Colorado’s cruel approach to energy policy

February 25, 2014 by Amy · Comments Off
Filed under: New Energy Economy, preferred energy, renewable energy, solar energy, wind energy 

By Amy Oliver Cooke

“Giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun,” wrote environmental doomsday prophet Dr. Paul Ehrlich in 1975.

That’s a cruel statement directed at people who simply want electric lights so their children can read at night, a refrigerator to keep food from spoiling, or a heater to keep their homes warm during the winter.

Yet it seems to be the approach of Colorado’s environmental Left. Part of the problem is progressive leaders’ extremely narrow definition of “clean” energy that limits resource choices to more costly and unreliable wind and solar.

In 2004, Colorado voters approved Amendment 37, requiring Xcel Energy and other investor-owned utilities to use preferred sources such as wind and solar for 10 percent of the electricity sold to end users.

Since then the Colorado legislature has mandated increases in the renewable (or preferred) energy standard, from 10 to 20 to the current 30 percent by 2020. Only Maine (40 percent by 2017) and California (33 percent by 2020) have more aggressive mandates. They also have higher electric rates than Colorado.

Last year the state legislature passed SB 252, a 20 percent preferred energy standard on Colorado’s rural electric cooperatives. Now nearly the entire state must pay for a significant percentage of electricity produced predominantly from preferred “clean” sources wind and solar.

Since producing electricity from wind and solar is more expensive, Colorado’s electric rates have gone up along with the legislature’s mandates.

Not too long ago, our state enjoyed some of the cheapest electricity in the United States. In 2000, Colorado’s residential rates were 7.31 per kWh, equivalent to 9.89 cents in 2013 dollars. Instead, Coloradans now pay 11.91 cents per kWh for residential electricity, the highest rate in the Mountain West. California, Alaska, and Hawaii are the only Western states with higher residential rates.

Colorado’s electric rates are rising significantly faster than in most states. Last year rates across the U.S. increased on average 2.4 percent, compared to a 4.5 percent jump here.

These high rates couldn’t come at a worse time. Just this week the Denver Post reported that Colorado’s labor participation rate has fallen 6 percentage points since 2006, to its lowest level (67.3 percent) since 1976.

In addition, the number of Coloradans obtaining assistance from food stamps continues to mark all-time high numbers, Complete Colorado reports.

The second week of February saw a 42 percent increase in Coloradans asking government for help paying their heating bills, according to 9News.

The state legislature had an opportunity to modestly improve the situation. Rep. Lori Saine’s (R-Weld County) HB 1138 would have expanded the definition of “clean” energy to include hydroelectricity.

Under HB1138 many electric co-ops that serve Colorado’s rural communities could have met or at least come close to meeting SB 252’s increased mandate. Without the expanded definition, some co-ops will need to build additional capacity and expensive transmission lines, or purchase renewable energy credits from other providers. Some of Colorado’s poorest counties will bear the costs.

Despite HB1138’s bipartisan sponsorship, lobbying from the wind and solar industries and their advocates in the environmental non-profit world doomed the bill in committee.

Progressive state lawmakers’ definition of clean energy is also unique. Many states, including those in the eco-friendly Pacific Northwest, the Center for American Progress, the Environmental Protection Agency, and our own Colorado Energy Office all consider hydro to be a clean, renewable source.

Our state’s extremely narrow definition of clean energy begs the question of whether progressive lawmakers simply seek to protect the wind and solar industry at the expense of ratepayers.

A 2012 Independence Institute study showed Xcel Energy ratepayers spent $343 million to comply with the preferred energy mandate, much of which ended up as surplus because supply exceeded demand. That’s $245 per ratepayer, nearly two months of average Colorado electricity bills, for electricity they didn’t use.

Affordable power is not mutually exclusive of clean power. Colorado should expand the definition of clean resources to include clean coal, natural gas, hydroelectric, and nuclear. We also should encourage a least cost principle and let consumers decide.

Anything else is just cruel.

This opinion editorial appeared originally in the Greeley Tribune on February 20, 2014.

Print Friendly

Coloradans can’t rely on subsidy-dependent wind energy

February 17, 2014 by michael · Comments Off
Filed under: renewable energy, wind energy 

This op-ed first appeared in the Greeley Tribune

Coloradans can’t rely on subsidy-dependent wind energy


By Michael Sandoval

When Coloradans flip on their lights or crank up their heat, they expect their electricity to be affordable, and at the very least, reliable. But the state Legislature and Gov. John Hickenlooper are forcing the opposite on Colorado — expensive and unreliable wind energy.

The wind lobby today is one of the fattest hogs at the corporate welfare trough. Rather than win customers through good prices and reliable products, the wind lobby uses political clout to force consumers to purchase its overpriced services. Currently, a state law requires that 12 percent of the state’s electricity be generated by so-called “green” energy. That mandate increases to 20 percent next year, and will jump to 30 percent by 2020 for investor-owned utilities. Senate Bill 252, signed by the governor last year, imposes a 20 percent mandate on rural cooperative electric associations. These jumps will only increase the cost of electricity.

icon_op_edThe wind industry is “green” in the sense that it lines its pockets with taxpayer subsidies. The federal $12 billion wind production tax credit was increased to 2.3 cents per kilowatt-hour in 2013. Although Congress decided not to renew this particular form of corporate welfare, the Obama administration has decided to keep the welfare money flowing anyway. The Internal Revenue Service issued guidance that allowed projects under construction and generating electricity by Jan. 1, 2016, to also claim the tax credit, which lasts for 10 years.

