, business owners and investors in Colorado. On Monday (6/20), 1 plan to address this report during the Council Updates portion of the agenda. I will be requesting that Council endorse this document, so that CORE may include the Town of Snowmass Village in a growing list of supporters. If a collective endorsement is not possible, any individual support from Council members willing to have their name included in the list would also be great. After we have collected signatures, the report will be sent to members of the State Senate and House of Representatives. Later this month, CORE staff and partners will meet with legislators to discuss in depth the economic opportunities outlined in the report and how best to promote them in the legislature. We hope you'll find this work broadly representative of your wishes for Colorado's economic future as much as we do: Thank you for your time and support! Jason Haber Energy Programs Manager Community Office for Resource Efficiency 970.963.logo 520 S. 3rd St. Suite 102 Carbondale, CO 81.623 www.aspencore.org Join CORE's email list Find us on Facebook! Please consider the environment before printing this document. 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'.a,✓,.^s.r „,e- ::rte t z t r-'" ,u✓ ..w ~�`x`�.r,� a�- .�f a✓.,�' r_�' 3 ix'=";" 5 r ✓r" -�:s -:tea' �,°"a `a.,'" FT% �'c,��` ��V���r .�o i ,z` �.�E f r/c" �cx,, T✓✓a✓`°.��'�= ,$.az.�'',�.,✓.r •�t 'ra r" Pr'O[f'Z'ng C|f)Bn Energy and Energy Conservation i n Colorado's F� Strategy 5/11/2011 Tb Governor Hicken|noper and Staff, We are writing in regard to your Bottom Up Economic Development Initiative. CORE's Board, staff and partners have attended a number of county and regional meetings, and we found them productive and thoughtful. Thank you for creatively addressing Colorado's economic needs. However, du* to the size and scope of this effnrt, we found it necessary to submit a recommendation that specifically addresses economic growth through the support of efficient and clean uses ofenergy. This report is divided into five concise sections: energy efficiency and conservation, dean energy, transportation, fossil fuels, and market synergy. Significant economic potential exists in each of these areas. Your predecessor, Governor Ritter, and thousands of students, CEOs, elected officials and activists around the state have made Colorado a leader in innovative energy investment. Moreover, Colorado is blessed with a bounty of solar access and wind potential, universities, laboratories, investors, and utilities equipped to capitalize on new opportunities. The recommendations discussed in this report create financial growth and savings potential for a broad spectrum ofColoradans. Instituting progressive policy measures in support of clean energy and efficiency has a litany of domestic and international success stories. Germany's electricity Feed-In Law supporting clean energy has created a job sector that now outnumbers their famous automobile industry. Since 2009 a similar effort in Ontario, Canada has created over 2O |n Colorado, the Governor's Energy Office, the Office of Economic Development and International Trade and stakeholders around the state have brought clean tech companies to Colorado: between 2008 and 2010 the state added an estimated 4,500 new jobs in the clean energy economy. Investing in efficiency, renewab|ey and community-based transportation initiatives retains more money inthe local eoonomy, hedges against rising energy costs and fosters greater economic competitiveness for Colorado businesses. Combined, these efforts help establish Colorado as an international hub for clean energy technologies and innovation. We, and the forthcoming list of signatories, urge you to consider each of the recommendations addressed. We look forward tu your continued leadership in pursuing timely state legislation that supports clean energy, resource conservation and environmental protection. Best regards, Nathan Rat|edge Executive Director Community Office for Resource Efficiency CC: All State Senate and House Representatives DODD 0000 =3 000 0000 C3C3 1M 000 0000 =3 EB ES ED 000 0000 C3C3 ENERGY EFFICIENCY AND CONSERVATION "Energy efficiency is not just the low hanging fruit- it's the fruit laying onthe g/ound.^' —US Secretary ofEnergy Stephen Chu What's the Issue? According to a recent study published by McKinsey, the United States could reduce energy consumption bv over 20% by 2020, a reduction that would lead tn$1.2trillion in savingu.z national energy efficiency campaign would bea boon for the economy putting people back to work completing upgrades, saving property owners cash on their utility bills, and stimulating innovation and industry to6o more with less. Dollars not spent on energy costs are dollars spent improving our communities, schools, neighborhoods and businesses.3 What's happening now? Boulder Countywas one of the first jurisdictions in the countryto establish a Property Assessed Clean Energy (PACE) program. In its first two rounds in 2089 the County used its bonding authority to push over $9M in funding for home energy improvement loans. This funding went directly into the local economy, stimulating jobs and sustaining businesses during tough economic times. Every dollar loaned through