State Senator cites our work as a reason for PUC audit

June 23, 2011 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

State Senator Scott Renfroe (R-Greeley) said in an interview on the Amy Oliver Show on 1310 KFKA that information we published was influential in his decision to request an audit of the Colorado Public Utilities Commission.

Specifically Senator Renfroe cited:

Senator Steve King (R-Grand Junction) joined Senator Renfroe in the audit request. Both lawmakers are members of the politically-balanced Legislative Audit Committee.

According to the Colorado News Agency:

A formal request made earlier this year…asked the state auditor to conduct preliminary research into the activities of the PUC.  The findings of the state auditor will be used for the committee to make a determination as to whether a full audit is merited.

The letter outlines areas for evaluation including transparency, accountability to ratepayers, expenditures, the conduct of PUC members, and whether the commission is indeed living up to its role and mission as a watchdog for consumers.

Senator Renfroe said in the radio interview that the committee will get the “30,000 foot” report from the State Auditors Office at the next committee meeting on July 12 and 13. That report should contain a recommendation either for or against a more comprehensive audit of the embattled agency. Renfroe commented that he cannot predict what the report will say, but with all the questionable issues surrounding the PUC, he would be surprised if the recommendation was against a full audit.  The committee then votes on the recommendation.

We’ve long thought that PUC reform is overdue and accused the commissioners of “gross dereliction of duty.” Hopefully this audit will be a first step in a direction more friendly to consumers and less cozy with industry, elected officials and special interests.

Print Friendly

Oops! No EPA threat over SIP

June 21, 2011 by Amy · Comments Off
Filed under: Archive, CDPHE, HB 1365 

Lawmakers (including those in leadership on both sides of the aisle), Xcel Energy, environmentalists, Colorado Department of Public Health and Environment, the Public Utilities Commission and any other group that championed Colorado’s needlessly expensive, likely illegal Regional Haze State Implementation Plan (SIP) have A LOT of explaining to do.  We were told repeatedly that if we did not implement our own SIP via HB 1291, the Environmental Protection Agency will do it for us. Here’s just one example:

Consider this HB 1365 direct testimony from Ritter administration air quality official Paul Tourangeau (p 3), director of the Air Pollution Control Division,

Q: What if the Regional Haze SIP is not submitted to EPA by January 2011?

A: If the Regional Haze is not submitted to EPA on time, EPA will take over the Department’s regional haze program and regulate utilities and other large sources of nitrogen oxides and sulfur dioxide in the state through an EPA-promulgated Federal Implementation Plan. An EPA FIP would impose federal mandates on the large NOx and SO2 sources in the state, including Xcel facilities.

Turns out that wasn’t true as energy expert William Yeatman exposes in a recent post:

Last Wednesday, the lawyers were proven wrong, when the EPA announced that it would get around to deciding on Colorado’s RHSIP…in March 2012. Thanks to the lies peddled by special interests, Colorado ratepayers are $120 million poorer.

We hate to say “we told you so” but truly we did.

Print Friendly

Fat Cats

April 20, 2011 by Amy · Comments Off
Filed under: Archive, HB 1365 

Wish I had seen this last year when HB 1365, Ritter’s fuel switching bill, was rammed through the state legislature. But it still works for this year in regards to HB 1291.

Print Friendly

Fischer full of hot air when it comes to energy policy

April 8, 2011 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

The Colorado News Agency reported a gem of a quote from  State Representative Randy Fischer (D-Fort Collins). While providing arguments against Representative Kathleen Conti’s (R-Littleton) bill to bring more accountability to the Public Utilities Commission, especially in the area of utility rate increases, Fischer:

refuted Conti’s assertion and countered that cost increases can be attributed to an increase in coal prices and to capital construction by public utilities to accommodate growth in energy demand. Fischer also pointed to a 2009 law that established a 2 percent rate-hike cap on renewables.

“The costs of renewables are going down, and we are on a path that will eventually meet the costs of coal,” said Fischer. “Besides, the rates cannot exceed limits already in place regarding renewables.”

Where to start? First, Fischer is right that the price of coal is more expensive but not because the cost of mining suddenly skyrocketed. Rather, the increase in the cost of coal can be attributed to the Colorado General Assembly passing HB08-1164 which allows for a phantom $20 per ton carbon tax on coal — no other fossil fuel suffers such a tax.  Fischer voted yes.  So, Fischer himself is partially to blame for a higher price on coal in Colorado.

Second, we’ve proven repeatedly that the 2 percent renewable energy rate cap is a sham. From a previous post, my colleague William Yeatman writes:

The incremental costs are listed on consumers’ bills as the Renewable Energy Standard Adjustment (RESA). Since January 2009, the RESA charge has been set at 2 percent, the rate impact limit. For a consumer with a $150 Xcel bill, a 2% RESA charge would be $3 monthly, $36 annually.

Xcel defines the RESA on the monthly statements as representing “2% of an electric bill and funds the renewable energy program as required by Colorado law that asks utilities to generate increasing portions of their electricity from sun, wind and biomass.”  Note with care that the Xcel statement does not say that the RESA covers the cost of renewable energy.