How dependent is the wind industry on government subsidies? American Wind Energy Association CEO Tom Kiernan pointed to the steep declines in wind capacity installations when the production tax credit is allowed to lapse, as it was briefly at the end of 2012. Last year, total available wind energy output decreased 92 percent.

In other words, almost all the wind power construction today exists only because of taxpayer subsidies. Because the wind lobby has become addicted to corporate welfare, the wind welfare companies have failed to make the technological advances, which make wind power competitive in a free market. It’s easier to lobby Washington to get money extracted from the taxpayers, and to lobby Denver to force consumers to buy your product.

Besides being expensive, wind power is unreliable, as demonstrated by a near-record demand in Texas for home heating in early January, which put a strain on that state’s power grid. The Electric Reliability Council of Texas noted that planned maintenance and unexpected weather-related outages of power plants elsewhere nearly brought on rotating outages.

Proponents declared triumphantly that wind had saved the Texas grid. But in reality, wind had failed.

Put simply, wind energy was unable to fill the gap created by a sudden increase in demand from the cold and the drop in capacity due to the scheduled and unscheduled outages that occurred the morning of Jan. 6. Just as the state experienced a spike in overall energy demand, wind power began to plummet, according to analysis of the council’s data by the Independence Institute.

That morning, wind output fell below 20 percent of maximum capacity by 7 a.m., just as the other power plants went offline. As a percentage of council’s total output, wind fell to below 10 percent and remained there until 11 p.m.

The Institute for Energy Research confirmed that a mere 3.2 percent of the energy supplied to the Texas grid covered by council came from wind. At the moment Texas residents needed reliable power the most, 83 percent of Texas’ wind turbines were unavailable “during peak demand.”

The only thing that saved Texas that day was importing nearly 1,000 megawatts from the eastern power grid and Mexico.

The Comanche Peak 1 nuclear plant fell to 72 percent of capacity on Jan 6. Meanwhile, actual wind output in Texas failed to reach 70 percent during any one hour, and remained below 50 percent in at least 20 of the 24 hours that day.

So when the winter chill hit Texas residents, wind power nearly left them out in the cold. Coloradans would be wise to not endanger their safety in their homes, and their pocketbooks, by forced reliance on an intermittent, subsidy-dependent power source.

Michael Sandoval is an energy policy analyst for the Independence Institute, a free market think tank in Denver.

Print Friendly

Fried Birds: Green Energy Involves Tradeoffs Too

February 17, 2014 by michael · Comments Off
Filed under: renewable energy, solar energy 

The Ivanpah solar plant went online last week, but the cost to wildlife–particularly birds–won’t be known for at least two more years.

Reports that the giant solar thermal array featuring more than 300,000 reflective panels and steam-driven turbine towers have been “killing and singeing” birds by heating the air to around 1,000 degrees Fahrenheit near the towers, according to reports.

You can view pictures of the deceased birds here.

All power sources involve tradeoffs, but to date, wind and solar have generally avoided discussing the topic, often quickly shifting to pointing out the costs of other energy sources in defending their own environmental impacts.

Policy directives aimed to support the technologies often override such environmental concerns, as they did with Ivanpah:

Ivanpah can be seen as a success story and a cautionary tale, highlighting the inevitable trade-offs between the need for cleaner power and the loss of fragile, open land. The California Energy Commission concluded that while the solar plant would impose “significant impacts on the environment … the benefits the project would provide override those impacts.”

The plant’s effects on birds is the subject of a current two-year study.

But the cost of electricity from solar sources is and will remain higher than other natural resources, like coal, for the foreseeable future, according to the Energy Information Administration:

The Energy Information Administration says that it will cost new solar thermal plants 161 percent more to generate one megawatt hour of power than it costs a coal plant to do in 2018 — despite the costs of solar power being driven downward.

On average, conventional coal plants cost $100 to make one megawatt hour, while solar thermal plants cost $261 for the same amount of power. This data, however, does not take into account the impact of federal, state or local subsidies and mandates on power costs.

The solar thermal installation built by BrightSource Energy received at $1.6 billion loan guarantee from the Department of Energy in 2011. That loan was secured in no small part due to political connections, according to The Heritage Foundation.

Higher electricity costs as a result of policy directives and crony capitalism, something the Solar Energy Industries Association was readily willing to admit:

Resch said a key issue for the industry will be maintaining government policies that encourage development, including tax credits for solar projects that are set to expire in 2016 and government loan guarantees. “The direct result of these policies is projects like Ivanpah,” he said.

Once again, however, the claim that solar energy is a “free” or “no cost” energy source has been upended. Another BrightSource project is receiving similar concerns:

In response to BrightSource’s blueprint for its second big solar farm in Riverside County, near Joshua Tree National Park, biologists working for the U.S. Fish and Wildlife Service told state regulators that they were concerned that heat produced by the project could kill golden eagles and other protected species.

“We’re trying to figure out how big the problem is and what we can do to minimize bird mortalities,” said Eric Davis, assistant regional director for migratory birds at the federal agency’s Sacramento office. “When you have new technologies, you don’t know what the impacts are going to be.”

Ivanpah may be the first large utility-scale solar thermal installation in California, and also the last:

Though Ivanpah is an engineering marvel, experts doubt more plants like it will be built in California. Other solar technologies are now far cheaper than solar thermal, federal guarantees for renewable energy projects have dried up, and natural gas-fired plants are much cheaper to build.

That means the private sector must fill the gap at a time when building a natural-gas fired power plant costs about $1,000 per megawatt, a fraction of the $5,500 per megawatt that Ivanpah cost.

“Our job was to kickstart the demonstration of these different technologies,” Energy Secretary Ernest Moniz said in an interview high up on one of the plant’s three towers.