PACE generated at least an additional $8.53in economic activity in Boulder County The Department of Energy (DOE) and the Governor's Energy Cr0c* (GEC) have invested millions in projects around the state to support similar efficiency efforts. Two cluster areas in Colorado --Boulder, Denver and Garfield County and Eagle, Gunnison and Pitkin Counties— are perticipating in the DC]E's Better Buildings Program. Better Buildings has provided 3'yea/ funding and technical support for communities to establish comprehensive retrofit programs. The programs are meant to test various retrofit tactics from grassroots marketing and workforce development, to financing tools, data management systems, and utility partnerships. Ultimately, the goal of these programs is to normalize efficiency improvements and transform the residential retrofit market. Progressive building codes have also mandated that energy efficiency become standard s For examp|e.Aspen/Pitkin established the Renewable Energy Mitigation Program (REK4P) in 2000 to curtail excessive household energy consumption. (See highlight box for details.) REMP has since been replicated in several juriodictions around the state. The Governor's Energy Office has also supported more progressive energy codes with grant funding, workshops, and pub|icatiune.a Legislative action such as House 8i|| 07'8137. has increased the uptake in efficiency programs asvve||. HB 07-1037 requires that Investor-Owned Utilities (IOUs) provide efficiency programs that are cost effective to their customers. Since all efficiency programs must pass a cost benefit analysis, the mandate has allowed utilities to invest in efficiency improvements without hurting their bottom line. What are the opportunities? KST Provide state and federal tax incentives for efficiency improvements. Between 2O05and 2O10. the federal government allowed taxpayers toclaim a 30% federal tax credit for efficiency improvements such as increased insulation or new windows. The tax credit decreased to10% with a cap of$5OO for 2011 and to date has not been extended past December 31st The state should lobby the federal government to continue the credit indefinitely, as it provides a huge stimulus tothe in6ustry. The state should also examine developing a state tax incentive program. Enhance building energy codes. In 2007 HB'1146 required that all communities with a building code adopt the 2003 International Energy Conservation Code (|EC(]. The state should look into expanding this provision to communities not currently captured by the 2007 legislation. Energy codes stimulate the mark*tp|ace, creating demand for efficient products 2 and materials and a more educated *orkf workforce. Fuh*rmor* |ECC published a new code in 2009, which has been adopted in several communities around the state. The state should continue educating communities about the 2009 Code and additional 'above code' training activities, particularly in places that do not currently have a code in place. REMP T' h ercew le r" rgy igab r no r (f esta l s ecl €n 000, s a con on e t of -As e l'tl n Co city ng e hat:; sWbfi lies 6 f terj r and exterior er y su ge for r c r tructi i re�J goal f t r �g ra ss to ncou e er rgy con servat r a t eff�ci icy l ever, excess cons r t c ri n rrtg le €liat.of Sri °rste e rn o;r fee Src.230, M 1� reduced ca gy cfs s a reed a fi i i solar it du ttr ar raise y r All o :the evenue ,reel std ut to the dirty i grant arch offer €r1 E has roui rrs to ndrecf; of srrlfat €or and leveraged m tons old r in c r %ct to t a ee ff c ri s racl :l E�l''ha$ l sexy L a ,y outs c tcl Ica ee itr errs d artd;.ersg rtergy. n resource; ;iron: res t�rl i ro�r(tons 11ve n estl469 In Crted rate, 31t rlt Srtrrtasllage EageorrrttTetort Co€r) rtdrtra`:iltrryd� MA y Encourage the real estate community to include efficiency improvements within the Multiple Listing Service. Consumers need to see that investing in energy efficiency pays off on the assessment of their home. The GEO should continue its work with Eco Brokers International, IRES, Metrolist, USGBC Colorado and realtor associations to establish a statewide standard that ensures the MLS accounts for efficiency improvements. The GEO should also continue to work with the Appraisal Foundation and the Appraisal Standards Board to establish clear standards for reflecting the value associated with a home's energy use. Extend Demand -Side Management (DSM) programs. The Public Utilities Commission (PUC) requires IOUs to implement cost effective efficiency programs. However, rural cooperatives and municipal utilities are currently exempt from this provision. State legislators should examine efforts to extend these programs to all utilities in the state, potentially through a public benefits charge (PBC) on utility bills or an efficiency provision placed on franchise fees. (The provision would require a percentage of all franchise fees go to local efficiency programs.) PBCs in 12 states generated $870 million in 2002/2003 and yielded nearly 2.8 million MWh in savings. At an average 0.03 /kwh saved, PBCs are a much more cost effective way to provide energy than new generation. Encourage Implementation of Energy Audit and Disclosure Ordinances. Several cities have implemented a point of sale energy disclosure