Testimony Against Divestment at CU Regent Board Meeting

April 16, 2015 by michael · Comments Off
Filed under: Legal, Legislation, preferred energy 

Delivered April 16:

·         Thank you for the opportunity to speak today on the issue of fossil fuel divestment. My name is Michael Sandoval. I am a proud graduate of CU Boulder and CU Denver. I graduated with degrees in history and marketing. I am here today speaking as both a proud alumnus as well as for the Independence Institute, a free market think tank based in Denver.

·         First, let me emphasize that Colorado is a proud energy producing state. In fact, many of our friends, family and neighbors have jobs in this industry. Many of the men and women in these fields earned their degree from this institution. To stigmatize and demonize energy workers is both shameful and downright ignorant. I think Lisa Hamil’s op-ed in the Boulder Daily Camera earlier this year says it best, “Banning investment in fossil fuel companies makes no more sense than banning entire fields of study like geology and petroleum engineering, or classes like the Global Energy Management Program’s Lifecycle of Oil and Natural Gas Certificate Course that I teach at CU Denver Business School. But that’s where the divestment argument leads: If it’s bad to invest in energy companies that produce fossil fuels, then it must be even worse to educate the professionals who would run those companies.”

·         A July 2013 study from the University of Colorado’s Leeds School of Business found more than 110,000 jobs in our state are supported by the oil and gas industry. Likewise, the industry spurs almost $30 billion in economic activity and generates $1.6 billion in state and local tax revenues. In other words, oil and gas is one of Colorado’s foundational industries – just as important as agriculture and tourism. To suddenly wipe out the oil and gas industry would cause tremendous harm to every Colorado family, not just the tens of thousands of Colorado families whose livelihoods depend on this vital economic sector.

·         Given the importance to Colorado’s economy, let me next point out that the anti-fossil fuel campaign is really a national campaign run by far-left environmental activists. Well-funded national organizations like 350.org that have no real interest in our state are the ones pouring millions of dollars into this campaign. They oppose all fossil fuels. They are currently running campaigns against the Keystone XL pipeline and attempting to ban natural gas production here in Colorado and across the country. Just this week, members of 350.org were protesting outside of Hillary Clinton’s campaign office saying that she was too moderate for them. To be blunt, this is a national campaign using college students to shut down one of Colorado’s leading job creators. These groups are simply too extreme for Colorado.

·         Let me also note that the divestment campaign would be all economic pain for no climate gain. As Dr. Daniel Fischel from the University of Chicago School of Law found in a study he conducted, wrote in the Wall Street Journal, “Every bit of economic and quantitative evidence available to us today shows that the only entities punished under a fossil-fuel divestment regime are the schools actually doing the divesting—with virtually no discernible impact on the targeted companies. Students and universities may nevertheless wish to make a symbolic or political statement, but they should know it will come at a high price. Talk is cheap, but divestiture is not.”

·         Numerous professors from across the country agree. A letter signed by leading professors from the University of California Berkeley, UCLA, Yale and Duke wrote, “In our view, continued engagement with the energy sector on these critical issues represents a far better and more practical approach than a policy of exclusion and isolation. Plainly put, the challenge of combating climate change is too great, and the costs associated with divestment are too considerable, for us to pursue these worthwhile objectives in any other way.” I should note that this letter was also signed by professors from CU.

·         Vincent Carroll of the Denver Post agrees, writing earlier this year that “Any institution facing a decision on divestment should welcome students and faculty urging divestment, and then respond with a forceful “no.” Carroll explains, “Every governmental projection of the world’s energy portfolio in the coming decades foresees still massive reliance on fossil fuels, however seriously we invest in alternatives. As the climate scientist James Hansen said a few years ago, “suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India, or the world as a whole is almost the equivalent of believing in the Easter Bunny and Tooth Fairy.”

·         Let me end by saying that I appreciate the students who are here today making their voices heard. As a CU alum who was politically active myself when I was on campus I know particularly well the power of student voices. It is noteworthy that the couple of dozen activists speaking in favor divestment pales in comparison to previous efforts on this campus. But I am pleased that there has been a good, constructive dialogue.

·         As an alumnus of CU, I urge the CU Board of Regents to reject the politically motivated divestment campaign and stand with the thousands of hard working CU grads who work all over the world to ensure we have access to abundant, affordable, and reliable energy resources.

Following testimony, CU Regents voted 7-2 to continue current investment strategies and reject #divestment:

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ECPA: Mike Nasi’s testimony to Senate Agriculture, Natural Resources, and Energy

April 14, 2015 by Amy · Comments Off
Filed under: CDPHE, Legal, Legislation, New Energy Economy 

Colorado’s Electric Consumers’ Protection Act (ECPA), a bill to address Colorado compliance with the EPA’s proposed Clean Power Plan (CPP), received its first hearing on Thursday, April 9, 2015 in the Senate Agriculture, Natural Resources, and Energy Committee. Senators John Cooke (R-Greeley) and Jerry Sonnenberg (R-Sterling) are the prime sponsors of SB15-258. A number of people and organizations testified in favor of it including Catholic Charities, the Colorado Consumer Coalition, TriState Generation and Transmission Association, and our own Michael Sandoval. All made compelling arguments to support the ECPA. Below is the written testimony of one of the most compelling witnesses air regulatory attorney Mike Nasi.