Incremental costs are only a small portion of the total costs of renewable energy that count towards RES compliance. The “non-incremental costs,” which are the total renewable energy costs minus the incremental costs, are recovered through a different monthly fee, the Electric Commodity Adjustment (ECA).

The Public Utility Commission staff’s William Dalton acknowledged confusion over the two fees as he explained the cost-shifting technique in testimony given to the Commission regarding the Public Service Company’s RES compliance plan in September 2009:

This could be a point of confusion to ratepayers and other interested parties: The [Public Service] Company is not exceeding the Renewable Energy Standard at the 2 percent retail rate impact that is borne by ratepayers. The costs above the retail rate impact limit are recovered through other Commission approved cost recovery mechanisms, primarily the ECA. Once the renewable energy resource cost recovery is allocated to the ECA, cost recovery of these resources is no longer subject to retail rate impact criteria or cost cap.

According to the Public Service Company’s 2010 RES Compliance Plan, the ECA is projected to be $6.3 million this year, before it balloons to $141 million in 2012. It then increases exponentially to $738 million in 2020, or almost 23 percent of total retail electricity sales—none of which would count against the 2 percent retail rate impact.

Assuming 1.5 million ratepayers in Colorado (current figure is 1.3 million) in 2020, and the mandated 20 percent renewable standard, the ECA cost alone will average nearly $500 per year per ratepayer.

The 2 percent rate cap does not apply to the preponderance of RES costs. And even where it does apply—to incremental costs—the price ceiling is evaded and exceeded.

But if a lie is repeated often enough, people will believe it even if it defies all the laws of economics.

Finally (for this quote), as for capital construction, Fischer voted for HB 1365, Ritter’s fuel switching bill, which allows for Xcel Energy to recover up 10.5 percent of the cost of its capital construction on new power plants taking another $130 million from ratepayers to Xcel.  No wonder Xcel is so excited about building more.

Several weeks ago CNA reported another of Fischer brilliant statement.  While opposing a bill from Representative Ray Scott (R-Grand Junction) that would prohibit Xcel from implementing its financially oppressive tiered rate structure, Fischer said:

he will vote against the measure, citing the need for a balanced way to address expanding energy needs driven by an increase in population and larger homes with air conditioning. Fischer’s district is not subject to the XCEL rates because Fort Collins utilities are municipally owned and not regulated by the PUC.

“It’s a fair way of distributing the cost of energy,” said Fischer. “People that drive the need for more plants should pay for them.”

As we have proven on this blog, Xcel’s tiered rates are a redistribution of money from Colorado’s working families to Xcel.

Most outrageous for Xcel customers, is that energy company doesn’t even service Fischer’s district so he doesn’t have to suffer the consequences of his own bad energy policy. Lucky for his constituents.

The good news is that both Conti’s (amended) and Scott’s bills moved out of committee and now are headed to the full House for a vote.

Print Friendly

Senate Republicans Ask for Review of CDPHE’s Regional Haze Plan (Bonus: Regional Haze Primer)

February 16, 2011 by williamyeatman · 2 Comments
Filed under: Archive, CDPHE, HB 1365, New Energy Economy 

The Politics Colorado Blog today reports great news:

“Tuesday, Senate Republicans sent a letter to Senate President Shaffer asking Legislative Council to hold a public hearing to review the changes made to the State Implementation Plan (SIP) for implementing regulations for “regional haze”…

…”We think it’s important that Legislative Council hold a public hearing on this effort to give the General Assembly and public more time to consider the impact this plan will have on Colorado,” said Senator Scott Renfroe, R-Greeley.

“Serious questions and concerns have risen about the timing of the information and the data used in the plan,” concluded Renfroe.

As readers of this blog know well, I’ve long railed against the CDPHE’s manipulations of the regional haze rule. In short, the Department has used this regulation to push an anti-coal agenda.

Read more

Print Friendly

CDPHE Lied about HB 1365 Deadline, Coloradans Pay the Price

February 14, 2011 by williamyeatman · 1 Comment
Filed under: Archive, CDPHE, HB 1365, New Energy Economy 

Usually, it takes about 18 months for the PUC to deliberate a major acquisition plan for new power plants. For HB 1365, however, the PUC decided on a $1.3 billion plan, affecting almost 1,000 megawatts of electricity generation, in only four months. According to the PUC staff (p 14), the truncated timeline shortchanged the vetting process, such that the cost and engineering analyses were “preliminary.”

To be sure, the PUC didn’t choose to rush; rather, the compressed timeline for HB 1365 deliberations was mandated by the legislation. HB 1365, which was enacted in April, 2010, gave the PUC until December 15 to finalize a plan. Xcel first pitched its preferred plan on August 13, so the PUC had four months.

Why the rush? The official reason, provided by Colorado Department of Public Health and Environment, was that the December deadline was a necessary evil in order to avoid a federal crackdown. Specifically, the CDPHE argued that the HB 1365 fuel switching plan had to be finalized by December, 2010, so that it could be incorporated into the state’s Regional Haze State Implementation Plan (SIP). According to the CDPHE, if the HB 1365 plan wasn’t completed by mid-December, then it would delay the submission of the Regional Haze SIP–due on January 9, 2011–which would lead to a federal takeover of the state’s air quality permitting.