requirement with various mechanisms for compliance, including incentives and fees. In 2009, Austin Energy passed an ordinance that requires buildings over 10 years old to provide proof of an energy audit prior to the sale of the property. By establishing a negotiating option at the point of sale that highlights efficiency investments, the program has enabled the City of Austin to get closer to reaching its climate action and energy conservation goals.to Financing Investments in Energy Efficiency Coloradans need greater access to capital and affordable financing in order to invest in energy efficiency. Unfortunately, the lending limits and underwriting criteria of conventional loan products (i.e. home equity loans and lines of credit) leave many homeowners, landlords, and businesses unable to access the capital needed to invest in upgrading their properties. The irony of this situation, and perhaps the greatest justification for finding solutions to the problem, is that financing efficiency improvements ultimately save the borrower money, thereby improving their ability to service debt and strengthening our collective economic condition. While the state and a handful of Colorado counties have taken measures to establish PACE financing programs (authorized under HB 08 -1350 and expanded under SB 10 -100 and HB 10- 1328), objections at the federal level have put these programs on hold. This is regrettable. Had property owners been given the ability to finance energy improvements on their property, PACE could have provided a direct and leveraged cash infusion of tens of millions of dollars into the economy, allowing property owners across the state to improve the efficiency of their properties, while creating hundreds of new jobs, primarily in the construction trades. We 3 encourage the state to pursue every effort to revive PACE as soon as possible. A r ew ri f a s Tats r d r t f t� t b) c e M trrsset c arrrsrff w r rr re �r'rast t fttrtr fisr grc, sub r ref q t r Ali r gs) (fir 1-h r� r r tJr r Terra tern two: rtr1r) wrl O f6Vid rr1 =r r;� �crr caf fcrtro,. rra T rr)): rrnf.'rrs ar fry "rri effr� afire s Sara ra ra `cam €ra ritrs Tt� rrar� i dale tae firira�rra ra):r�a�i I� fir n °4a Ufa, rrii: i RPSO Several counties across the state are actively working to develop loan programs that benefit from various types of credit enhancements. Partners include the GEO, the Colorado Housing Finance Administration (CHFA), and the private banking industry. Loan products could include a loan loss reserve or a rate buy -down fund, in order to extend more favorable terms and qualifying criteria to borrowers interested in making energy improvements to their properties. We encourage the state to continue to enhance and expand energy efficiency lending under CHFA's Colorado Credit Reserve (CCR) and Green CCR. Colorado's SB 08 -184 authorized the Colorado Clean Energy Finance Program and enabled the state treasurer to invest up to $10 million per year (over three years) to provide below market rate loans to homeowners. With these loans, home improvements for energy efficiency and renewable energy may be financed. The program is designed to be self- sustaining as it is to be funded with securities payable from loan payments. The state treasurer and the GEO should be encouraged to streamline their administrative planning efforts and roll this program out immediately. Finally, Energy Performance Contracting is a financing and implementation model that has benefited greatly from contract oversight and facilitation provided through the GEO; however, its use has been largely limited to public sector facilities. As a partnership model, we would encourage expanding the use of this concept to commercial and multi family residential sectors. 4 CLEAN ENERGY "According tr the Union of Concerned Scientists, the generation uf2D%of electricity from renewable sources tw2O2Dwill lead to the creation of4 jobs; $331 m/0/mn in income to farmers, ranchers, and rural landowners; an increase oF$15 billion /n capital investment; $62 million hn new local tax revenues; and, $Y billion /n energy savings 6v2030—`$3OO for every (Co/oradn) state nesident.^`` What's the issue? Nationally, the clean energy sector is6noming. From 2086'2008 Colorado attracted more than $600M in venture capital funding for clean energy projects. In 2007 there were 2 jobs in clean energy in Colorado; by2O18 that number ballooned to over 7 1s''14 Colorado is one of the leading states for renewable energy dove|opment, ranking in the top ten for resources, generation and jobs created. However, with the industry growing as rapidly as it is, it's important that Colorado maintains its competitive advantage by supporting progressive state policies that attract investment and jobs to the state. What's happening now? One of Colorado's best assets is its access to an established research network and highly trained workfnrco. Federal institutions such as the National Renewable Energy Laboratory (NREL) the National Institute of Standards and Technology, and the National Center for Atmospheric Research have propelled Colorado's research capabilities to one of the top in the coun1ry. Clean tech programs at the University of Colorado and Colorado State University have also groomed a