A 2011 Independence Institute paper was the first to suggest that the Governor’s Energy Office (GEO) needed a serious dose of transparency due to its inability to clarify how it spent millions of dollars of taxpayer money. Colorado’s State Auditor validated our findings in a recently released audit.
Colorado’s Office of the State Auditor blasted the Governor’s Energy Office (GEO), now called Colorado’s Energy Office (CEO), for shoddy accounting and management practices within the formerly off-budget agency.
Among the criticisms the report levels at the CEO:
- CEO was unable to demonstrate that $252 million spent over the past six years was spent cost-effectively.
- CEO does not calculate or maintain a comprehensive, annual budget or budget-to-actual data for any of the 34 programs administered during Fiscal Years 2007 through 2012. As a result, CEO could not determine the total cost or the total amount spent for any of its programs.
- CEO program managers have not been required to manage programs within a budget, though they are responsible for requesting and justifying program expenditures.
- Of the eight programs we reviewed in-depth, staff responsible for three programs could not identify the program’s goals or say whether the goals had been achieved.
- Of the 22 contracts we reviewed, 20 had incorrect or missing information in CMS, the state contract database; six were missing required performance elements; and 13 were missing required contractor progress reports.
- Of the 59 payments to contractors we reviewed, 10 totaling $1.5 million were not supported by adequate evidence of contractor progress on contract deliverables.
- Of the 40 travel and other expenditures we reviewed, 16 lacked appropriate approval and justification documentation. For example, in one instance CEO incurred $25,000 for a cost supported only by the statement, “2008 Membership.” In another instance, CEO paid $1,500 for an ex-employee to attend training after termination, without documentation demonstrating how the cost was reasonable or necessary.
- CEO does not maintain consistent, centralized data-keeping systems to support programmatic work, and has not established an operational framework that includes guiding policies and procedures, or staff training and supervisory review.
Toward the end of the nearly 50-page report, the State Auditor concludes:
Overall, we found deficiencies in CEO’s management policies and practices, including deficiencies in CEO’s internal accounting and administrative control systems. All together, the issues we identified lead us to question CEO’s ability to implement programs and projects successfully.
The State Auditor’s finding are consistent with, perhaps even worse than, what former Independence Institute intern Kyle Huwa discovered in Summer 2011 when he researched three years worth of spending within the Governor’s Energy Office. In his paper titled “Governor’s Energy Office Needs a Dose of Sunshine,” which served in part as the catalyst for the audit, Huwa wrote:
- The Governor’s Energy Office (GEO) of the State of Colorado spent a total of $121,652,884.75 from January 2008 to November 2010. This report aims to clarify and provide transparency to the GEO’s spending. Despite best efforts, the exact nature of many of the expenditures remains unclear.
- Total Expenditures (minus some salaries) during this period: $121,652,884.75
- Expenditures that could not be identified and GEO did not clarify: $9,021,060.23
- Expenditures on cell phones: $51,629.22
- Expenditures on travel: $455,656.06
- Expenditures to corporate entities: $27,337,389.78
- GEO received $15,797,032.91 from the Colorado “General Fund – Unrestricted”
- “Off-budget” status means little legislative oversight
Based on his research, Huwa suggested that:
The Colorado State Legislature should ask the Office of the State Auditor to conduct an audit of the GEO to ensure proper use of funding and adherence to its stated purpose; and the Legislature should also consider structurally changing the long-term oversight measures in place to guarantee continued accountability and transparency in the GEO.
Shortly after the paper’s release in 2011, State Representative and Legislative Audit Committee member Cindy Acree told CBS4 in Denver that she would call for an official audit “to uncover everything the office is doing” especially in light of the unaccounted for $9 million of taxpayer money.
These problems occurred during Governor Bill Ritter’s administration when former state legislator Tom Plant headed up the agency. Plant released a statement at the same time defending his tenure: “There are not missing funds. All funds, revenues and expenditures can be fully accounted for.”
Based on the State Auditor’s findings the energy office under Plant was mismanaged in every area.