The bill did pass out of committee with bi-partisan support on a 7-2 vote. Now it moves to Senate Appropriations.

For more information on the CPP and the ECPA, read the Independence Institute’s latest Issue Backgrounder “Colorado and the ‘Clean Power Plan’: Expensive, Ineffective, Illegal, and Impossible” by intern Lexi Osborn.

Also read Sen. Cooke and Sonnenberg’s commentary “No regulation without representation.”

Illegality of EPAs Clean Power Plan & Benefits of the Electric Consumers Protection Act (ECPA) SB15-258

April 9, 2015

TESTIMONY OF MICHAEL J. NASI

Jackson Walker, L.L.P Austin, Texas

My name is Mike Nasi.  I am a partner at the law firm Jackson Walker, located in the firm’s Austin, Texas office where I head up the firm’s air regulatory practice.  I am honored to be here before you today.  I have been asked to testify here today because I have been a practicing air quality attorney working with EPA air quality regulations for over 22 years and represent power generation interests, including rural electric cooperatives, in pending DC Circuit and U.S. Supreme Court cases regarding a number of recently-promulgated EPA air regulations targeting the electric generation sector.

As proposed, EPA’s Clean Power Plan is illegal.  This is not just my opinion, but the position of thirty-two states’ elected officials; huge swaths of the electric power, manufacturing, and chemical industries; various businesses and community organizations; and even those in the President’s inner circle.  As recently stated by Laurence Tribe – the renowned scholar and close advisor to the President:

“EPA is attempting [in the Clean Power Plan] an unconstitutional trifecta: usurping the prerogatives of the States, Congress and the Federal Courts – all at once. Burning the Constitution should not become part of our national energy policy.

The Clean Power Plan (CPP) is an unprecedented and unconstitutional attempt at a power grab by the EPA.  In direct conflict with the 10th Amendment of the U.S. Constitution, EPA intends to take over roles reserved to the states and remake them in their vision – including a takeover of electricity production, consumption and distribution.  Under the guise of “state flexibility,” EPA hopes to coax states, or, if necessary, coerce them to develop state plans that would create authority EPA does not otherwise have to enforce the “outside the fence” elements of the CPP.

The Clean Air Act places limits on EPA’s authority; specifically, to “defining” the best system of emissions reduction – BSER – and promulgating a guideline document.  It does not provide EPA the authority to set binding state-specific emissions rate targets or regulate electricity markets under the auspices of a federally enforceable state plan.  By setting such stringent emissions limits under incredibly compressed timelines, and by preventing states from considering actions they’ve already taken before the 2012 baseline year – including retirements,  significant build out of renewable generation and reductions in end-user demand – EPA has failed to provide the states with any of the state-led authority or flexibility required in the Clean Air Act.  This authority and flexibility is central to the cooperative federalism required by the Clean Air Act.

At its core, EPA does not have the authority to require states to undertake the actions contemplated in its BSER model – the so-called four building blocks of the rule.  Block 1 – increased coal power plant efficiency – is unreasonable and technologically impractical, if not impossible.  The remaining three blocks, however, are where EPA truly contravenes the Clean Air Act by looking “beyond the fence” for emissions reductions.  The plain language of Section 111(d) makes it clear that a standard of performance should only apply to an “existing source” “which emits or may emit an air pollutant.”   There is no discussion of “groups of sources” or “markets related to an existing source,” but rather, requires that standards apply to individual “existing sources” in isolation – “within the fence.”  Blocks 2 through 4 completely contradict the within-the-fence requirements.  Regarding Block 2, EPA has no authority to require re-dispatch of generation, which is left largely to the free market or the regional transmission organizations (“RTO”) and independent system operators (“ISO”) that oversee dispatch [and Public Utility Commissions].  EPA simply is not provided the authority under the CAA to set mandatory state emission budgets based on the emission reductions it calculates are possible from fuel switching,  renewable generation increases, or end-user energy efficiency.  This is also in direct contravention of the Federal Power Act, which leaves to the states exclusive jurisdiction over intrastate electricity matters.

The legal problems with EPA’s rule start well before reaching the question of their “beyond the fence” state budgets, however, as EPA has three significant statutory hurdles  it has not and cannot clear.  The explicit language of the Clean Air Act prevents EPA from promulgating this rule.  The Act states that EPA is prevented from applying Section 111(d) standards to source categories already regulated under Section 112 of the Act; fossil fuel power plants are regulated through Section 112 by the Mercury and Air Toxics Rule.  EPA claims that the Act is ambiguous due to drafting errors, but the language as codified in the United States code is clear.  Even accounting for drafting errors, the language still clearly prohibits EPA’s actions.  Furthermore, the Supreme Court has already spoken on this issue, in a note to its decision in AEP v. Connecticut, in which it stated: “EPA may not employ [Section 111(d)] if existing stationary sources of the pollutant in question are regulated under the…the “hazardous air pollutants” program, [Section 112.]”