workforce ready to be the next leaders in the cuuntry. Colorado ranks 3r6 in the nation for engineers and 6th in the nation for computer specia|iuts./ From transportation networks to proximity to major energy markets to good old-fashioned wind and sunshine --Colorado has it a||. The state is perfectly situated to provide materials to wind developers (the top 13 windiest states are within 750 mi|es' Moreover, Colorado ranks high for actual renewable resources at 5th and 11th in solar and wind. respectively. Is, 19 Several multinational companies have taken note and moved their operations to Colorado. The world's leading wind turbine manufacturer, Vestas opened its only plant in the United Staten in Colorado in 2007. Other global companies such as A6engoa. SMA Solar, and 8E Energy Controls have also established operations in Colorado. Po|icymakara in Colorado have put the state at the forefront ofrenewable energy generation. In 2004, voters supported a measure toestablish a mandatory Renewable Portfolio Standard (RP5) for utilities. Since then the mandate has grown from 10% to 30% of an IOU's portfolio, making it one of the more aggressive mandates in the country Policies such as this have provided investors and businesses a signal that Colorado is open and ready for clean tech business. Since 2005, Colorado's solar generation has grown one hundred-fold, from 1 K4VVin 2005 to103k4VVin2018. What are the opportunities? Actively recruit clean energy companies. There are several reasons Vestas came to Colorado; however, one oft-cited ia Colorado's leadership un clean energyz At the time, Governor Ritter was espousing the New Energy Economy in boardrooms, state capitols and conference rooms around the country. Ven1as listened, coming to Colorado despite better financial incentives from other competing states. It is vital the state dedicate human resources to recruiting 'game change/ companies like Vostas whose arrival precipitated the relocation of six of its suppliers toColorado. Make regulatory environment more amenable. The Governor's Energy Office had ahuge success in 2010 working with the Federal Energy Regulatory Commission to set up a pilot fast track process for small hydro projects. The GE{) will help 20 projects through the pilot program before starting work with FERC on an extended effort. Streamlining the regulatory process is imperative to Colorado's success with renewable generation. Several in-state developers have also acknowledged delayed transmission construction as a cletrimentto doing business in Cn|oredo.zz Working c|os*|ywithFER['thePUC'GE(Jan6uti|ities.the3tateshuu|d establish a 5 more coherent and speedy regulatory process, which prevents the lengthy delay of projects. FEED I(tl LAW A fe lam enables the rapc bsorpton of tabl rgy ote tl lr gr brc� a cag e agre rnent: etw rere able g nerat rs at electric at1464i e ge rau, a e ai a p rntc�rrt,. pace for their power, whys proyes aranee,o nertors tiat thems a secure rr ors;nvestnent :�tltes" pass a It d t rase o ca their rye base �r� €deg tai cover Abe crease c�we� Ire a�r� s �l e, sr: eari'e feed'i law refire arerrease dust per moth to Ach itarre`;lr rows to ta: aln ern °r "ed is t6csar f fobs: v i)rda -s priver, star; ecfrrr1 brass oarcts =well poa to:irjty- aei)ona rrr with this olt rrg fty� sg hrl e ffr power l ri ;rar r fan na t r l; ll o l is e �fi lip ter �i rsl� .x v. Establish robust workforce training hubs. Thanks to some of the best research facilities in the country, Colorado's workforce is well educated and excels at advanced research. However, Colorado lacks some of the specialized technicians needed to maintain and manage of some of the larger wind farms and geothermal projects in the state. State legislators should promote training opportunities close to clean tech hubs through the Colorado Renewable Energy Collaboratory (CREC) network so that companies do not need to recruit out of state. Enhance commercialization of research. For all of its advantages as a tech hub in the Rockies, Colorado ranks 20th for the number of patents in the clean energy sector 23 Colorado legislators need to help bridge the gap from the lab to Main Street. A possible solution is to extend state tax credits to companies that use technologies developed or manufactured within the state, like New Jersey's Renewable Energy Manufacturing Incentive (NJREMI) program. (See the Market Synergy section for more information.) Financing Clean Energy Investments Many concepts that support clean energy also benefit energy efficiency and vice versa. As with energy efficiency, Coloradans need access to financial resources in order to invest in clean energy projects. Colorado should continue to improve access to financial tools that enable property owners to increase their energy independence, hedge against volatility and long- term increases in utility pricing, and reduce their carbon footprint. Renewable energy systems are typically eligible to be financed with a PACE loan. This tool has proven effective in the past, and again, would benefit greatly from the state's influence in altering PACE to be a permitted financing tool under federal regulations. The Power Purchase Agreement (PPA) has proven to be another effective model for financing clean energy investments. This