Read more

Print Friendly

Did the PUC Call Xcel’s Bluff on HB 1365?

February 8, 2011 by williamyeatman · Comments Off
Filed under: Archive, HB 1365 

The PUC finally issued a written ruling addressing appeals to its December decision on a HB 1365 implementation plan. As I noted here, virtually every stakeholder had requested a rehearing. The PUC issued an oral ruling on January 26, but I didn’t listen to it at the time, and media reports covered only the PUC’s rejection of coal interests’ appeals. So, until last night, I didn’t know how the PUC responded to rehearing requests from non-coal stakeholders, like Xcel.

Remember, HB 1365 allows the utility to walk away from the process for whatever reason, and thereby scuttle the legislation. In its appeal motion, Xcel used strong language to express its displeasure with the PUC’s decision regarding cost recovery. It even intimated that it would be willing to sink the process unless it got its way. Without going into too much detail, Xcel wanted to recover costs for “construction work in progress” (i.e., tearing down old power plants, building new ones, and installing pollution controls), as the work was performed, while the PUC insisted on a deferred cost recovery.

Read more

Print Friendly

PUC Denies HB 1365 Appeals

January 28, 2011 by williamyeatman · Comments Off
Filed under: Archive, HB 1365 

Cathy Proctor at the Denver Business Journal reports that the PUC on Wednesday denied appeals of its decision on HB 1365, the Clean Air Clean Jobs Act, legislation that effectively mandates fuel switching from coal to natural gas for almost 1,000 megawatts of electricity generation along the Front Range. As I explained here, virtually every party to this docket filed a motion to rehear the case.

The PUC has yet to post a written decision, and Proctor’s Denver Business Journal focuses on the coal stakeholders to the docket, so I don’t yet know if the PUC denied all appeals, or whether it only denied the coal companies’ motion.

Read more

Print Friendly

Caldara grades Ritter on energy policy

January 11, 2011 by Amy · Comments Off
Filed under: HB 1365, New Energy Economy 

Independence Institute president Jon Caldara tells Energy Now that out-going Governor Bill Ritter gets an “F” for energy policy.

Needless to say, that’s not the same grade Ritter would give himself. In the Governor’s interview with Energy Now, he touted his “fuel-switching” bill designed to kill the coal industry and the renewable energy mandate which forces Coloradans to pay more electricity so we can get power from windmills and solar panels.

Read more

Print Friendly

HB 1365 Update: The Appeals Are in…and Everyone Objects to the PUC’s Decision

January 7, 2011 by williamyeatman · Comments Off
Filed under: Archive, HB 1365 

This week was the deadline to appeal the PUC’s decision on a HB 1365 implementation plan, and judging by the briefs, no one is satisfied that the PUC’s decision passes legal muster.

Here’s a roundup of who argued what, along with links to the appeals:

  • Xcel alleges that the PUC’s decision “fails to put into place one of the cornerstones” of HB 1365. This “cornerstone,” according to Xcel, entails faster rate recovery. The PUC decided that Xcel must wait until each rate case procedure (every 1 to 2 years) for cost recovery of construction work in progress; Xcel claims it is entitled to monthly payment. Legally, Xcel appears to be in the right: Part of HB 1365 awfulness is that it incents Xcel with extraordinary rate treatment. If the PUC holds firm, Xcel can appeal to a state court, or it could walk away from the Clean Air Clean Jobs Act (I’ve discussed that delightful possibility here).
  • Gas Producers objected to the handling of highly confident information, like the long-term gas contract signed between Xcel and Anadarko (this contract is the putative hedge against Colorado’s increased reliance on the mercurial gas market). In particular, Gas Producers sought an amendment to the decision making it clear that the treatment of highly confidential information in the HB 1365 docket would not become precedential for future dockets.
  • Independent Power Producers (“IPPs,” they are power generators that compete with Xcel on the wholesale electricity market) asked the PUC to amend its decision to establish rules that would skew the wholesale electricity market in the IPPs favor, at the expense of Xcel. As HB 1365 skewed the market to Xcel, the IPPs apparently are asking for a quid pro quo.
  • HB 1365 is a bill written by special interests in order to exploit Colorado consumers, yet the feckless Office of the Consumer Counsel had only one complaint with the PUC’s decision (and, moreover, was a non-entity during the hearings). The OCC objected to the PUC’s decision to investigate the use of ratepayer funds to pay for the re-education of Colorado coal miners who lost their jobs because the Governor Bill Ritter picked winners in the energy industry.
  • The most adversely affected parties (Peabody Energy, Coal Miners Association, and the Associated Governments of Northwest Colorado) filed similar appeals. All of them argued that the PUC violated their due process, and they are all correct, IMHO. The PUC seemed to be making up the rules as it went along. Over the weekend, I’m going to write a post about the PUC’s due process problems, but in the meantime, the breadth of the legal challenges described above is the most telling evidence that the PUC was unhinged from any legal moorings.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.

Print Friendly

« Previous PageNext Page »