The plant is projected to produce approximately 380 megawatts “during the peak hours of the day,” according to BrightSource.

A technology that costs 5.5 times more to build and that delivers electricity that is 161 percent more expensive than coal, and that secures it’s funding through political connections is not the job of the Department of Energy–or taxpayers’ dollars–nor to “kickstart the demonstration of these different technologies.”

Not when it produces just 0.24 percent of the electricity in the United States in November 2013, according to the EIA.

Print Friendly

CO electric rates rise along with increase in preferred energy mandate

February 7, 2014 by Amy · Comments Off
Filed under: New Energy Economy, renewable energy, solar energy, wind energy 

In 1999 Colorado enjoyed some of the lowest electricity rates in the United States and the Mountain West. In 2004, Colorado voters approved Amendment 37, requiring investor owned utilities to provide 10 percent of the electricity sold to end users to come from the preferred sources wind and solar.

Since 2004, the Colorado state legislature has mandated increases in the renewable portfolio standard, more appropriately titled the preferred energy standard, from 10 to 20 to the current 30 percent by 2020. Only Maine (40 percent by 2017) and California (33 percent by 2020) have more aggressive mandates, and they also have higher electric rates than Colorado.

Last year the state legislature passed a 20 percent preferred portfolio standard on Colorado’s rural electric cooperatives.

As the mandate to produce more electricity from wind and solar has increased so have Colorado’s electricity rates.

  • In 1999 Colorado’s electric rates were 5.9 cents per Kilowatt hour (kWh) and were the 18th least expensive in the country.
  • In the 1990s Colorado’s population increased by 30 percent, electricity demand grew 26 percent, yet real prices fell 25 percent in the same period.
  • If electric rates simply kept pace with inflation, Coloradans would have paid 8.4 cents per kWh in 2013 instead of 9.83 cents per kWh.
  • In 2000, Colorado’s residential rates were 7.31 per kWh; adjusting for inflation that’s the equivalent of 9.89 cents in 2013. Instead Coloradans now pay 11.91 cents per kWh for residential electricity.
  • Colorado’s current electric rate for all sectors is 9.83 cents per kWh, nearly 7 percent higher than the Mountain West average of 9.21 cents per kWh.
  • Colorado’s electric rates increased 4.5 percent last year while U.S. electric rates increased only 2.4 percent last year.
  • At 11.91 cents per kWh, Colorado has the highest residential rates in the Mountain West.
  • Colorado residential electric rates are the 20th highest in the nation, with California, Alaska, and Hawaii being the only western states with higher residential rates.

Most information available at the U.S. Energy Information Administration, Table of “Average Retail Price of Electricity to Ultimate Customer by End-Use Sector.”

Print Friendly

HB 1113 Testimony, Bill Voted Down 8-5

January 31, 2014 by michael · Comments Off
Filed under: Legal, renewable energy, solar energy, wind energy 

Valerie Richardson of The Colorado Observer provides background on HB 1113’s 8-5 defeat in committee, as well as other efforts to deal with last year’s SB 252 impact on rural Colorado.


Full text of testimony presented by the Independence Institute:

Testimony on behalf of

HB 1113 Electric Renewable Energy Standard Reduction, Room 0112

January 30, 2014

House Transportation and Energy Committee

Mr. Chairman and Members of the Committee,

My name is Michael Sandoval. I am an Energy Policy Analyst and Investigative Reporter for the Energy Policy Center at the Independence Institute.

Thank you for allowing me the opportunity to testify today on behalf of House Bill 1113.

At the Independence Institute, we are agnostic on energy resources. It is our strong belief that the choice of energy resources should come from the demands of the free market, and not from the preferences of policymakers, lobbyists, or special interest groups.

The goal of the Energy Policy Center is to promote a free market in energy production, where no protections, subsidies, or regulations result in energy winners and losers. We advocate that government remain neutral, which then encourages a level playing field. That is the best way to ensure that consumers reap the benefits of a healthy energy market – competition, lower prices, and more options.

Testimony

HB 1113 affords utilities the flexibility they need to meet electricity demand in the most cost effective way. HB 1113 is an energy freedom bill that does not preclude utilities from incorporating wind, solar, or other renewable energy sources from the achieving a minimum percentage of electricity that electric service providers must generate. Rather it allows utilities to achieve that mix in a way that does not force them to rush to comply in coming years.

HB 1113 would eliminate the step-increases mandated by previous legislation that would negatively affect utilities’ ability to respond to customer demands and force ratepayers to contend with ever increasing costs of energy in Colorado.

The most recent numbers from the Energy Information Administration indicate where Colorado sits vis-à-vis its neighbors when it comes to the average retail price of electricity to the residential sector. As of October 2013, Colorado ranks 27th, with a residential retail cost that exceeds that of Kansas, New Mexico, Wyoming, Nebraska, Montana, Oklahoma, and Idaho.

When looking at the EIA’s census division of Mountain states, Colorado’s average retail price of electricity for residential customers is second behind only Nevada. When it comes to commercial and industrial electricity, Colorado’s average retail price is the highest in the Mountain region in both categories, for 2012 and 2013.

According to the Database of State Incentives for Renewables and Efficiency, in 2013 Colorado renewable portfolio standard of 30 percent by 2020 is the highest in the entire Rocky Mountain region, trailing only the west coast state of California.

The Independence Institute believes HB 1113 addresses concerns about the state’s market-skewing renewable portfolio standard’s impact upon utilities and ratepayers. The step-change increases in the state’s renewable energy mandate over the course of the next few years will result in higher costs for utilities and ratepayers alike.