Plant still works for the state and his old boss Bill Ritter. Both men are at Colorado State University (CSU) in Fort Collins where Ritter earns $300,000 as the Director of the Center of the New Energy Economy, while Plant pulls in roughly $72,000 as a part-time Senior Policy Advisor according to CSU’s faculty salary database.
The numbers are in, and they aren’t pretty. Four of the largest cost driving pieces of legislation enabling Colorado’s New Energy Economy cost Xcel Energy ratepayers nearly half a billion dollars in 2012 alone. Adding insult to injury, some of the electricity produced wasn’t needed in the first place according to a just released report from the Independence Institute’s energy policy analyst William Yeatman. So Xcel ratepayers paid handsomely for electricity that ended up as surplus.
Using Xcel’s regulatory filings Yeatman determined:
- In 2012, the New Energy Economy cost Xcel ratepayers $484 million – more than 18 percent of Xcel’s total electricity sales. Based on 1.4 million ratepayers, the New Energy Economy cost $345 per ratepayer in 2012.
- Due to a depressed economy, there is an oversupply of electricity generation onXcel’s system, which means Xcel ratepayers spent $484 million on the New Energy Economy in 2012 in order to obtain electricity that they did not need
Yeatman also breaks down the cost by each of the four pieces of legislation, which includes the renewable energy mandate and its massive $343,000,000 cost. It’s clear that State Representative Max Tyler’s and former Governor Bill Ritter’s fanciful promise of a two percent rate cap is much different in reality.
Prior to the New Energy Economy, Colorado worked on a least cost principle meaning utilities were to deliver reliable power to ratepayers in the most cost effective manner. When it comes to renewable mandates and the New Energy Economy, state lawmakers would be wise to remember economist Milton Friedman’s words, “there’s no such thing as a free lunch.”
For the last four years, the state of New York has imposed a moratorium on hydraulic fracturing supposedly to give Governor Andrew Cuomo time to study the process before making a decision on whether or not to lift it.
Four years seems like a long time to study a process that has been around for decades and used safely and successfully in multiple states during that time. Now we may have some evidence as to why it has taken that long.
Last week the New York Times reported Gov. Cuomo, a democrat, buried a state analysis concluding that hydraulic fracturing can be performed safely in the empire state. According to the Times, Cuomo “has long delayed making a decision, unnerved in part by strident opposition on his party’s left.”
Coming from a politically savvy family (his father Mario Cuomo was Governor from 1983-1994), Cuomo is no stranger to party squabbles, which makes this situation even worse. A seasoned politico, Cuomo is so frighten by his eco-left flank that instead he chose to bury the facts, bury the science that came from his own state agency.
Based on the degenerating fracking dialogue in Colorado, Cuomo’s fears are justified. He may have read how the eco-left has attacked Colorado democrat Governor John Hickenlooper, a former geologist, for his support of fracking. Or Cuomo could have watched this scary video of protesters getting in Hick’s face and surrounding his car. Or maybe he saw the “Faces of Hate” in Boulder.
These tactics are meant to intimidate and squash free speech. They seem to work in New York.
Many people will uncritically blame fossil fuel use for recent warm weather. But they are blind to how fossil fuels have reduced climate-related deaths since the 1920s. Since then, climate-related death rates have decreased by 98 percent, explains a Reason Foundation study by Indur Goklany. During this time, carbon dioxide emissions increased significantly.
Thanks to the fertilizers, pesticides, irrigation, and farm machinery enabled by fossil fuels, increased global food production has made droughts less deadly. Where extreme weather leaves people hungry and injured, fossil-fuel based transportation enables fast delivery of food, medical supplies, and disaster response units.
Wealth is a population’s best protection from climate risks, and wealth creation requires affordable, reliable energy. But billions of people in poor under-developed countries are still very vulnerable to climate risks. They need affordable and reliable energy — now. Obstructing their use of fossil fuels endangers their lives.
And droughts? Two recent studies published this year challenge the notion that global warming contributes to them. In the Journal of Climate, CU-Boulder and NOAA researchers “conclude that projections of acute and chronic [increases in severe droughts] … are likely an exaggerated indicator for future Great Plains drought severity.” In the journal Nature, Princeton University researchers find that “there has been little change in drought over the past 60 years.” In the same issue of Nature, a lead IPCC author wrote that “the findings imply that there is no necessary correlation between temperature changes and long-term drought variations.”