The Clean Air Act also requires a valid new-source 111(b) rule to be in place before EPA may proceed to an existing source rule under Section 111(d).  These rules are still in the proposal stage, and even if finalized, are riddled with technical and legal flaws that in my opinion will result in the rules being vacated, which will remove this necessary legal prerequisite to any 111(d) rule. As recently pointed out by 13 state attorneys general (see attached March 25, 2015 letter),  EPA also failed to finalize the 111(b) rule within one year of proposal in violation of its mandatory duty to do so under 111(b)(1)(B) of the CAA.  As explained more fully in the AG letter, this violation stands to undermines EPA’s current schedule for finalizing the 111(b) and (d) rule this summer given that the 111(b) rule must be re-proposed and finalized before the 111(d) rule can be finalized. EPA has also failed to make a necessary Section 111-specific endangerment finding based on CO2 emissions from the fossil fuel source category.  EPA attempts to rely on its endangerment finding for GHG emissions from motor vehicles as the endangerment finding for this rule.  But this motor vehicle endangerment finding is based on a completely different section, even title, of the Clean Air Act; it was an endangerment finding for six separate greenhouse gases, not just CO2 as the Clean Power Plan addresses; and the statutory language of the endangerment finding itself is different, with the Section 111 standard imposing a greater burden on EPA.  EPA attempts to say that there is a “rational basis” for this rule, but this is simply not true; the rule, even if fully implemented, will have an almost imperceptible impact on global climate.

Colorado’s ability to comply with the Clean Power Plan is in serious question, though due to no fault of your own, but it is why any attempt to comply should be transparent for every Coloradan to see.  The sheer enormity of the emissions reductions and the incredibly short time constraints of the rule alone would be a daunting, if not impossible challenge, but the legal authority of state agencies to implement the rule is simply not there in many respects.  As an initial matter, the Air Quality Control Commission’s authority, as implemented by the Colorado Department of Public Health & Environment, is limited to drafting regulations directed at sources of air pollutants.  There is no authority to go “beyond the fence,” which, like the federal government, significantly constrains the ability to develop any plan addressing Blocks 2 through 4 of EPA’s BSER model.  The Public Utilities Commission is also subject to limitations on breadth of authority, that precludes it from addressing the environmental components and entities necessary to meet EPA’s budget.

I certainly would not recommend that Colorado create a plan that establishes authority that EPA itself does not have.  Having said that, I see value in the passage of SB 258 the Electric Consumer Protection Act because it would ensure the PUC’s oversight and actions to ensure that rates stay competitive and reliability is maintained.   Given the price increase and reliability risks in question, it makes good sense that the ECPA requires both PUC approval followed by the General Assembly’s approval because it will ensure that the public may participate in a transparent process and Colorado legislators have oversight over the submission of any plan.

I was encouraged to see that – the Colorado Department of Public Health and Environment, the Public Utilities Commission and the Colorado Energy Office – in official comments to the EPA about the CPP acknowledge that, “legislation may be needed to clarify or direct state agencies on their respective roles and authorities.”  There will be lawsuits, and the ECPA contains a smart safety valve provision that suspends or terminates any further action on a State Implementation Plan if the regulations are not adopted, are suspended, or are found to be contrary to law.

The ECPA is simply good government that provides a transparent framework. Without the ECPA, CDPHE has indicated that it will draft a plan and implement it behind closed doors, without public or legislative oversight. Without the ECPA, you will be ceding your authority, your responsibility, to unelected air quality regulators.

Thank you.

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Colorado and the ‘Clean Power Plan: Expensive, Ineffective, Illegal, and Impossible

April 2, 2015 by admin · Comments Off
Filed under: New Energy Economy, renewable energy, solar energy, wind energy 

IB-C-2015 (April 2015)
Author: Lexi Osborn

PDF of full Issue Backgrounder

Executive Summary:

As part of the Obama administration’s agenda to address global warming, the Environmental Protection Agency (EPA) introduced new regulations with the purpose of reducing carbon emissions. Titled the “Clean Power Plan,” the controversial rules:

  • Will require a new regulatory regime, and holistically seeks to remake the nation’s energy policy;
  • Will incur massive costs;
  • Will greatly affect energy reliability across the country;
  • Is likely illegal; and
  • Won’t have any measurable impact on global CO2 emissions.
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Energy Policy Center testimony on SB 44

March 18, 2015 by michael · Comments Off
Filed under: Legal, Legislation, New Energy Economy, preferred energy, renewable energy, solar energy, wind energy 

IMG_0620
Energy Policy Center analyst Michael Sandoval offers testimony on behalf of Senate Bill 44 before the House Committee on State, Veterans, and Military Affairs on March 2, 2015.

Testimony as prepared:

Testimony on behalf of

SB 44 CONCERNING A REDUCTION IN COLORADO’S RENEWABLE ENERGY STANDARD

March 2, 2015

State, Veterans, and Military Affairs Committee

Mr(s). Chair and Members of the Committee,

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

Thank you for allowing me the opportunity to testify today on behalf of SB 44.

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 – where competition, lower prices, and more options provide the foundation for affordable and most importantly, reliable energy.

Testimony

SB 44 affords utilities the flexibility they need to meet electricity demand in the most cost effective way. SB 44 is an energy freedom bill that does not preclude utilities from incorporating wind, solar, or other alternative energy sources in order to achieve 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.