These increased costs will likely result in job losses, higher costs for consumers, and a loss of competitiveness for Colorado businesses in comparison to neighboring states without or with lower renewable energy standards. HB 1113’s 15 percent figure would bring the state more in line with states throughout the Mountain region.

Again, aligning minimums between investor-owned utilities and cooperative electric associations will level the playing field that will keep electricity rates competitive, but will not prevent individual providers from exceeding those minimums with a market mix of conventional and renewable sources, including wind and solar, that best fits their own market profile and satisfies the needs of their customers.

In conclusion, HB 1113 gives utilities the flexibility to adjust power sources as needed and respond to needs of consumers—and not the demands of special interests—from 2014 and thereafter.

Conclusion

As I stated at the beginning it is the strong belief of the Independence Institute that the choice of energy resources should come from the demands of the free market, and not from the preferences of policymakers, lobbyists, or special interest groups and we believe that HB 1113 is consistent with that principle.

Thank you.

Print Friendly

Legislative Preview: 2014 Energy Bills

January 24, 2014 by michael · Comments Off
Filed under: Archive, Hydraulic Fracturing, Legislation, renewable energy 

Current through January 24, 2014

Reform defeated: SB14-035 Renewable Energy Standard Repeal *postponed indefinitely*

Senate Bill 35, introduced by State Sen. Ted Harvey, would have repealed “substantially all of the provision enacted by Senate Bill 13-252″ by returning the renewable portfolio standard to 10 percent from 20 percent for rural cooperative electric associations, among other cuts.

The bill, sent to the State, Veterans and Military Affairs committee was killed Wednesday on a 3-2 party line vote. The SVMA committee has been dubbed the “kill committee” by the minority party, where bills are sent to receive a quick despatch.

Comment: As this bill has been killed, the Independence Institute will examine a similar bill, proposed by State Sen. Ray Scott on Wednesday that would reduce the RPS requirement from 20 percent to 15 percent.

SB14-011 Colorado Energy Research Authority

Among other provisions housekeeping provisions, SB 11 “substitutes ‘clean energy’ for ‘renewable energy’” and authorizes additional monies in the amount of $2 million to create an “energy research cash fund” (ERCF) for the next five fiscal years.

Comment: Substituting “clean” for “renewable” energy is noteworthy. The fiscal note estimates a cost of $2,000,000 annually for the next five years for the ERCF from the state General Fund.

SB14-028 Expand Electric Vehicle Charging Station Grants *Passed Senate second reading with amendments*

SB 14 “expands the existing list of persons and entities that are eligible to receive moneys from the electric vehicle grant fund, administered by the Colorado energy office (CEO), by adding private businesses and nonprofits and allowing the CEO to consider the extent to which grant applicants’ proposed charging locations serve existing vehicles or encourages the acquisition of new vehicles.”

Comment: The bill’s fiscal note estimates that the impact will be “minimal” with grant monies collected under HB13-1110 providing the resource stream. Funding will go to as many stations as possible, but could include fulling funding those installations “in a location that is especially advantageous for support of the electric vehicle market.”

SB14-082 Renewable Energy Standard Adjustment for Cooperative Electric Associations

SB82: “In the section of the renewable energy standard statute setting aside a specific portion of electric generating capacity that cooperative electric associations must meet through distributed generation, the bill:
• Eliminates the disparity between cooperative electric associations serving fewer than 10,000 meters and those serving 10,000 or more meters;
• Establishes a uniform 0.5% of total retail electricity sales as the target percentage for distributed generation; and
• Allows the 0.5% to be measured collectively among these associations as a group rather than individually.”

Comment: Fiscal note estimates minimal impact.

SB14-103 Phase In High-Efficiency Water Fixture Options

SB103 “prohibits the sale of lavatory faucets, shower heads, flushing urinals, tank-type toilets, and tank-type water closets on and after September 1, 2016, unless they are a watersense-listed plumbing
fixture.”

Comment: No fiscal note. The bill defines a “watersense-listed plumbing fixture” as:

• Tested by an accredited third-party certifying body or laboratory in accordance with the federal environmental protection agency’s WaterSense program;
• Certified by such body or laboratory as meeting the performance and efficiency requirements of the program; and
• Authorized by the program to use its label.

The bill would expand the current requirements for “water-efficient indoor plumbing fixtures” which apply currently to builders of new homes, new state buildings, and new and renovated residential, office, and commercial buildings, but at a much lower and “less stringent” standard than the one defined by WaterSense.


HB14-1012 Advanced Industry Investment Income Tax Credit

HB1012 “repeals the Colorado innovation investment tax credit and replaces it with the advanced industry investment tax credit.” The tax credit would be available through the end of 2017 for “an equity investment in a qualified small business from the advanced industries, which consists of advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, information technology, and infrastructure engineering.” The tax credit would equal 25 percent of the investment and up to 30 percent if the business “is located in a rural area or economically distressed area.” Maximum tax credit would be $50,000 for a single tax credit, and up to $2 million per calendar year, with rollover.

Comment: No fiscal note at the present time.

HB14-1030 Hydroelectric Generation Incentive

HB1030 would “promote the construction and operation of hydroelectric facilities in Colorado” by providing incentives for additional installation and elevating community hydroelectric energy facilities “into the community solar garden statute.”

Comment: The bill’s fiscal note estimates a cost of less than $2,500 per year. The hydroelectric power in question would be targeted at those “small hydropower projects of 30 megawatts or less” sited in “streams, diversion ditches for irrigation, or existing dams.”