arrangement can be applied to various renewable energy technologies and can benefit private property owners, as well as public sector entities, such as schools and governments. The state should continue to facilitate partnerships and consider the deployment of state -owned assets for PPA's, as they are a rapid way to increase renewable energy interest and generation in Colorado. k'A iPl:E FROG M 1N;flREGC► 1 b rin ng ,n th r go epa e t o rter y eas ed as s leafier art energy a handing, w t s the °rein "off then at ner f oan f*rorn fib prrarn rs ,pelf 711) as eperis are t b borrpsver:rd loan fors are raeslg enral tgatr brt e en of 1;;pres had fnaeci re than 20, rn Ilion tha locL rer investents 4n onnrottc noter rrtrvtrvrors restentrl� energy tam its fir solar fnstallaons Tits rograrr llovt hornecrr er`o receive ce1ts tovr tir tregr tnce tape for rgolar sy�errs to tl�`r rerty �r. 6 TRANSPORTATION What's the Issue? Colorado's economic drivers are found both in its metropolitan areas and rural recreation and amenity -based communities. Mobility for this diverse workforce is critical to economic growth. For many Colorado communities, transportation energy costs are a significant portion of their cost of living. With housing costs becoming increasingly unaffordable in resort areas, it is often low- income workers who are disproportionately affected by high transportation costs. In 2008 Coloradans drove 46 billion miles, 70 percent more than in 1990 even though the state's population only grew by 16 Between 2002 and 2007, gasoline expenditures rose 86 percent in the state, causing Coloradans to spend $2.6 billion more to fuel their cars than they had just five years earlier. At the same time, transportation -based greenhouse gases increased 62 percent between 1990 and 2007 in Colorado. o a o fl What's Happening Now? Driven by convenience, safety and savings, demand for public transit is increasing. In 2008, 74 percent more Coloradans chose to ride transit than in 1991. An average commuter traveling 30 miles round trip for a full time position would save approximately $1,200 per year by transitioning to public transportation. Additionally, analysis has shown that within a given commuting zone, the growth in average net earnings are greater in rural counties with transit systems, than in rural counties without transit systems. House Bill 1331, "Incentives for Efficient Motor Vehicles," created financial incentives to help consumers purchase efficient motor vehicles. HB 1331 extends tax credits to consumers who purchase or convert vehicles that use "cutting edge" technology and petroleum reduction technology, including plug -in hybrid electric conversion technology. The bill, which extends tax credits until 2015 for most technologies, encourages consumers to consider a vehicle's air pollution score, its fuel economy, and its carbon footprint before making a vehicle purchase. What are the Opportunities? Advocate for walkable communities and bike corridors. Several areas around the country, including Boulder, CO, Charlottesville, VA and Austin, TX, have developed pedestrian walkways that bring substantial economic revival to previously underutilized areas. The state should provide additional transit funding for communities to invest in walkability measures, such as a pedestrian mall, rails to trails design and other similar efforts. Bike programs, such as Denver's Bike Sharing Program, also reduce traffic congestion and promote livability. Support regional planning organizations (RPOs) with dedicated funding. Developing independent RPOs allows for a variety of stakeholders and sectors to contribute to a comprehensive transit plan, which would provide a regional blueprint for economic growth and expansion of communities. Further, following such a blueprint provides better guidance for developing transit -ready growth, which helps reduce cost and supports Colorado's mobile workforce. Promote electric car charging stations and infrastructure. The market for electric cars is e growing rapidly. One of the greatest inhibiting factors is a lack of charging station infrastructure. Supporting the installation of charging stations would reduce fuel emissions, save drivers money and further establish Colorado as a leader in the clean tech marketplace. Encourage additional light rail services. Rail service connecting goods, services and the workforce to regional and national transport hubs is a significant opportunityto grow Colorado's economy. The Rocky Mountain Rail Authority estimates a high -speed rail network linking Fort Collins, Pueblo, Eagle County and DIA could bring $33 Billion to the state economy with new jobs, income and increased property values. Continued support of these efforts and coordination with similar federal planning efforts will ensure Colorado takes advantage of its diverse economic resources. 7 FOSSIL FUELS What's the issue? As of 2009, Colorado was the ninth largest coal producer in the US. 28 Colorado is also fortunate to have one of the largest natural gas fields in the country, the Piceance Basin. All told, the energy extraction industry in 2007 employed roughly 25,000 people, though this was largely (50 comprised of "support activities for mining. While the coal, oil and gas industries are large economic drivers for the state, Coloradans are not reaping the full economic benefit from the development of their natural resources, nor are they adequately protected from industry risks. For example, reports by Headwaters Economics and CORE's longtime Director, Randy Udall, illustrate the sizeable loopholes in Colorado's severance tax policy for the natural gas industry. 