Article,  Hydro Law

Colorado State Representative Hugh McKean on Passing Legislation to Designate Pumped Hydropower as Renewable

As of April 2021, energy generated by pumped hydroelectric facilities in Colorado counts as renewable under state energy standards. Governor Jared Polis, a Democrat, made the change official when he signed into law a bill sponsored by two Republicans, State Representative Hugh McKean and State Senator Rob Woodward. The new law will apply to energy generated by facilities that produce less than 15 megawatts (MW), are not located on natural flowing waterways, and do not rely on fossil fuel generation to pump water. In this interview, we speak with Representative McKean, the leader of the Republicans in the Colorado House, about the motivation behind his bill; how he gathered input from all interested parties, including environmental groups; and how he built bipartisan support for the change. 

Hydro Leader: Please tell us about your background and how you came to be in your current role. 

Representative McKean: I grew up farming in northern Missouri as one of three kids. We had to figure out how to fix stuff, and a lot of what I’m doing now grows out of that practical side of things—having to figure things out and apply common sense. Today, I am the state representative for Colorado’s House District 51, which centers on Loveland, Colorado. A lot of my energy focus comes from that fact that Loveland is one of four cities in northern Colorado that owns its own power utility. Over the years, I’ve managed to spend a lot of time talking about hydro, solar, and wind. We actually have one of the cleanest coal-fired power plants anywhere in the Northern Hemisphere. I am fascinated by it and have spent some time in our control room, understanding what the power curve looks like and what the demand and generation side looks like. I got deeply involved in that. I’m currently part of the National Renewable Energy Laboratory’s Energy Executive Leadership Program. 

Hydro Leader: What was the problem that you were trying to address with your new bill? 

Representative McKean: As I started getting deeper into the state statutory requirements for renewable energy, I became interested in what was counted as renewable and recycled energy and what did not. I heard from people that hydroelectricity was not considered true renewable energy because it is produced by a one-way passage of water. As I learned more, I found out that that was not exactly true. There is a distinction between pass-through resources like conventional hydroelectricity and recycled energy resources, such as heat energy harvested off exhaust stacks. It occurred to me that we had never included pump hydro as a recycled energy resource.

Last year, I started thinking about introducing a bill on the topic, and I found out that the same kind of bill had been unsuccessfully run at least three times before. Part of the reason it failed was because there was a natural opposition from folks on the environmental side of things to something that might encourage the construction of more dams and reservoirs. Also, the energy to pump the water to the upper reservoir usually came from fossil-fuel-driven resources, which conflicted with the idea of pumped hydro as a green resource. 

In early February, we had a severe cold wave across large parts of the United States. Everybody knows about how that affected Texas. In Texas, nuclear facilities were taken offline because their safety valves were not operational, and a whole lot of power generation in Texas was shunted to combined-cycle natural gas and natural gas direct-turbine systems, resulting in a huge demand on natural gas for a period of time. Natural gas is one of our backup sources, especially when it gets cold and the wind isn’t blowing and the sun hasn’t been shining. We were faced with the question of whether we would be able to get enough natural gas at a spot price that made sense for our customers. That made me realize that we needed another source and that pumped hydro was the ideal solution—a giant water battery that is available when it needs to be used. 

Most people who understand pumped hydro know that it’s more of an economic driver than it is a renewable energy driver. You generate electricity during the day to sell at the highest market price by running water from an upper reservoir into an empty lower reservoir. At night, when the spot price is inexpensive, you pump that water back up to the upper reservoir. It represents an enormous source of stored energy that you can call on quickly; you can ramp it within minutes to its full output. By contrast, nuclear and coal have long lag times, and natural gas has a moderate lag time. If you have a demand side that is pulling more power than you’re offering and you want to maintain your cycles, you need an energy source that you can draw on almost immediately, and this is it. 

Hydro Leader: Would you summarize the changes made by your new bill? 

Representative McKean: HB 21‑1052 creates a renewable/ recycled energy portfolio credit for pump hydro facilities that have a nameplate rating of less than 15 MW, are not located on a natural waterway, protect wildlife resources, and do not use fossil fuels to operate the lifting pumps. 

Hydro Leader: How much existing pumped hydro is there in Colorado, and was your new legislation intended more to support existing pump storage or to encourage the development of additional facilities? 

Representative McKean: Right now, we have several sources of pumped hydro, most owned by investor-owned utilities. There are some historic structures owned by those utilities that are not really used, partly because the generation to pump the water uphill was dependent on fossil fuel resources, and as long as there were other resources available, it made better sense to do that. To keep them offline was often a maintenance cost issue, so it didn’t really matter. Now they will be considered renewable or recycled energy sources, so they will count toward the renewable energy portfolio requirements. 

Really, this bill applies to every single system we could possibly have. That means existing projects that are not used much at present, planned projects, and existing facilities that could be converted into pumped hydro facilities. 