SB 44 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 November 2014, Colorado ranks 27th, with a residential retail cost that exceeds that of New Mexico, Wyoming, Nebraska, Montana, Oklahoma, Utah, and Idaho.

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 SB 44 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. SB 44’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 alternative sources, including wind and solar, that best fits their own market profile and satisfies the needs of their customers.

In conclusion, SB 44 gives utilities the flexibility to adjust power sources as needed and respond to needs of consumers—and not the demands of special interests—from 2015 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 SB 44 is consistent with that principle.

Thank you.

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EPA’s Clean Power Plan “Impossible” for Colorado

March 4, 2015 by michael · Comments Off
Filed under: Environmental Protection Agency 

By Lexi Osborn

In an eye-popping column in the Denver Post last week, editorial page editor Vincent Carroll exposes the serious problems surrounding the Environmental Protection Agency’s controversial Clean Power Plan.

This past summer, everyone from former Gov. Bill Ritter to two of the state’s top regulators, Dr. Larry Wolk of the Colorado Department of Public Health and Environment (CDPHE) and Joshua Epel of the Public Utilities Commission (PUC), assured the public that Colorado easily would be in compliance with this new plan; the proposal would have little impact on the lives of Colorado residents because Colorado is, “a long way down the road in being able to meet the [EPA's] 2030 goal way ahead of time.”

Apparently, they spoke too soon.

As it turns out, the EPA did not give full credit to Colorado ratepayers for their significant investment in renewable energy and efficiency. Furthermore, the carbon mandate timeline is, by all reasonable assessment, impossible to meet.  In an interview with Carroll, Wolk bluntly said “I don’t have a problem with saying I think it’s nearly impossible for us to meet the interim standard.”

The EPA’s failure to give full credit to Colorado ignited some panic among public officials. In December, Wolk, Epel and Jeff Ackerman, the director of the Colorado Energy Office, wrote a letter to the EPA criticizing in detail the mandate for Colorado, Carroll wrote. He breaks down their objections into five main points:

1)   The EPA plan in effect punishes Colorado for being ahead of the game

2)   The plan is technically naïve

3)   The plan is oblivious to the momentum of efforts underway

4)   The plan is absurdly frontloaded

5)   The deadline of June 2016 for submitting a state plan is literally impossible

Not only is this previously touted pro-environment plan riddled with issues, but it has also created a power struggle between the PUC and the CDPHE. For the mandates of the Clean Power Plan to be implemented, regulatory authority needs to be designated. Currently, the PUC and CDPHE are both vying to take on this initiative.

The CDPHE believes it has the authority to create and impose the new energy standard, even though the PUC regulates resource planning, renewable energy and energy efficiency programs at investor-owned utilities, while the CDPHE only has authority over air quality. The CDPHE also lacks the infrastructure to hold public and open hearings and testimonies, which the PUC has. When directly asked by Carroll, “So you’ll give the marching orders to all of the utilities in the state?” Wolk, despite these many factors, said, “Yes, in consultation with the EPA, the PUC and others.”

As a way to settle the issue, Rep. John Cooke (R-Greeley) proposed legislation that would make the CDPHE the lead agency in developing and enforcing air quality issues, and would require all state plans be approved by the PUC and the legislature.

But, the issue has yet to be settled.

Carroll hopes this messy situation will be rectified through similar open and transparent legislation. And let us all hope that this regulatory authority, which impacts the cost and reliability of our energy, will have at least some democratic oversight.

Otherwise Colorado electric consumers are left with the bill for plans made in the dark.

Lexi Osborn is a Future Leaders intern. She graduated from Northwestern University with a degree in political science.

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Big Wind and Solar Oppose Clean Energy

February 13, 2015 by michael · Comments Off
Filed under: Archive, Legislation, preferred energy, renewable energy, solar energy, wind energy 

By Lexi Osborn

In the upcoming weeks, House Bill 1118 will be up for debate in the State, Veterans, and Military Affairs Committee. This bill eliminates the restrictions on the hydroelectricity and pumped hydroelectricity that can be counted as a “renewable energy resource” to meet Colorado’s renewable energy standard.

Currently, hydroelectricity is only counted towards the renewable energy standard if newly built facilities have a nameplate rating of 10 MW or less, or, if they are built before January 2005, with a nameplate rating of 30 MW or less. Fully including hydroelectricity would allow Coloradoans to take advantage of the 1169 megawatts of existing hydroelectric capacity. Eighty-two percent of that capacity is currently not considered “renewable” by Colorado standards because those facilities have a capacity of 30 MW and were built before 2005.

The Environmental Protection Agency (EPA) categorizes hydroelectricity as clean, renewable energy, and the Colorado Energy Office (CEO) determined that it produces air emissions on par with wind and solar. There is no justifiable environmental reason to keep these restrictions in place.

It may then come as a surprise that there are clean energy supporters who are actively fighting against this bill. Conservation Colorado, the Colorado Cleantech Industries Association, and the Distributed Wind Energy Association are all opposing the inclusion of hydroelectricity as a renewable energy resource despite the EPA’s evaluation. These organizations all claim to have commitments to developing and expanding clean energy in our society, making it hard to justify their opposition. So, why exclude hydroelectricity? Why impede clean energy if their missions are to protect the environment and limit carbon emissions?