31 The tens of millions of dollars in lost annual revenue could otherwise be supporting community development or public education, for which it is primarily used in Wyoming. A myriad of other issues are also at play, including water use and water contamination from fracking and community and wildlife disruption from well pad development. Each of these scenarios presents significant negative externalities, such as the release of carcinogens into local water sources, which could easily affect the local economic livelihood. What's Happening Now? In 2010, the Clean Air -Clean Jobs Act was signed into law. The goal was to help 'clean' Colorado's energy supply and air quality. The Oil and Gas Conservation Commission was also recently expanded to include a greater diversity of members. The Commission then developed a series of new regulations addressing the location and effect of drilling rigs. Unfortunately, there is still much left to be done. As an example, a recent House Energy and Commerce Committee report "shows that 1.5 million gallons of fracking fluid containing a carcinogen were used in Colorado" between 2005 and 2009, a statistic that ranks Colorado 2nd in the country in the use of fracking contaminants. Contaminated water not only affects the health of Coloradans, but it has a deleterious effect on the state's economy. A large portion of Colorado's economy relies on tourism and its natural resources. Healthy rivers and healthy ecosystems are imperative to keeping tourism a prominent part of the economy. What Are the Opportunities? Fix the severance tax loopholes for the natural: gas industry. There are currently two major loopholes in Colorado's severance tax policy. First, the "stripper well" exemption, which requires no severance tax payment from wells that produce less than 90,000 cubic feet of natural gas per day or less; and secondly, the "ad valorem" deduction, which allows energy companies to deduct their county property taxes from their severance tax payment. Following are a few facts that illustrate the effect of these two loopholes: 33 Roughly three fourths of Colorado oil and gas wells pay no severance tax at all. In 2005, Colorado collected $132M in severance taxes. In Wyoming the same amount of production would have raised $382M, almost three times as much. In 2004, Noble Energy produced about $500M of natural gas in Weld County. They paid zero dollars in severance taxes to the State of Colorado. Analyze and re- assess potential impacts from fracking. Nationally and internationally hydraulic fracturing (fracking) has come under increased scrutiny, primarily due to the unknown and hazardous chemicals that are used and with good reason. A group of investigative journalists, ProPublica, "has documented more than 1,000 cases of water contamination near U.S. shale sites. A recent New York Times article further supports these concerns. 3 S Moreover, the recent Oscar nominated documentary, Gasland, highlighted similar water contamination complaints in Garfield County. The potential for increased fracking and increased contamination represents a huge financial uncertainty for the natural gas industry and local communities. Help small towns avoid boom /bust cycles from energy extraction. Colorado's history is riddled with stories of mining's boom /bust cycle. Whether the mining was for silver in the 1880's or natural gas today, local communities have suffered from the surge and dearth of economic resources. Some of the factors contributing to this phenomenon are out of Colorado's hands. Other factors are not. One of the most important things the state can do, for communities sited near extractive energy sources, is to help create a diversified economy, which includes protecting natural resource and public lands for hunting, fishing, ranching and recreational activities. MARKET SYNERGY What's the Issue? Several of Colorado's largest economic sectors have benefited from growing the clean energy economy. Improving the way Colorado uses energy helps protect the natural resources that attract tourists. Supporting progressive energy policies inspires confidence in renewable energy service companies considering expansion or looking for a place to gain footing in a rapidly expanding market. Likewise, making Colorado a hub of clean tech research and development strengthens the universities and workforce to deliver higher paying jobs and professional careers. What Are the Opportunities? Manufacturing In order to reduce imports and increase exports, Colorado should focus efforts on developing Wd products for which a local or regional market exists, such as wind and solar energy technologies. A good example of a successful program is New Jersey's Renewable Energy Manufacturing Incentive (NJREMI), which provides rebates to New Jersey residents, businesses, local governments, and non- profit organizations that purchase and