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Xcel Energy Inc (XEL), SunPower Corporation (SPWR): Could Renewable Energy Lead to a 51st State?

North Dakota, South Dakota. North Carolina, South Carolina. For heaven’s sake — the North and the South. Americans sure do seem to like splitting up their states, and out in Colorado, some folks are talking about doing it again.

The reason some Coloradans want to split up their state is as old as America itself — a distant government coming up with grand plans that it thinks are pretty keen, and telling the locals to pay for them.

According to news reports, there are at least three big reasons some residents of Colorado’s Weld, Morgan, Logan, Sedgwick, Phillips, Washington, Yuma, and Kit Carson counties are considering leaving the fold. Some complain of new laws that would regulate how farmers raise their livestock. Others cite tightened state gun-control requirements in the wake of last year’s Aurora shooting. But the one thing that really seems to be putting a burr under folks’ saddles is a law just passed, that requires rural electric cooperatives in the state (the would-be seceders are predominantly rural communities) to get 20% of their power from “renewable resources” by 2020.

Dubbed the “Setting Renewable Energy Standards for Rural Colorado” law, this would double the previous target for renewables. According to local Weld County paper The Greely Tribune , it could cost consumers in the affected counties as much as $3 billion in higher electric bills.

Xcel Energy Inc (NYSE:XEL)

Schadenfreude’s in season
Not everyone’s opposed to the law, necessarily. For example, Xcel Energy Inc (NYSE:XEL) is already working to expand its portfolio of wind-generated power in the state, and two years ago, it put into operation a 19-megawatt solar farm in cooperation with SunPower Corporation (NASDAQ:SPWR). As a so-called “investor-owned utility,” Xcel is already subject to a target of 30% renewables use by 2020 — so a law making its rural rivals hit a 20% target probably didn’t upset Xcel all that much.

But Republican lawmakers in the state beg to differ. State Sen. Greg Brophy, for example, called the law “callous” and criticized it for imposing as much as a 2% annual increase in electricity rates upon rural taxpayers. “Utility bills will now increase on the very people who can least afford it,” said the senator.

Republican Rep. Cory Gardner of Yuma, Colo., echoed the sentiment: “The people of rural Colorado are mad, and they have every right to be. … I don’t blame people one bit for feeling attacked and unrepresented by the leaders in our state.”

“The stupidest thing I’ve seen in a long time.”
But isn’t talk of secession a bit of an overreaction? Especially when you consider that by capping electric rate increases at 2%, the law’s basically saying rate payers can expect their average monthly electric bill to rise from $68.32 all the way up to … $69.69? Larimer County Commissioner Steve Johnson isn’t convinced. (Actually, his exact words were: “This is the stupidest thing I’ve seen in a long time. … It’s hard to believe that this isn’t the dumbest thing I’ve heard of, certainly for this year.”)

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