Conservation Colorado has claimed that the current restrictions are necessary because the construction of large-scale hydroelectric facilities is damaging to the environment. But, the restrictions aren’t protecting the environment. The restrictions limit the ability of people to use already existing hydroelectric facilities to comply with the renewable energy standard. All these restrictions do is force Colorado to leave out hydroelectric sources in its renewable energy portfolio, giving preferential treatment to wind and solar industries. This ends up costing ratepayers millions of dollars in compliance costs.

The only real reason they want to exclude hydroelectricity is because it threatens their market share. Last year, an almost identical bill, HB 1138, was shot down because wind and solar advocates testified that their industries would struggle if they had to compete with hydropower, which already supplies 23 percent of the electricity to rural co-ops. They claimed the bill would negatively affect jobs in the solar and wind industries that benefit from the renewable energy mandate.

Their testimony makes it all crystal clear – they are not true champions of the environment and clean energy. If they were, they would be embracing the power and potential of hydroelectricity. Sadly, they only appear to be using legislation as protectionist measure, jealously guarding their market share.

Lexi Osborn is a Future Leaders intern. She graduated from Northwestern University with a degree in political science.

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Senate Committee Report on Billionaires and Eco-Left Activism in Colorado Draws on II Research

August 12, 2014 by michael · Comments Off
Filed under: Environmental Protection Agency, Hydraulic Fracturing, preferred energy 

A key section of the July report issued by the US Senate Environment and Public Works Committee focusing on Colorado environmental activists draws from work that first appeared at the Independence Institute’s Complete Colorado blog.

In a wide ranging, heavily footnoted report released July 30, the Minority Staff of the United States Senate Committee on Environment and Public Works demonstrates the confluence of the Environmental Protection Agency, eco-left activists, and what it calls the “Billionaire’s Club” in a complicated, tax-evading, multi-million dollar philanthropy scheme of dark money:

“Through these arrangements, the Billionaire’s Club gains access to a close knit network of likeminded funders, environmental activists, and government bureaucrats who specialize in manufacturing phony “grassroots” movements and in promoting bogus propaganda disguised as science and news to spread an anti-fossil energy message to the unknowing public. Not only is the system incredibly sophisticated, but the Club’s attorneys and accountants have mastered the loopholes and gray areas in the tax code, which enable them to obtain a full tax benefit, even when the recipient of the grant is not recognized as a public charity, and even if the money indirectly and impermissibly funds political activities.”

The report finds fault with the billionaires’ “scheme to keep their efforts hidden and far removed from the political stage,” which they characterized as “deliberate, meticulous, and intended to mislead the public.”

“While it is uncertain why they operate in the shadows and what they are hiding, what is clear is that these individuals and foundations go to tremendous lengths to avoid public association with the far-left environmental movement they so generously fund,” the report authors wrote.

Highlighting the byzantine tax procedures used to cloak the various foundations and individual donors, the report used case studies of efforts targeted in several different states, including Colorado.

In the section on activism targeting hydraulic fracturing, the report singled out New York anti-fracking efforts that later manifested in Colorado:

The same billionaire foundations behind the New York anti-fracking efforts have also moved into Colorado through two coalitions – Local Control Colorado and Frack Free Colorado, which are directly affiliated with the NY-based groups already discussed. Local Control Colorado claims to be, “a coalition of community, consumer and public interest groups from across Colorado” promoting an anti-fracking ballot measure. However, they list DC-based Food & Water Watch, which is funded by CA-based Schmidt and Tides, and NY-based Park, as part of the coalition. Food & Water Watch is also listed as a partner to another member of the Local Control Colorado coalition, Frack Free Colorado (FFC). Self- described as a “collaborative, grassroots movement that works to raise awareness about the dangers of fracking,” FFC’s website states the group is “a people’s movement that consists of concerned citizens, companies … and organizations.” However, at least two of the organizations listed as a member of FFC – Artists Against Fracking and Food & Water Watch – are based in New York and Washington, DC. Interestingly, FFC has reportedly tried to hide its partnership with another NY-based organization, Water Defense.

The attempt to keep these connections secret include removing evidence from the group’s web pages, as first reported by CompleteColorado.com in November 2013.

But the connections are repeatedly clear and demonstrable, and include the names of several specific individuals:

In addition to the funding and partnership ties, these schemes have one key employee in common who binds these cross-country efforts: Russell Mendell. Mendell previously worked for three of the NY-based organizations – Frack Action, New Yorkers Against Fracking and Water Defense. While at Frack Action in November 2011, Mendell organized a rally of activists in front of the White House calling for the rejection of the Keystone XL pipeline. Mendell was also active in the Occupy Wall Street movement, once stating that Occupy was “about linking arms between the various movements … there’s not a lot that separates the environmental movement and Occupy Wall Street.” In 2012, Mendell, along with another Water Defense employee, Ana Tinsely, left to move across the country and work for FFC in an apparent coordinated effort to apply the same activist tactics used in New York to the attack on fracking in Colorado. Overall, these schemes illustrate a model with FFC and Local Control Colorado “grassroots” coalitions that bind efforts via partnerships with billionaire-backed groups that are far from local.