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“The Industrial Manifesto,” by Alex Epstein
“The function of the Human Relations Commission is to foster mutual respect and understanding and to create an atmosphere conducive to the promotion of amicable relations among all members of the city’s community.” Boulder Human Relations Office
For a community with an “Office of Human Rights” and is home to a university with a multi-million dollar diversity department, Boulder was anything but an atmosphere of mutual respect and tolerance of diverse opinions during a December 4 public hearing on land use and hydraulic fracturing.
Newspaper (Denver Post, Daily Camera) accounts of what happened that night do not adequately convey how quickly events spiraled out of control, so much so that anti-fracking activists, including children, took over and forced Boulder County Commissioners Cindy Domenico, Deb Gardner, and Will Toor from the room.
With the commissioners gone, a group of well-coached child activists, who call themselves “Earth Guardians,” took charge and chanted an anti-fracking rap, which the adults repeated in a cult-like manner. Then the “Earth Guardians,” seated in chairs reserved for the county commissioners, symbolically voted to ban hydraulic fracturing.
This behavior wasn’t limited to a few rude attendees. Dozens of adults participated and encouraged the children’s inappropriate behavior. Paul Falkenberg of 23rd Studios posted a video of the chaos, which provides a more accurate portrayal of how the situation deteriorated at the start of the hearing.
After order was restored some 30 minutes later, the meeting proceeded. Wendy Wiedenbeck, community relations advisor for Encana Oil and Gas, provided testimony on her company’s position about possible new fracking regulations. A man (presumably Falkenberg) taped Weidenbeck’s six minute testimony and can be heard interrupting her, which included a suggestion that the community “tar and feather your [Wiedenbeck’s] ass.”
As troubling as those incidents are, they pale in comparison to the treatment that Wiedenbeck and another female colleague endured after they left the hearing. The same man who taped Wiedenbeck’s public comments, along with several others, harassed and threatened the women as they walked back to their vehicle calling them “killers,” screaming that they are “poisoning our children,” and shouting at them to leave Boulder and never return because they aren’t welcome; they aren’t wanted. Fear is obvious on the face of the young blonde woman who walked with Wiedenbeck, but it did not deter the mob.
The angry anti-fracking gang menacingly reminded the women “we know your name,” and followed up with “this [harassment and threats] is a shadow what is to come.” Watch the video (begin at the 6:27 mark) to get the full impact of the unadulterated hatred these people demonstrated toward Wiedenbeck who was simply doing her job.
An interesting side note, research into 23rd Studios and Paul Falkenberg reveals he recently moved to Boulder from New York. His area code is from Manhattan, which is ironic since part of his strategy is to question where she lives, where her children go to school and to demonize Wiedenbeck assuming she isn’t part of “the community.”
This video conjures up the image of the iconic photo of Elizabeth Eckford, one of the Little Rock Nine, who bravely endured a “thicket of racism” when she walked alone into Little Rock High School on September 4, 1957. A photographer captured the hatred on a young white woman’s face as she screamed behind the black teenager.
Like the conduct of those white students in 1957, the behavior captured on these videos is meant to intimidate reasonable people into silence. Who would want to risk that kind of treatment just to support fracking?
Even the Boulder County Commissioners recognized it for what it was – eco-left thugs trying to intimidate and silence any dissent. The next day, December 5, the commissioners issued this statement:
The Boulder County Board of Commissioners deeply disapproves of the conduct of certain individuals who came to disrupt the public hearing on proposed Land Use Code regulations for oil and gas development in unincorporated Boulder County last night.
As a county, we have a long history of respecting the First Amendment rights of all, and as a Board we greatly respect and appreciate the opinions and information which was brought forth at the hearing and for the respect and conduct of the majority of attendees once the hearing was underway.