Another change is that, heretofore, we have not had an energy source other than fossil fuels to pump the water back at night. With the amount of wind power that has come on in the last 10 years, we now have a source of energy that at night is currently being dumped on the market for almost nothing and could be used to pump this water into the upper reservoir and store it for future use. 

Hydro Leader: Are there any efforts to expand the scope of this designation to encompass power from more conventional pass-through hydro dams or larger pumped hydro dams? 

Representative McKean: Not yet. I think that the legislation has to prove itself. Can we make sure that pumped hydro on

XCel Energy's Cabin Creek pump hydro unit, located about 35 miles west of Denver.

these smaller scales is rampable and practical? Is it a resource that effectively helps with the portfolio of renewable and recyclable energy? The bigger conversation will have to be, “Are we going to be in the business of trying to find ways to use this on a larger scale, or are we just going to use it in the ancillary ways that we do today?” This particular law is aimed at smaller units that could be used today or within the next 10 years or so. We are thinking about units that are small enough in scale to meet all the environmental mitigation measures included in the bill—that they are not located on a naturally flowing waterway, that we take efforts not to affect wildlife or fish stocks, and that we do not use fossil fuels to pump the water. Those are things that will have to be figured out on the practical side. The perfect way to do that is to take something small scale and make sure that our idea is going to work in reality. As good as it might sound to us in theory, we’ve got to make sure it’s actually going to work in the field. 

Hydro Leader: Please tell us about the experience of building bipartisan support for this bill and getting it passed. 

Representative McKean: I laugh a little bit about the fact that this is an instance in which Republicans are saying that renewable and recycled energy is really important. I think that makes this a seminal moment in expanding the conversation on renewable energy beyond where it has historically been. Part of our success is due to the fact that we had to reach out to some of the environmental groups, including Colorado Conservation and Trout Unlimited, to ask, “What is it that made this bill fail in the past? What do you need to see? How can we mitigate these concerns?” We found that the people on the other side were willing to say, “We just haven’t been engaged in the conversation, and we’re delighted to come and talk about what we’d like to see.” Bluntly put, everything they asked for made sense. Asking for their input didn’t cripple the effort; I think it was something that actually made the bill better and avoided some of the public perception concerns that have arisen in the past. When we got into committee, we made sure that everybody had a chance to see the bill. We came out of committee and worked on amendments to make sure all those concerns were addressed; then we went back and passed it. I think the vote was unanimous, and when it got to the governor’s desk, he was thrilled to sign it. 

Hydro Leader: Would you provide a little bit of context about what the situation is in other states and whether similar measures have passed elsewhere? 

Representative McKean: I didn’t spend a lot of time trying to find examples in other states because I thought our case was compelling enough that even if we were the first, we ought to be the first. Colorado is a headwater state—there is no inflow to the state whatsoever. That means we have to use every bit of the resource we have in the state, whether for beneficial use or for its ancillary purposes. That’s exactly what this represents. I can’t speak for other states, because I’m a Colorado state representative, but we have heard from other folks that they’d like to take a deeper look at our bill. We know that there’s a lot of interest, and I think that interest is timely. In this moment, everyone is trying to find better and more productive ways of generating carbon-free electricity. If we can show that this is not only effective but practical, that’s huge. 

Hydro Leader: Are there any federal restrictions on energy designation that you would also like to see changed? 

Representative McKean: I actually think that this is part of that bigger conversation. Personally, I am an advocate for an all-of-the-above energy policy. As I said, my utility has an incredibly clean coal-fired power plant. A lot of people don’t like to hear that there are people who advocate for all energy resources, including coal. But that plant is a paid-for asset; my interest is in using it to the end of its life, and then asking if we can bring on things like natural gas, solar, and wind. We will probably do that over a more expansive period of time than the one that is often envisioned politically, but we will do it in a way that makes sense. Our goal here is not to advance an agenda but to help our utilities serve their customers in a way that gives them reliable, inexpensive energy. The best watchword we can have is, “How can we serve our residents better? How can we give them reliable, inexpensive energy in a way that is durable over time?” 

Hydro Leader: What advice would you have for legislators in other states looking to pass legislation like yours? 

Representative McKean: Talk to everyone. Invite in the energy companies, invite anyone who will sit down, and talk freely about what is best for your constituents. I truly think we do our best work when we focus on asking, “How does this help a family that sits down every night to figure out how to pay the bills? How does this help them maintain inexpensive energy? How does this make sure they have options available to them?” My utility actually asked us to reduce our consumption because of the natural gas station in February. I said in a speech I gave to the House that we do not want to trade the 21st century for the oil lamps of the 18th century just because we didn’t manage our resources well. 

Hugh McKean represents House District 51 in the Colorado House of Representatives. He can be contacted at hugh.mckean.house@state.co.us or at (303) 866‑2947