The report included the following diagram:
ffc diagram

Simon Lomax, a Denver-based energy industry consultant and spokesman for Energy In Depth, told Complete Colorado that none of the revelations are particularly surprising.

“This report confirms yet again that national ‘ban fracking’ groups and their ultra-rich donors have spent years campaigning behind the scenes to wipe out one of Colorado’s most important industries. I don’t know who they think they are fooling any more, but I must admit, it’s kind of amusing to watch guys like Russell Mendell scramble to hide their ties to Occupy Wall Street, Water Defense, Food & Water Watch and other fringe political groups,” wrote Lomax.

But this is not just about eco-left activists pushing a few ballot measures, as they did in 2013. This year, the stakes are much higher.

“Believe it or not, Congressman [Jared] Polis is siding with this cast of characters against Colorado’s working families and practically the entire business community of our state. If he throws his millions behind the activists and their cause, he’ll be bankrolling the permanent expansion of an extreme and angry form of political campaigning in Colorado that isn’t just anti-energy, but anti-business and anti-jobs,” Lomax concluded.

crossposted from Complete Colorado

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Independence Institute at the “Stop the EPA Power Grab” Rally

August 6, 2014 by michael · Comments Off
Filed under: Environmental Protection Agency, Legal, Legislation, preferred energy, renewable energy 

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More than 400 people turned out last week for the “Stop the EPA Power Grab” rally for affordable energy just across Lincoln Avenue from the west steps of the Capitol.

Coal miners, their families, representatives of more than 20 allied mining and natural resource groups, union members, business leaders, and affordable energy activists from Colorado and many states across the Rocky Mountain region gathered to address the Environmental Protection Agency’s “listening tour” for its newly unveiled “Clean Power Plan.”

The Independence Institute was a co-sponsor of the event, along with Americans for Prosperity-Colorado, the Colorado Mining Association, and several other business and civic groups from Wyoming, Montana, and Utah. Union groups represented included the AFL-CIO of Wyoming and Boilermakers of Montana.

Over the next two years, the EPA expects each state to develop its own plan to reduce carbon emissions by 30 percent below 2005 levels.

These regulations are designed to hurt coal–and by extension, will harm low income, minorities, the elderly, and rural communities that rely on coal for affordable, reliable energy. The rule will likely artificially raise the price of electricity substantially, while inefficient and more expensive sources of energy are substituted.

While agnostic on the question of energy sources, the Independence Institute is not agnostic on the intrusion of government in the free market energy arena, and believes that each state’s energy mix should be market-driven, not shaped by onerous and far-reaching regulations that stifle competition and raise electricity rates.

That was the message the Independence Institute wished to share with the attendees last week.

The text of my speech, more or less as delivered:

Good afternoon! My name is Michael Sandoval and I’m an energy policy analyst and investigative reporter for the Independence Institute, and I’d like to tell you a little bit about how mining brought my family to Colorado 86 years ago.

More than 100 years ago, my great-grandfather Anthony, a poor Italian immigrant, moved to Utah to mine coal and achieve the American Dream–earn a living for his growing family. With the money he earned from coal mining, he moved to Denver’s Little Italy, and in 1928, along with his son–my grandfather–he purchased a grocery store that was a fixture in the Italian-American community for 7 decades, eventually becoming an historic landmark.

I stand before you a product of that rich mining heritage, and I am deeply grateful for it.

I also stand WITH you. I will NOT let the EPA CRUCIFY COAL–to use the words of Al Armendariz, former EPA administrator and now Sierra Club’s Beyond Coal campaigner.

Our natural resources are both a blessing and a driving economic force in our region. They provide tens of thousands of good-paying jobs and they keep the lights on and, this time of year, the air conditioning running not just for us but for our most vulnerable community members.

But EPA outsiders have decided that a different energy path should be followed. They pay lip service to those affected by having a handful of “listening tours” AFTER they’ve decided which predetermined policy course they should undertake.

That is why we are here today. To let the EPA know that we already have ABUNDANT AFFORDABLE, AND MOST IMPORTANTLY, RELIABLE ENERGY.

The Independence Institute is agnostic on energy sources–we do not care if the energy comes from hydro, coal, solar, natural gas, nuclear, or wind–but we are not agnostic on the subject of government intrusion into the energy sector–free energy markets, not preferred energy mandates, should guide our economy.

Achieving our own energy mix should come from market forces as businesses and consumers choose what is best for them, not onerous regulations imposed by anonymous EPA bureaucrats.

Government agencies like the EPA or the Department of Energy should NOT be in the business of picking energy winners and losers with this proposal, which EPA DIRECTOR GINA MCCARTHY ADMITTED “ISN’T ABOUT POLLUTION CONTROL” JUST LAST WEEK IN A SENATE COMMITTEE.

THIS PITS corporate cronies–WHAT MCCARTHY DUBS “INVESTMENT OPPORTUNITIES IN CLEAN AND RENEWABLE ENERGY” against the poor, the elderly, minorities, rural communities.

Nothing was more poignant than last October, when the EPA last made a stop at its Region 8 office, as miners and rural business owners and suppliers–along with their families–were forced to plead for their livelihoods with agency representatives.