HB14-1064 Severance Tax Distribution To A Local Government That Limits Oil And Gas Extraction *postponed indefinitely*

HB1064 “prohibits any local government that has a moratorium or permanent prohibition on the extraction of oil and gas from receiving more direct distributions or grants and loans than the local government received in the fiscal year during which the moratorium or permanent prohibition was enacted.”

Comment: The restriction would be lifted in the following fiscal year if a county or municipality rescinds the moratorium or permanent prohibition. In the meantime, the “moneys that would otherwise have been distributed to the county or municipality are redistributed on a pro rata basis to all other eligible counties and municipalities.” The fiscal note puts a total price tag of approximately $40,000 over the next two fiscal years.

In other words, the bill would properly restore balance between counties and municipalities who choose to limit oil and gas extraction and those that do not, as the localities instituting prohibitions should not benefit from increased activities elsewhere by matching severance tax revenues to activities permitted.

**Bill postponed indefinitely, 7-6 party line vote:

Jonathan Singer, D-Longmont, said. “My community is downstream and downwind from oil and gas operations and we feel the public health impacts of fracking regardless of existing fracking bans.”

Sonnenberg presented his proposal as a measure of fairness, ensuring that cities don’t benefit financially from a practice they’ve banned and that those communities that do allow fracking benefit from more of the severance tax revenue.

“Passing this bill would have directed a higher percentage of severance tax funds to communities that help provide for the energy needs of our state,” said Sonnenberg.

“I am disappointed the Democrats failed to see the importance of providing these communities additional revenue to support the oil and gas industry.”

HB14-1067 Renewable Energy Electric Standard REAs Move to 2025

This renewable reform bill, HB1067, “changes the target date to achieve the renewable component of the energy generation portfolio of retail cooperative electric associations [CEA] serving 100,000 or more customers, and qualifying wholesale utilities” from 2020 to 2025.

Comment: The fiscal note indicates a minimal impact. CEAs required to comply with the 20 percent renewable energy standard by 2020 would need to meet step-change adjustments that increase from 6 percent in 2015-2019 to 20 percent in 2020 would see a five year extension for meeting requirements. Measures available to comply with the requirement include development of “eligible generation facilities,” entering into power purchase agreements with “an eligible energy generation facility,” or purchasing “existing renewable energy credits”–each of which, the fiscal note determined, would  involve “additional costs” for the CEA.

The Independence Institute will also examine any additional energy bills introduced this session as they become available. This bill survey, completed on January 10, did not indicate any bills on hydraulic fracturing.

HB14-1113 Electric Renewable Energy Standard Reduction

HB1113 orders the public utilities commission to establish electric resource standards, or minimum percentages of electricity that electric service providers “must generate or cause to be generated from recycled energy and renewable energy resources.” This bill moves the current required minimums from 20 to 15 percent until 2019, and from 30 to 15 percent for 2020 and subsequent years. It also reduces the required minimum for rural electric coops to be reduced from 20 to 15 percent for 2020 and in the years following.

Comment: No fiscal note. This bill looks to challenge provisions from last year’s SB252, while also leveling all required electricity standards to be a flat 15 percent for both investor-owned and rural electric cooperative associations from 2020 and thereafter. Step-increases mandated by earlier bills are voided and returned to a standard 15 percent.

HB14-1138 Renewable Energy Standard Add Hydroelectric to Eligible

HB1138 “amends the definition of ‘renewable energy resources’ that can be used to  meet the state’s renewable energy standard to include hydroelectricity and pumped hydroelectricity.”

Comment: Fiscal note indicates minimal impact. The impact on state policy, however, could be quite large. Adding hydroelectric and pumped hydroelectric electricity to be added to the state’s list of eligible energy resources for meeting Colorado’s renewable energy standard “reduces the amount of energy required to be generated from other eligible resources (principally wind),” according to the bill’s fiscal note. This could affect not only state agency and local government electricity rates, but those of ratepayers statewide as well.

HB14-1150 State and Local Government and Federal Land Coordination

HB1150: “The bill creates the division of federal land coordination in the department of local affairs to address federal land decisions in Colorado that affect the state and local governments. The chief coordinator is the head of the division and is required to form a federal land coordination task force to study certain federal land decisions. The department of agriculture, the department of natural resources, the Colorado tourism office, the Colorado energy office, and the office of economic development are required to assist the division at the request of the chief coordinator. Based on task force findings, the chief coordinator may recommend that a local government receive a grant for research and analysis to form a coordinated response to a federal land decision.”

Comment: No fiscal note.

HB14-1159 Biogas System Components Sales and Use Tax Exemption

HB1159: “The bill exempts from state sales and use tax components used in biogas production systems. Local governments that currently impose sales or use tax on such components may either continue to do so or may exempt them from their sales or use taxes.”

Comment: The fiscal notes estimates a reduction in state tax revenues of up to $635,000.

This bill creates a sales and use tax exemption, or carve out, for capturing biogas to be used as a renewable natural gas, or for equipment used to create electricity from the biogas. Biogas “is
a natural by-product that is released as manure, food waste, and other organic compounds
breakdown.” This bill appears targeted to one project in Weld County, the Heartland Biogas Project, a 20 MW “anaerobic digester and renewable natural gas (RNG) facility” set to come online as soon as April 2014.

Print Friendly

January 23 Energy Roundup: Fracking Dishonesty; Interior Sec. Jewell Boots Press

January 23, 2014 by michael · Comments Off
Filed under: Archive, Hydraulic Fracturing, renewable energy 

Periodically, the Independence Institute’s Energy Policy Center will take a look at the good, the bad, and the ugly in energy stories from around the United States and abroad, and bring the best (and worst) of those stories to your attention.

