Testimony on Senate Bill 157: ‘Don’t Implement Clean Power Plan’
Testimony, more or less as delivered on March 17, 2016, on behalf of Senate Bill 157, “Don’t Implement the Clean Power Plan”:
Testimony on behalf of
SB 157 NO TO CPP PLANNING BY CDPHE
March 17, 2016
SENATE AGRICULTURE, NATURAL RESOURCES AND ENERGY COMMITTEE
GREETINGS Mr. Chairman or Madam Chairman and Members of the Committee
Sen. Sonnenberg and Sen. Cooke, and Rep. Dore.
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 157.
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.
We find SB 157 to be consistent with our principles of protecting ratepayers from unnecessary costs associated with the implementation of a likely unconstitutional rule.
In light of the US Supreme Court stay for irreparable harm that would result if the Clean Power Plan was not immediately halted, the decision by this state to proceed with a state plan is unwarranted.
Last week, in testimony from the Colorado Department of Public Health and Environment, executive director Marth Rudolph said:
“I guess what I’m saying is that because we don’t know what the plan looks like, we don’t know what the costs will be. It is certainly our goal to minimize those costs to the greatest extent possible. But I cannot sit here today and tell you that there will be no increase in costs.”
Simply promising to “minimize” the costs of planning and also the cost of implementation of a rule that is without legal weight for the time being due to the Supreme Court stay can not be justified as an expense to Colorado’s ratepayers and taxpayers in light of the costs already known and associated with other fuel switching efforts like HB 1365 or mandates like SB 252, the extensive use of assistance to the renewables necessary to add those sources to the grid, such as the Public Utilities Commission issuing decisions that require wind projects to gain federal Production Tax Credits in order to go forward, nor the multiple other programs designed to make renewables appear cheaper than natural resources that already provide affordable, reliable, and responsible energy sources.
Additional costs—in the form of enormous and potentially catastrophic transition costs—such as capital costs for new electric generating units, will run through to ratepayers as CDPHE admitted would happen last week. These transitions should not be cost-shifted to those who can least afford it at a time when the rule is no longer in effect.
The Independence Institute has documented the skyrocketing increases in electricity rates for Colorado’s residential, commercial, industrial, and transportation customers. From 2001 to 2015 Colorado has seen a residential increase of more than 60 percent, 8 percent higher than the average for all Mountain states. For all sectors, Colorado has experienced a 62.5 percent increase, 15 percent higher than the Mountain states and 23 percent higher than the US average. This far outpaces the 24 percent increase in median income or 34 percent increase in inflation over the same period. Finally, Colorado residential ratepayers already pay a 22.5 percent premium above the average for all sectors in the state combined for their electricity. These numbers are a matter of record; they are not based on flawed models projecting extremely high future costs of fuels, like estimates of natural gas prices. Nor are they numbers clouded by confidentiality claims by IOUs like Public Service Company, for electric resource planning, power purchase agreements, and any other matter of ratepayers concern. Any issues with EIA’s historical electricity cost records should be addressed to their methodology and sampling criteria. And, it should be pointed out, that high renewable states like California (41%), Texas (31%), and Iowa (41%) have seen their residential rates continue to climb ever higher, just like Colorado’s.
For those reasons shielding Colorado’s electricity ratepayers from any adverse impacts of compliance costs caused by implementation of this rule would be consistent with the principles of the Independence Institute.