We are here, along with all of the other organizations and friends here today, to say NO–say it with me–NO–to the EPA’s energy power grab.

DON’T BE FOOLED into thinking this is just about coal, or that hydraulic fracturing is just about natural gas. Folks, this is about an agenda for putting an end to the use of ALL of our natural resources, not just in Colorado, but in the entire Rocky Mountain West.

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Rising Energy Prices Lead to the Highest Inflation Rate in 18 Months

June 24, 2014 by michael · Comments Off
Filed under: New Energy Economy, preferred energy 

By Henry Zhang

On June 17th, the Bureau of Labor Statistics (BLS) released its monthly consumer price index report. This included statistics regarding consumer prices in May 2014 and year-to-year inflation. Of note is that in the Western Region[1], from May 2013 to May 2014, electricity prices rose 2.8 percent and total energy prices rose by 3.1 percent.[2] Compare those figures to 2.3 percent increase in average consumer prices over the same time period. In fact, according to the Denver Business Journal, the year-to-year price gain in energy was tied with medical care for the largest price gain of any major category used to calculate inflation.[3]

(Here is a screenshot of the relevant BLS Western Region data. Energy prices are boxed in red)

Untitled1

Also from the Denver Business Journal article:

“The monthly increase [in the West] was largely influenced by higher prices for electricity,” BLS said. “Overall, energy costs advanced 4.6 percent over the month.”

Ten of the 13 states that comprise the BLS’ Western Region have some sort of renewable portfolio mandate over the next 15 years. This means that the state must generate a certain proportion of its electricity from renewable sources.[4] For states like Colorado that have been endowed with plentiful coal reserves, this requires replacing electricity from coal, which is relatively inexpensive, with electricity from wind and solar, which is relatively expensive. This, in turn, leads to higher electricity prices, which hurt businesses and consumers alike and can “inflict significant harm on the state economy.” [5]

On a national level, where 37 out of the 50 states have enacted renewable portfolio standards or goals, consumer prices rose 2.1 percent from May 2013 to May 2014 while electricity prices rose 3.6 percent and total energy prices rose 3.3 percent. For the US, like for the Western Region, energy prices experienced the largest percentage increase of all of the major consumption categories used to calculate inflation.

From 2004, when Colorado’s Renewable Portfolio Standard (RPS) was passed, to 2012, the latest year for which data is available, the average retail price of electricity for all sectors increased from 6.95 cents per kilowatt-hour (kWh) to 9.39 cents per kWh, a 35 percent increase.[6] This is equivalent to a 3.76 percent average annual increase. For residential consumers of electricity, the retail price rose from 8.42 cents per kWh in 2004 to 11.46 cents per kWh in 2012. This is a 36 percent increase, equivalent to an average annual increase of 3.85 percent. In the eight years after the RPS was passed, both figures for the annual growth rate in the price of electricity are greater than the average rate of inflation.

For comparison purposes, in the eight years leading up to 2004 (1996-2004), average retail electricity prices only rose 15 percent, from 6.05 cents per kWh to 6.95 cents per kWh. This is an annualized growth rate of 1.73 percent. What more, for residential consumers, the annualized growth rate from 1996 to 2004 was just 1.46 percent. Thus, in the eight years before the RPS was passed, both figures for the annual growth rate in the price of electricity are less than the average rate of inflation. For a typical Colorado household,[7] which spends around $1065 per year on electricity,[8] the difference between an annual 3.85 percent rate increase and an annual 1.46 percent rate increase is an extra $270, per household, spent just on electricity over the course of 10 years. Furthermore, this number is much lower than the true cost of the RPS to Colorado households. It doesn’t take into account the billions of taxpayer dollars that have gone to the energy sources, like wind and solar, which contribute to the rapid rise in electricity prices.

Affordable energy and electricity prices are the bedrock of a strong, healthy economy. Increases in the price of electricity that outpace inflation and real income growth squeeze the spending power of all consumers. Ordinary people like you and me need affordable, dependable electricity for a myriad of purposes that enhance our standard of living. Businesses need a steady electricity supply to produce the goods and services that we consume. A justification of the cost of rapidly increasing electricity prices would require more than the rhetoric of environmental benefits. It would require clear evidence, from detailed, rigorous analyses, that the added value of environmental benefits exceeds the lost jobs and economic malaise caused by higher electricity prices.

Henry Zhang is a Future Leaders summer intern. He is a rising sophomore at Swarthmore College in Pennsylvania, majoring in mathematics and economics.


[1] The Western region consists of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming (link)

[2] BLS West Report (link)

[3] Mark Harden, Denver Business Journal. “Biggest annual price gain since 2012 in Colorado, the West” (link)

[4] Database of State Incentives for Renewable Energy (DSIRE) map (link)

[5] Heartland Institute study on Colorado’s RPS (link)

[6] Data from Energy Information Administration (EIA) (link)

[7] US Census Bureau: Colorado Quick Facts (link)

[8] 775 kWh/month * 12 months/year * 11.46 cents/kWh * (1.0385/1.0146)10 = $1325, which is $270 greater than $1065

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Sputtering Wind Energy Prompts Transmission Cost Concerns from Xcel

May 28, 2014 by michael · Comments Off
Filed under: preferred energy, renewable energy, wind energy 

Growing transmission costs for wind-generated electricity have prompted Xcel Energy to seek approval for rate hikes to smaller utilities using Xcel’s transmission lines to reach their consumers:

Xcel wants the utilities to pay for its costs associated with having supplies of reserve power ready to go in case the wind suddenly dies, said Terri Eaton, Xcel’s director of federal regulatory and compliance efforts.