The troubling activities last night included the disruption at the beginning of the hearing by a group of individuals intent on overpowering anyone in the room with an opinion different than their own; the jeering of a spokesperson from the oil and gas industry during her testimony – and mob harassment, cursing at and intimidation of the same representative and her colleagues as they left the building and walked several blocks to their cars; a bullying atmosphere in and around the hearing room; and outbursts of cheering for threatening rhetoric aimed at quashing opposing opinions.
Suppressing alternative comments and shutting out voices through intimidation and fear is not part of the democratic process we hold dear. As your publicly elected officials, we strive to create a safe environment for people of all opinions to come forward and provide input and feedback in our public hearings.
As we mentioned repeatedly during the hearing last night, we call upon residents to be considerate of all by allowing everyone’s voice to be heard in a respectful manner.
Last night’s efforts by a small segment of attendees to threaten and intimidate a speaker walking to her car was nothing short of shameful. Public hearings should create a space for everyone to feel comfortable to participate. Furthermore, any speaker should be able to attend and leave a public hearing free of threatening harassment.
As much as it pains us to do so, we will be creating a security plan for future hearings to ensure that everyone is made to feel welcome for taking the time to let his or her voice be heard. In the interest of helping to create this safe environment, the plan will entail the removal of individuals who elect not to participate in civil discourse and the prosecution of individuals who threaten the safety of other individuals.
From the perspective of the Independence Institute, hydraulic fracturing is a mature process and a safe and reliable way of extracting oil and natural gas that otherwise may not be recoverable. It is an economic and environmental blessing for Colorado and the nation. For more information, please read “Frack Attack: Cracking the Case Against Hydraulic Fracturing.”
While we support fracking, we also acknowledge that no energy resource is 100 percent risk free. But to suggest that the fracking process kills babies is so utterly absurd, it should be dismissed immediately and those making the claims should be discredited. That isn’t likely to happen because people and the industry are afraid of the well-funded, angry so-called environmental groups. Critical thinking is the victim. The eco-left’s irresponsible verbal venom is killing any kind of reasonable public debate.
Boulder isn’t the only place this has happened. Just a few months ago Longmont anti-fracking activists swarmed Democrat Governor John Hickenlooper, a former geologist and fracking supporter, screaming “dirty water, dirty air, we get sick and you don’t care” and plastering signs on the windshield of his vehicle as he tried to leave a community event. Watch the video here. Now, there is an online petition to recall him.
The eco-left doesn’t want to compromise on regulations. After accepting more than $25 million to kill coal by advocating conversion of coal fired power plants to natural gas, groups like the Sierra Club now want to rid the U.S. of natural gas. Of course this isn’t even remotely possible and would be an economic and environmental disaster.
The time has come for reasonable people to stand up to eco-hate and intolerance. For those with the courage to show their support for fracking and find pleasure in irritating the extreme eco-left, email email@example.com. The Independence Institute will send you a free “Mothers In Love with Fracking” T-shirt. Just pay $5 for shipping and handling. Wear it if you dare!
Last week Minnesota-based Xcel Energy announced that it beat market expectations with third quarter earnings increasing an impressive 18 percent. Colorado’s largest investor owned utility cited hot weather, rate hikes, and lower costs as reasons for its strong 3Q performance.
Colorado (PSCo) outperformed all other Xcel subsidiaries with a 24 percent increase for the third quarter 2012 versus 2011. For the nine months ending September 30, 2012, Colorado customers provided a 19 percent increase in earnings to Xcel shareholders while total company (sum of all subsidiaries) earnings per share are up only ten percent.
Xcel Energy services electric and gas customers in Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.
The Independence Institute’s Todd Shepherd, along with this blog, have spent two years covering, and ultimately exposing, what is now the Abound Solar scandal. Understandably, much of the focus is now on Weld County District Attorney Ken Buck’s criminal investigation as well as a Congressional Oversight Committee inquiry into the bankrupt solar panel manufacturer.
Recently released emails on Complete Colorado indicate that, despite statements to the contrary, the White House politicized the Department of Energy (DOE) loan guarantee process for politically well-connected Abound.