1. Secretary of the Interior Sally Jewell may have violated Colorado Open Meetings Law under its sunshine statutes by shutting out members of the press while visiting Moffat County on Tuesday. The meeting in Colorado centered on the status of the sage-grouse, a species whose designation could affect energy projects in the northwest portion of the state:

As she was leaving, Leavitt Riley said she saw Jewell in a car in the parking lot and the driver-side door was open, so she approached Jewell “and she said the press was not allowed at this meeting,” Leavitt Riley recalled.

“I said, do you realize more than a dozen elected officials were in it? She said the tour was open to the press but this was a closed meeting” and then drove away, Leavitt Riley said.

She said the newspaper is pursuing the matter with the Colorado Press Association. No one with the U.S. Secretary of the Interior’s office was available for comment Tuesday night.

2. From Lachlan Markay at the Washington Free Beacona Politico column riddled with inaccuracies from anti-fracking activists:

A pair of prominent environmentalists penned a column Tuesday for Politico Magazine attacking hydraulic fracturing littered with dishonest and incorrect claims.

“If you calculate the greenhouse gas pollution emitted at every stage of the production process—drilling, piping, compression—it’s essentially just coal by another name,” McKibben and Tidwell wrote.

The claim is frequently sourced to Cornell scientists Robert Howarth and Anthony Ingraffea, who have found significantly higher life cycle emissions than are found in other studies.

Numerous government agencies, environmentalist groups, and academics have panned Howarth and Ingraffea’s work on the issue and produced their own studies showing relatively low life cycle emissions from natural gas.

“Their analysis is seriously flawed,” according to three Cornell colleagues, professors in the university’s departments of earth and atmospheric sciences and chemical and biological engineering.

3. Michael Bastasch at The Daily Caller highlights a report on the social benefits of fossil fuels:

Burning off carbon dioxide into the atmosphere to provide cheap electricity may have affected the climate, but the benefits of a carbonized economy far outweigh the costs, according to a new study.

The pro-coal American Coalition for Clean Coal Electricity (ACCCE) released a study showing that the benefits of carbonized fuel, like coal, to society are 50 to 500 times greater than the costs. Over the past two-and-a-half centuries increased fossil fuel energy production has helped more than double global life expectancy and increase global incomes 11-fold.

4. North Carolina State University issued a study finding that increasing the use of electric vehicles “is not an effective way to produce large emissions reductions”:

“We wanted to see how important EDVs may be over the next 40 years in terms of their ability to reduce emissions,” says Dr. Joseph DeCarolis, an assistant professor of civil, construction and environmental engineering at NC State and senior author of a paper on the new model. “We found that increasing the use of EDVs is not an effective way to produce large emissions reductions.”

The researchers ran 108 different scenarios in a powerful energy systems model to determine the impact of EDV use on emissions between now and 2050. They found that, even if EDVs made up 42 percent of passenger vehicles in the U.S., there would be little or no reduction in the emission of key air pollutants.

Print Friendly

Emails Show EPA’s Denver “Listening Tour” Stop A Collaboration Between Agency, Environmentalist Orgs

January 15, 2014 by michael · Comments Off
Filed under: Archive, Environmental Protection Agency 

Emails published this week by the Washington Free Beacon’s Lachlan Markay illustrate a pattern of coordination and cooperation between the Environmental Protection Agency and external environmentalist groups, including the use of at least one agency event to “pressure” an Xcel Energy executive at the Denver stop of a 2013 “listening tour”:

The emails, obtained by the Energy and Environment Legal Institute (EELI) through a Freedom of Information Act lawsuit, could fuel an ongoing controversy over EPA policies that critics say are biased against traditional sources of energy.

Emails show EPA used official events to help environmentalist groups gather signatures for petitions on agency rulemaking, incorporated advance copies of letters drafted by those groups into official statements, and worked with environmentalists to publicly pressure executives of at least one energy company.

In October, the EPA launched an 11-city “listening tour” to gather commentary and input on carbon pollution regulations, and scheduled a stop in Denver. While Colorado houses the EPA Region 8 office, critics then questioned why the tour skipped states like West Virginia, Kentucky, and Colorado’s neighbor to the north, Wyoming–all states that produce more coal, with Wyoming the number one coal producing state in the country.

The documents shed light on part of the deliberation process, with Markay revealing how the “EPA decided on the locations for those hearings after consulting with leading environmentalist groups.”

According to emails written by EPA Region 8 administrator James Martin, the selection of “listening tour” stops had more to do with applying pressure to a related industry–natural gas–and singled out one industry executive in particular, while bypassing “friendlier forums” in California and Washington.

“San Fran and Seattle would be friendlier forums but CA has no coal plants and WA is phasing out its one plant,” Martin wrote. The recipient was Vicki Patton, general counsel at the Environmental Defense Fund (EDF).

“Choosing either may create opportunities for the industry to claim EPA is tilting the playing field,” Martin told Patton. “Denver would not have that problem.”

Martin continued on the choice of Denver. “The gas industry has way more presence here, too. One last point in its favor–it will make Roy Palmer nervous!” wrote Martin.

As Markay points out, Palmer is an executive at Xcel Energy, the state’s largest utility.

Markay also noted that Martin used a personal email address for official EPA business, a claim the EPA had first denied but that the released documents later substantiated.

Among other findings revealed by the internal emails, demonstrating a pattern of cooperation:

Nancy Grantham, director of public affairs for EPA Region 1, which covers New England, asked an organizer for the Sierra Club’s New Hampshire chapter to share the group’s agenda so EPA could adjust its messaging accordingly in an email dated March 12, 2012.