Currently, those costs are paid by Xcel’s business and residential customers, Eaton said.

If the transmission lines customers can supply their own back-up power supplies, they wouldn’t be charged under the proposed rates, she said.

Readily available, back-up power supplies are critical to keep the transmission grid in balance and avoid blackouts that can occur when a big source of power suddenly disappears, Eaton said.

Xcel’s hikes would hit rural cooperatives and other utilities should the Federal Energy Regulatory Commission approve the rate hike at the beginning of 2015.

But what, exactly, does Eaton mean when she refers to “reserve power ready to go in case the wind suddenly dies”?

“We’ve seen some dramatic wind fall-offs in really short periods of time,” Eaton said.

Xcel has already experienced such falls offs, when “several hundreds of megawatts of wind” drops dramatically — and swiftly — due to changes in the wind, she said.

“Sometimes the wind is just howling, and an hour later the wind has calmed — and it’s in those circumstances that we need to have reserves available to pick up the load,” Eaton said.

In such cases, backup power supplies typically come from natural gas-fueled power plants, she said.

The tariff proposed by Xcel would help cover the costs when the wind “suddenly dies.”

The intermittency of wind has been widely discussed, and no amount of forecasting or improved efficiency will spin a wind turbine’s blades if the wind isn’t blowing.

In 2012, a study examined wind generation in Illinois at the height of a summer heat wave, when energy demands rise to yearly highs. The author found that just 5 percent of installed wind capacity was available during that outbreak of record temperatures, and at times, “virtually nonexistent.”

Earlier this year, wind energy proponents touted the example provided in Texas–wind had saved the day. But a closer examination of the figures from the Electric Reliability Council of Texas (ERCOT) demonstrated that contrary to claims that wind had bailed out conventional sources of electricity by ensuring grid reliability, wind had actually fallen so substantially that Texas turned to other sources to meet the extra 1,000 megawatts of demand on January 6. Both scheduled and unscheduled plant closure elsewhere had left Texas with a gap during a record cold snap, a gap that wind was unable to fill.

As the Institute for Energy Research wrote in January, only 3.2 percent of the energy needs of the Texas grid operated by ERCOT came from wind, while 83 percent of Texas wind turbines “were unavailable during peak demand.”

ERCOT itself continues to rate its “wind power at 8.7 percent of its installed capacity” for 2014 during the periods of highest demands, which typically occur in mid-to-late summer. For nearly 12,000 megawatts of installed wind capacity, only 990 megawatts are considered reliable for forecasts computed by ERCOT for 2014. That’s like having the equivalent of 12 1,000 megawatt power plants built and only 1 online when summer energy demand spikes.

As a percentage, ERCOT figures wind to provide just 1.3 percent of the total amount of energy it needs this summer, rising to 2.2 percent by 2017 according to its own projections.

As for Colorado, under Senate Bill 252, rural cooperatives must reach 20 percent renewable energy by 2020.

Tri-State Generation and Transmission Association spokesman Lee Boughey acknowledged the rising costs of integrating ever-greater amounts of intermittent energy supplies like wind.

“As more intermittent resources are added in the region, we understand the need to address the higher costs of integrating and balancing power,” Boughey told the Denver Business Journal.

Those costs were highlighted in a March post that examined the integration of wind and other intermittent energy sources to the reliability of the grid operated by Public Service and regulated by the Public Utilities Commission (PUC), under the state’s preferred energy mandate:

The concern over infrastructure costs and the cost to ratepayers, as well as the challenge of incorporating ever-larger amounts of intermittent generation sources like solar and wind, is not a new topic at the PUC.

In June 2012 comments by PUC staff engineer Inez Dominguez indicated that off-peak load and wind generation in particular was “alarming.”

The integration of intermittent sources like wind would overwhelm the system, either with higher costs or decreased reliability. Bringing in wind and curtailing conventional, coal-fired generation during off-peak periods would result “in an economic penalty to the Public Service customers because more expensive wind generation would be supplying their load.”

Cutting off the wind, however, would also penalize ratepayers, as the “take or pay” agreements give wind first priority.

But the Public Service engineer also highlighted reliability concerns. “In its simplest terms as it concerns the customers, reliability deals with keeping the lights on. This reliability issue may occur when the wind suddenly stops blowing and a significant amount of wind generation is lost to the balancing authority,” Dominguez said.

“When this event happens, the balancing authority needs to replace the lost generation quickly enough to keep from tripping off the load. This means that the generation in reserve to cover such an event has to be quick enough in its response to cover the lost generation,” Dominguez continued.

For Colorado ratepayers, this backup generation comes from “gas fired combustion turbine generation reserves” that displace “more economic base load coal fired generation,” only adding to the cost, and “complexity” of the load balancing requirements.

According to Dominguez, these examples suggested a “flag that Public Service may have too much wind generation.”

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