But something else within those emails caught my attention reminding me of free market economist and Nobel Prize winner Milton Friedman’s famous quote, “there is no such thing as a free lunch.” In other words, even things that appear to be free have an associated cost.
This basic economic concept is lost on Colorado State Representative Max Tyler’s (D-Lakewood) who in a March 23, 2010, press release bragged about a government-dictated increase in Colorado’s renewable energy mandate:
With HB 1001 we will manufacture and install panels and turbines all over Colorado to capture free energy….The sun will always shine for free, the winds will always blow for free, and our energy production will be cleaner. Renewable energy, green jobs, and a cleaner future — what’s not to like?
At roughly the same time that Tyler publicly fantasized about “free energy,” a credit advisor for the Department of Energy (DOE) loan guarantee program James McCrea was concerned about “major issues” with Abound Solar’s marketability. In an email dated April 1, 2010, just seven days after Tyler’s press release, McCrea explained:
Another issue is the very limited supply of telluride, its potential price trajectory and other demands for it. Related to this is a question of the viability of the Abound panels as compared to other panels and whether there is sufficient benefit to allow the panels to be profitable if Te [telluride] prices really increase. If the price really rises will there be alternative uses that can afford it basically turning it into a non available input for Abound?
I don’t believe we have ever worked with an input material that is so limited. We need to think that through carefully.
Before going bankrupt this summer, Abound produced cadmium telluride (CdTe) thin-filmed photovoltaic solar panels. Cadmium and tellurium, used in the manufacturing of Abound’s panels, are two of the world’s 17 “rare earth elements” that are needed for everything from smart phones to solar panels to high tech weapons systems. My former colleague Michael Sandoval, now an investigative reporter with the Heritage Foundation, and I have written several columns on general issues with rare earth elements.
This email highlights the problem specific to Abound, and McCrea was right to be concerned. According to the December 2011 DOE Critical Materials Strategy the price of tellurium has been going up since 2007:
The price dropped in 2006, but in 2007 resumed its upward trend owing to increased production of cadmium telluride (CdTe) solar cells.
Furthermore, China controls the vast majority of rare earth elements. In August 2012, the Chinese announced an ambitious plan to increase its stranglehold on the world’s available supply of rare earths. According to China Daily the country:
launched a physical trading platform for rare earth metals as part of its efforts to regulate the sector and strengthen its pricing power for the resources.
As the world’s largest producer of rare earth metals, China now supplies more than 90 percent of the global demand for rare earth metals, although its reserves account for just 23 percent of the world’s total.
The article reiterated what Michael and I have said on numerous occasions, mining rare earths comes with a significant environmental cost that green zealots like Tyler completely ignore when claiming solar energy is free and clean:
Mining the metals greatly damages the environment. In recent years, China has come down heavily on illegal mining and smuggling, cut export quotas and imposed production caps, stricter emissions standards and higher resource taxes to control environmental damage and stave off resource depletion.
However, these measures have irked rare earth importers, who complained about rising prices and strained supplies.
But China did exactly what it said it would do in 2009. It drove up prices with reduced output as global demand increased.
China’s rare earth output fell 36 percent year on year to 40,000 tonnes in the first half of the year. Prices of major rare earth products in July remained twice as high as prices at the beginning of 2011, although down from the beginning of the year.
In July 2009, about a year before President Barack Obama announced a $400 million loan guarantee for Abound, Jack Lifton, an expert on sources and uses of rare minerals, wrote a lengthy article for Resource Investor about the availability of tellurium for First Solar, a global leader in cadmium telluride solar panel manufacturering. Lifton’s conclusion should have served as a prophetic warning for Abound and any hope of profitability:
A company such as First Solar, which is critically dependent on a secure supply of tellurium to exist and on an unsustainable growth in the supply to it of tellurium for it to grow and achieve competitive pricing is a big risk for short-term investors. The maximum supply and production levels attainable of tellurium are quantifiable even if the actual production figures are murky, and they do not bode well for the future of First Solar if it must make profits to survive.
The next time you hear a politician like Max Tyler tout the benefits of “free” and “clean” energy, remember Abound Solar because there is no such thing as a free lunch.