Print Friendly

No, Wind Turbines Didn’t Keep Texas Grid Online

January 9, 2014 by michael · Comments Off
Filed under: Archive, renewable energy, wind energy 

Wind energy kept Texas powered earlier this week, according to supporters of the renewable energy power source.

Plunging temperatures as a result of the polar vortex pushed energy generation across the country above normal winter levels, including Texas:

ERCOT said demand for electricity today reached 55,486 megawatts between 7 a.m. and 8 a.m. That’s short of the record winter demand of 57,265 on Feb. 10, 2011, which produced rotating outages, and lower than peak demand during last month’s run of low temperatures, said ERCOT spokeswoman Robbie Searcy.

The demand for electricity in Texas nearly pushed the grid to begin triggering rolling power outages:

The Electric Reliability Council of Texas (ERCOT), which manages the electric grid in most of Texas, briefly issued an Energy Emergency Alert 2 early Monday morning, the last step before rotating power outages would be implemented. ERCOT canceled the warning about possible outages shortly after 9:30 a.m.

But the loss of just one more large power plant could have pushed the grid over the edge, Dan Woodfin, ERCOT director of system operations, told reporters on a conference call. The grid lost two big power plants to weather-related problems and some others to other problems, totaling about 3,700 megawatts of power, Woodfin said.

Texas made up the deficit between demand and supply by tapping energy sources outside the state:

During that time, the state imported about 800 megawatts from the nation’s eastern power grid, and another 180 megawatts from Mexico. A megawatt is roughly enough to supply about 200 Texas homes during a period of peak electricity use, although demand in Texas peaks during the summer as air conditioners fire up.

For about an hour during the emergency alert period, wholesale power prices hit the state’s regulatory ceiling of $5,000 per megawatt-hour, Woodfin said. That’s about 100 times the $50 per megawatt-hour price generally seen.

Why did Texas need to seek out of state electricity when, as was trumpeted by wind energy supporters, wind was filling in?

Wind could not fill the gap created by increased demand from the cold and the drop in capacity due to outages from plants–both scheduled and unscheduled.

The Energy Reliability Council of Texas monitors the production of wind energy in the Texas grid and produces daily “wind integration reports” (WIR) that carefully illustrate:

Hourly averages of actual ERCOT load vs. wind output, and total installed wind capacity
Actual average wind output as a percentage of the total installed wind capacity
Actual average wind output as a percentage of the ERCOT load
Weekly graph of the ERCOT load vs. actual wind output

The first graph from the January 6 WIR shows that at the very moment energy demand in Texas began to increase in the early morning hours Monday, actual wind output began to plummet precipitously.

Wind production falls well below 2,000 MW and remains there for most of the rest of the daylight hours on Monday, picking up again only as night returns:
ERCOT Load vs Wind Input2

In the next graph, ERCOT’s detailed hourly picture shows wind output falling below 20 percent of installed capacity by 7am, the same hour as power plants totaling 1,350 MW went offline.

Actual Wind Output as Percentage of Installed Wind Capacity

Actual wind output as a percentage of ERCOT’s total load declined from approximately 15 percent at midnight to around just 5 percent by 7am, as the peak of the surge of demand was felt, and remained below the 10 percent threshold until after 11pm Monday.

Actual Wind Output as Percentage of ERCOT Load

So, instead of bailing out the Texas grid, the intermittent source was reduced to a trickle on a near-record setting day for the state of Texas.

The Institute for Energy Research found the same results:

But even though early morning is generally a good time for wind generation, on Monday morning only 17 percent of ERCOT’s wind capacity (1,782 megawatts of the approximately 10,400 megawatts of wind capacity) were operating at that time. According to Fuel Fix, this means that “on Monday [wind] only contributed about 3.2 percent of electricity used during peak demand. It is obviously a judgment call whether 17 percent of capacity and 3.2 percent of total generation is indeed “massive quantities” of wind or merely middling amounts.

Winter energy demand is lower than summer peak demand–when Texans reasonably clamor for air conditioning–and more than 10,000 MW of generation for the state’s grid was offline Monday for routine, scheduled maintenance:

Electric supplies on Monday tightened after more than 3,700 megawatts of generation was forced to shut overnight Sunday and early Monday, Dan Woodfin, ERCOT’s director of system operations, told reporters. The forced outages came on top of nearly 10,000 MW of generation that was already shut for the season or for planned maintenance, he said.

Woodfin said about 1,800 MW of the 3,700 MW of the forced outages were weather-related, including two large power plants in north central Texas that he declined to name.

The American Wind Energy Association was quick to tout wind’s contributions:

Then in Texas, the more than 2,000 MW of wind output on Monday morning was the critical difference keeping heaters running as the grid operator struggled with numerous outages at conventional power plants. More than 13,000 MW of conventional power plants were down for maintenance, while another 2,000 MW of conventional power plants experienced unplanned outages, forcing the grid operator to resort to emergency procedures. In a similar incident two years ago, wind energy earned accolades from the grid operator for helping to keep the lights on as dozens of conventional power plants failed in another cold snap.

Other outlets like ThinkProgress, also pushed wind’s contributions.

“Demand remained high on Tuesday, but increased output from West Texas wind farms enabled the state to avoid an emergency scenario,” said ClimateProgress, TP’s climate blog.