install solar panels, inverters, and racking systems manufactured in New Jersey. In order to qualify as a certified New Jersey manufacturer under this program, companies must supply products manufactured with at least 50 percent of the product cost— including the labor, overhead, components, and raw materials from facilities located in New Jersey. The Program's economic development impact is two- fold: first, incentivizing private investments in renewable energy technologies (creating jobs for system installers, electricians, and engineers), and secondly, helping to establish a market for clean energy products manufactured in the state (creating manufacturing jobs). Higher Education Colorado should continue to invest in businesses and institutions that build our intellectual capital. We should take advantage of the opportunity to create and fill new professional level jobs with talented scientists and executives being trained in the state's numerous energy related higher education programs, as well as at the National Renewable Energy Lab (NREL). Governor Ritter developed the Colorado Renewable Energy Collaboratory (CREC) to build on the individual merits and developments being made at the Colorado School of Mines, CSU and CU. The Collaboratory's key goals are to create private public research relationships that provide rapid transfer of technology to the marketplace. As such, the center is not only grooming some of the best minds in the field, but also garnering financial interest from companies worldwide to invest in Colorado. Although Colorado's budget is strained, maintaining funding for higher education is absolutely essential to develop the state's capacity in the energy sector and remain competitive in national and international markets. Tourism Based on 2007 data, the Colorado Tourism Office (CTO) estimates that approximately 200,000 jobs, $9.8 billion in visitor spending, and $763 million in state and local taxes are attributable to the tourism industry. While the industry benefits from a diverse mix of cultural and recreational attractions for visitors across the state, it is well known that outdoor recreational activities represent a significant draw for visitors. Whether it's skiing, hunting, fishing, cycling or camping, a healthy natural environment, including the production of clean energy, is a major economic asset to our state. As such, Colorado, its municipalities, the CTO and tourism partners should continually and consistently tout the many efforts aimed at protecting our natural resources and preserving vibrant ecosystems throughout the state. Given the numerous statewide efforts to protect the health of our natural environment, whether establishing conservation funds, spearheading clean energy technologies, or improving our mass transit infrastructure, Colorado has an opportunity to claim a niche as a sustainability- oriented tourism destination. Aspen Skiing Company, as an example, has successfully used their energy and environmental commitments in national marketing campaigns. E�ITK[E CO JP XS HEALTHY tiI S A fi7 51 S.FU Akrs fed fiorr rs cr s re` =:t s iii X00 t� i f p as of 0 t iatea tsiit ier trrs.aid i. t t drat f ve tei° dtt t tr j rrr Cirri stirs fd p rtstsr q i e s, r j attc rs l t sr rt r xym, rid rr a r ara to it rt t aar r€ pe r "trfsd died rs water crsvattr adtatrj. °stl itbrere 5 sts a s t t has p rat apfi sr 00 dear pros t tf e tss rsat i i res ist i rep t 'se Overall, the market synergies realized when sustainable energy policy is applied among the manufacturing, education and tourism sectors demonstrates how a shared commitment to a clean energy future can help us collectively increase the state's economic potential. As noted, continuing our commitment to growing clean energy investments will bring complementary growth to some of our largest industries. Additionally, we have a substantial interest in preserving the quality and beauty of our natural environment, arguably the lifeblood of our state economy. Changing course now would be a detriment to the physical and economic health, safety and welfare of all Coloradans. CONCLUSION Colorado experienced an 18% growth in clean tech jobs from 1998 to 2007 even as the industry was just gaining a foothold nationally. As the clean tech sector grows —which it inevitably will as technologies improve, alternative energy prices fall and carbon mandates are implemented —it is imperative Colorado remain a leading state in the industry. By continually developing progressive policies, Colorado will encourage greater industry investment and ensure Colorado's inclusion in the clean tech market. The state must not abandon its support of the Governor's Energy Office and the agency's mission to advocate for energy efficiency and renewable energy. The GEO has played an integral role in elevating Colorado to its leadership position and will continue to provide critical support. By promoting the adoption of progressive energy legislation, the GEO helped attract $30 million in Better Buildings funding from the Department of Energy. CORE and its regional partners urge Governor Hickenlooper to provide dedicated, long term funding to ensure this agency remains fully staffed. Furthermore, we ask Governor Hickenlooper to consider the implications of climate change when developing Colorado's future economic strategy. According to a recently published American Security Project report, Colorado will incur increased economic stresses due to climate change. 