Instead of figuring out what happened to your tax dollars with the bankrupt Colorado-based Abound Solar (leaving that to Congress and the Weld County District Attorney Ken Buck), the Department of Energy continues to be the PR firm for the Big Green agenda by promoting energy themed pumpkin carving patterns. Give them credit for including nuclear, but noticeably absent are any patterns for coal, natural gas, and oil, which are the sources for most of the power that Americans demand.
For those kiddos who want to carve pumpkins this Halloween, you can really spook trick-or-treaters with a solar panel or CFL themed jack-o-lantern. The smart kids will carve carbon-based energy sources because they know that affordable, reliable, and abundant energy is what powers our economy.
More solar panels and wind turbines are not solutions to the eco-left’s obsession with global carbon emission according to a new book from University of California – Berkeley visiting scholar Ozzie Zehner titled Green Illusions: The Dirty Secrets of Clean Energy and the Future of Environmentalism.
‘Alternative energy is not a free ride, just a different ride…and there’s no reason to believe it will offset fossil fuel use in a society that has high levels of consumption and is growing exponentially.’
Put another way, renewable energy only makes sense if undertaken in concert with other, more fundamental changes in the way we deploy and make use of energy in our everyday lives. At the moment, we’re really paying attention to the technology end of things, Zehner argues, and without a holistic approach, these innovations get us nowhere.
Zehner wants people to consume less. But there is more to his book than conservation. He argues that some green technology is actually worse than traditional fossil fuels that simply dump CO2 into the atmosphere
Green Illusions explains how the solar industry has grown to become one of the leading emitters of hexafluoroethane (C2F6), nitrogen trifluoride (NF3), and sulfur hexafluoride (SF6). These three potent greenhouse gases, used by solar cell fabricators, make carbon dioxide (CO2) seem harmless.
The main point is that “green energy” comes with a price, both economical and environmental. Go into it with your eyes wide open.
GIGAOM reports that, as of last week, General Electric is putting on hold its plan to be a major solar panel manufacturer in Colorado. According to the self-described emerging technology blog GIGAOM:
General Electric was set to become a major solar manufacturer when it announced a 400 MW factory in Colorado last year. Over a year later, though, it’s putting that plan on hold for 18 months or more while it works on coming up with a more competitive technology, Danielle Merfeld, general manger of solar technology at GE, told us on Tuesday.
It was only last month when a company spokeswoman told me by email that GE was still building its factory and hoping to start production in 2013. But the company reconsidered that plan in recent weeks after seeing solar prices tumbled significantly for over a year, and it stopped the factory building activities last week, Merfeld said.
When GE announced it was getting into the solar panel manufacturing business, several states chased after GE’s $300 million project and the promise of 355 green jobs with an average salary of $50,000. Colorado, specifically Aurora, landed the project after granting $28 million in state and local tax incentives. A glowing Denver Post house editorial from October 2011, called it a “coup,” explaining that “a growing green-energy sector in Colorado is a plus as the nation continues to confront issues of climate change and energy independence.”
Sounding like a broken record (for those who still remember vinyl), but we saw this coming in November 2011 when we predicted dark days ahead for solar manufacturers following layoffs from a Detroit based manufacturer .
A local news outlet, WOOD-TV, had the money quote: ”supply for solar products worldwide is more than double the demand, so there is no need to make more.”
This is bad news for Colorado because taxpayers just threw a bunch of incentives at General Electric to locate a solar panel manufacturing plant in the state. Colorado already has several solar panel manufacturers including Abound Solar, Ascent Solar, and PrimeStar.
While losing a competitor might be good for the remaining manufacturers, an over-saturated market means more dark days on the horizon for solar panel manufacturers and thus for taxpayers.
Since November 2011, Abound has declared bankruptcy, GE has pulled the plug on the PrimeStar project, and Ascent has moved away from panels and into new consumer solar products such as cell phone chargers.
Former Governor Bill Ritter’s green dream for Colorado is turning into a nightmare for taxpayers. The question remains how long can Ritter sustain his own $300,000 job as the green ambassador for Colorado’s New Energy Economy, which appears to be the only real job “created.”