Even Al Armendariz, the former Environmental Protection Agency regional director whose promises to “crucify” oil and gas producers resulted in his abrupt resignation, joined in congratulating wind:

Calling coal, gas, and nuclear “unreliable” Armendariz dinged the “old stuff” of traditional power generation–the Luminant Comanche Peak 1 nuclear was at 72 percent of capacity, according to Reuters, both Monday and Tuesday–while neglecting to mention that all day Monday, actual wind output for ERCOT as a percentage of total wind capacity never even managed to reach 70 percent during any one hour, and fell short of 50 percent in at least 20 of the 24 hours that day, according to ERCOT’s reports.

Armendariz currently works for the Sierra Club’s “Beyond Coal” campaign.

Print Friendly

Progressive criticism of PUC nominee Vaad is about ALEC rather than energy

January 8, 2014 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

Progressive left logic: Progressives want to destroy ALEC. Moderate Republican PUC nominee Glenn Vaad has been a member of ALEC. Therefore progressives want to destroy Glenn Vaad even though he has supported increasing Colorado’s renewable energy mandate and fuel switching.

The progressive left’s criticism of Governor John Hickenlooper’s appointment of former State Representative Glenn Vaad (R-Mead) to Colorado’s Public Utilities Commission (PUC) appears to part of a coordinated national campaign against the American Legislative Exchange Council rather than Vaad’s record on energy policy, which is more in line with Democrats than free market conservatives. Vaad is awaiting State Senate confirmation, which is likely to happen sometime this week.

ALEC is a nonpartisan voluntary membership organization for conservative state lawmakers “who share a common belief in limited government, free markets, federalism, and individual liberty.” ALEC promotes such dangerous ideas like reducing excessive government spending, limiting the overall tax burden, choice in education, and market-based approach to renewable energy sources. As a state lawmaker, Glenn Vaad was a member.

The progressive left is obsessed with ALEC. In May 2013 several progressive organizations with ties to Colorado met to “coordinate their attack plan” as the Washington Free Beacon reported:

Leading progressive organizers met on May 10 to coordinate their attack plan against the American Legislative Exchange Council (ALEC), discussing ways to pressure corporations into abandoning the group for its small-government advocacy and turn against what they call the “vast, right-wing conspiracy.”

The participants, including representatives from such far-left groups as Common Cause, Color of Change, and ProgressNow, met for lunch in a conference room at the AFL-CIO headquarters in Washington, D.C.

The Free Beacon quoted Aniello Alioto of ProgressNow Colorado, summing up the strategy on attacking ALEC, “Never relent, never let up pressure, and always increase.”

By law, the three-member PUC cannot have more than two members from any one party. With Republican member James Tarpey retiring and the other two members Pam Patton and Chairman Joshua Epel being Democrats, that means the Governor had to find a qualified applicant within the Republican Party.  In theory, he could have looked for someone inside the Constitution, Libertarian, or Green Parties, but it’s likely that the qualified applicant pool was rather shallow.

So Governor Hickenlooper selected a very moderate Republican Rep. Vaad, who has the necessary qualifications as a former Weld County Commissioner and longtime employee of the Colorado Department of Transportation. Vaad’s 2011 Colorado Union of Taxpayers’ rating (a conservative legislative scorecard) was a modest 50 out of 100. Only nine House Republicans scored lower.

When it comes to energy policy, the environmental left should be pleased with Vaad’s nomination. As a state representative, Vaad co-sponsored HB07-1281, the bill to increase Colorado’s renewable mandate to 20 percent. He also sponsored then Governor Bill Ritter’s crowning jewel of his “new energy economy,” the controversial fuel-switching bill HB10-1365, which got nearly unanimous approval from the Democrat caucus but proved quite divisive for Republicans.

But Vaad’s actual legislative record doesn’t seem to matter. To the progressive left, his appointment is more about ALEC than Colorado’s PUC as the far-left Colorado Independent reports:

Groups opposed to Vaad’s appointment say he has not just been an ALEC member but an officer. They point to documents and reports posted by consumer-advocacy groups like Common Cause and progressive-politics organizations like the Center for Media and Democracy that show Vaad was Chair of the ALEC Commerce, Insurance and Economic Development task force while he was serving in the state legislature in 2011 and 2012 and that he had been accepting ALEC “scholarships” every year he was in the legislature dating back to 2006.

According to a press release from Gabe Elsner, executive director at the Energy and Policy Institute, quoted in the Independent:

There is a clear conflict of interest…In the past year, ALEC’s utility and fossil fuel members lobbied lawmakers in at least 15 states to introduce legislation repealing Renewable Energy Portfolio Standards. Now ALEC is launching a new wave of attacks on clean energy policies like solar net metering… There’s a real threat that Mr. Vaad will serve ALEC’s special interest members instead of Colorado families.

Well first, Rep. Vaad hasn’t been in the state legislature since the spring of 2012, and Mr. Elsner is talking about 2013. Also, there is no evidence that Vaad ever introduced legislation to repeal the renewable energy mandate. In fact, as stated earlier, he did just the opposite. (Although he did oppose HB10-1001, the 30 percent renewable mandate bill). Furthermore, he was on the Commerce, Insurance and Economic Development task force not the Energy, Environment and Agriculture.

Progressive left logic: Progressives want to destroy ALEC. Moderate Republican PUC nominee Glenn Vaad has been a member of ALEC. Therefore progressives want to destroy Glenn Vaad even though he has supported increasing Colorado’s renewable energy mandate and fuel switching.

The bottom line is that the opposition to Glenn Vaad is about attacking ALEC rather than Vaad’s qualifications or his perspective on energy policy. So the progressive left is willing to sacrifice about the best appointee they can hope for in order to “never let up the pressure, and always increase.”

I did call Glenn Vaad for comment but as of posting he has not returned the call.

Print Friendly

Next Page »