37 These effects should not and cannot be ignored as we plan for the future of our state. Just as Colorado has thus far benefited from being a leader in the clean tech sector, it will reap rewards from leading on innovative carbon reduction policies as well. Moreover, implementing additional clean energy and efficiency strategies will protect natural habitats, secure clean air and clean water, and benefit public health. Most importantly, we encourage Governor Hickenlooper to look at our energy and environmental situation through an honest and realistic lens, with a sense of opportunity an opportunity to protect our cherished heritage and natural assets, an opportunityto spur technological innovation, an opportunity to improve the lives of residents throughout the state, and an opportunity to grow Colorado's economy through the support of new, sustainable industry sectors. 10 FOOTNOTES 1. Department of Energy Press Release. 2009. DOE to Fund up to $445 Million for Retrofit Ramp Ups in Energy Efficiency. 2. McKinsey and Company. 2009. Unlocking energy efficiency in the US economy. 3. Environment Northeast. 2009. Energy Efficiency: Engine of Economic Growth. 4. National Renewable Energy Laboratory. 2010. Property Assessed Clean Energy (PACE) and Economic Impacts in Boulder County. 5. Southwest Energy Efficiency Project. 2003. Increasing energy efficiency in new buildings in the Southwest: Energy codes and best practices. 6. Governor's Energy Office. 2010. www.rechargecolorado.com 7. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses, and Investments across America. 8. American Council for an Energy Efficient Economy. 2004. Five Years In: An Examination of the first half decade of public benefits energy efficiency programs. 9. ACEEE. 2010. Opportunities for increasing the penetration of energy efficiency by leveraging the resources of local governments. 10. Austin Energy. www.austinenergy.com 11. American Security Project. 2010. "Pay now or pay later: Colorado." 12. Pew Center for the States. 2009. The Clean Energy Economy. Repowering Jobs, Businesses and Investments across America. 13. ]bid. 14. The Energy Foundation. 2011. A Blueprint for a New Energy Economy. 15. Colorado Cleantech Industry Association(CCIA). 2010. Colorado Cleantech Action Plan: A roadmap to guide the development of Colorado's clean technology industry. 16. National Science Foundation. 2009. "Science and Engineering State Profiles." 17. Pacific Northwest Laboratory. August 1991. "An Assessment of the Available Windy Land Area and Wind Energy Potential in the Contiguous United States Navigant analysis. 18. NREL. 2008. "Center to Research New Ways to Convert Sunshine to Power and Fuels." 19. Vallin, G. 2010. "Colorado- A leader in Wind Energy." Renewable Energy World. 20. The Energy Foundation. 2011. A Blueprint for a New Energy Economy. 21. The Energy Foundation. 2011. A Blueprint for a New Energy Economy. 22. CCIA. 2010. Colorado Cleantech Action Plan. 23. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses and Investments across America. 24. CoPIRG Foundation. 2010. Colorado's Transportation Crossroads: Priority Transit Projects for the 21st Century. 25. Denver Regional Council of Governments. RideArrangers' Commuter Savings Calculator 26. CoPIRG Foundation. 2010. Colorado's Transportation Crossroads: Priority Transit Projects for the 21st Century. 27. Rocky Mountain Rail Authority. 2010. High -Speed Rail Feasibility Study. 28 National Mining Association. 2010. U.S. Coal Production by State and by Rank. 29. Corporation for a Skilled Workforce. 2009. Industry Guidebook: Energy Extraction. 30. Headwaters Economics. 2011. Fossil Fuel Extraction and Western Economies. 31. Udall, Randy. 2007. "Torched and Burned: Why Does Colorado Subsidize the World's Most Profitable Industry." Community Office for Resource Efficiency. 32. Sherry, Allison. 2011. "Colorado No. 2 in Carcinogen -laced 'fracking' fluids." Denver Post. 31 Udall, Randy. 2007. "Torched and Burned: Why Does Colorado Subsidize the World's Most Profitable Industry." Community Office for Resource Efficiency. 34. Schiller, Ben. 2011. "Fracking Comes to Europe, Sparking Rising Controversy." Yale Environment 360. 35. Revkin, Andew. 2011 "Study Links Flammable Gas in Water and Nearby Drilling." New York Times. 36. Pew Center on the States. 2009. The Clean Energy Economy: Repowering Jobs, Businesses and Investments across America. 37. American Security Project. 2011. Pay Now, Pay Later: Colorado. 11 t s :u :5�-� err" z' mss. S sL�-„ s `z z 5 z c r �rt`.'"' s ,.?Y "�,�,.FS�;fv '�'rx� s`z ��,,:s�.,,� -sue �'z"�'S `�`r'.,;^�' �,r s �.Tr"" r `-s r`� ,.,-r ,r...✓ z�,K, r �.�x•, r ..z �.r .cam n^- ..�'z s -t`"�4 sue r^` �v w�^ --->G ..,z%�^ �s' z� `�'.���r`�`~�'w^��r" ^�r�.,'��/` �z3 �i4", c u .�'r��' �.��,'��s�`��� t.'�SC. �'����a�;�� -,zs- �z„ ^�����r'`�Y�'a� �s,^:� �'��.,..�t' ,:.�r������� 3. 3� t �.•�g'z"- _'r�`-'�'"'� "�,�c �""s ��5 ,cti.�s� Vii`''' a c� r �r,�'�c fir,- r "r' .3; yws K Ih' �k r r< ettf<t a r`;. 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