War on Rural CO: Economic impact of SB 252

April 15, 2013 by Amy · Comments Off
Filed under: Archive, Legislation, New Energy Economy, renewable energy 

The impact of SB 252, a bill to raise the renewable mandate on rural electric cooperatives, will be devastating to rural Colorado according to Dr. Roger Bezdek, Founder and President of Management Information Services, Inc. Bezdek released a report titled “The Economic and Jobs Impact of the Proposed Colorado RES” that predicts that, if passed, SB 252 will raise significantly the state’s unemployment rate and electric rates, which directly contradicts what bill sponsors Senate President John Morse and Senator Gail Schwartz have been arguing.

According to Bezdek’s report:

  • At present, Colorado’s unemployment rate is below the U.S. average.
  • With the RES, the state’s unemployment rate would increase to about 15% above the U.S. average.
  • However, job losses resulting from the RES, would be largely concentrated in the predominately rural areas served by the electric coops – many of which are already suffering economically.
  • The unemployment rate in these areas would increase substantially and would be more than 1/3 higher than the state average and more than 50% higher than the national unemployment rate.
  • At present, Colorado’s average electric rate is below the U.S. average.
  • With the RES, the state’s overall average would increase to above the U.S. average.
  • However, with the RES, the average rate to the predominately rural customers served by the electric coops would increase significantly and would be about 14% higher than the national average.

Bezdek draws on 30 years of experience in “research and management in the energy, utility, environmental, and regulatory areas, serving in private industry, academia and the federal government” and provides a grim forecast for those co-op members living on a fixed income. They will see their residential rates go up $20 per month.

Sure seems like a war on rural Colorado.

Colorado RES Impacts 4-12-13 (1) by Amy Oliver

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Colorado Hydro Fails to Put the “New” in Renewable

April 2, 2013 by Amy · Comments Off
Filed under: Archive, renewable energy 

By Brandon Ratterman

Colorado is having trouble defining hydroelectricity. The Environmental Protection Agency (EPA) considers it to be a renewable resource, and the Colorado Energy Office calculates hydroelectric power’s emission rate as equal to wind and solar. Despite these two distinctions, Colorado’s renewable energy standard defines hydroelectricity as renewable only if the generating facility is newly constructed with a capacity of ten megawatts or less, or constructed before January 2005 with a capacity of thirty megawatts or less.

Colorado has 1169 megawatts (MW) of existing hydroelectric capacity. Of that total, 82 percent is generated at facilities with a capacity over 30 MW—meaning it is not “renewable” unless the facility was built in the past eight years. Unfortunately, most facilities do not meet this requirement

According to the most recently released figures, renewables other than hydro produce 9.8 percent of the total net summer electricity capacity. If the total 1169 MW of existing hydro capacity were considered renewable, hydroelectricity would contribute another 8.5 percent of capacity. Instead, only 4.8 percent of hydroelectric power is considered renewable.

Under the current format Colorado will have to fill renewable portfolio standards largely without the help of hydroelectric generation. Unfortunately, this is increasing the costs of the renewable portfolio standard.

At 11.06 cents per kilowatt-hour, Colorado ranked 21st highest nationally in average residential electricity rates according to the U.S. Energy Information Administration. That may not sound too bad, except that the state is well above the average for all Mountain West states. In fact, Colorado has the second highest rates in the Mountain West, just behind Nevada, which actually saw a decrease last year in its residential electric rates.

Furthermore, Colorado has higher rates than any of its neighboring states.  Outside of the East Coast, the only states with higher rates than Colorado are Michigan, Wisconsin, Nevada, California, Alaska and Hawaii.

As was proved in the 2012 snapshot of Colorado’s new energy economy, these high prices are due largely to lawmakers using the RPS to support the wind and solar industries. In 2012 alone Xcel Energy customers paid an extra $343 million for what ended up being mostly surplus electricity.

If high prices are the intent of Colorado’s energy policy, expect those figures to get much worse in the coming years as the state moves closer to the legislative mandate of 30 percent renewable portfolio standard, which is heavily tilted toward wind. However, if self-described environmentalists and the Colorado Energy Office truly care about the environment and economic sustainability then they should embrace hydroelectric power regardless of when it was built, but don’t hold your breath waiting.

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Oregon’s Cannibalism of Environmentalism

April 1, 2013 by Amy · Comments Off
Filed under: Archive, Legislation, New Energy Economy, renewable energy 

By Brandon Ratterman

Almost 60 percent of Oregon’s electricity is generated from hydroelectric power, which is considered by the Environmental Protection Agency (EPA) as a renewable energy resource. However, the state is struggling to meet the mandated renewable portfolio standard (RPS) of 15 percent renewable generation by 2015, as hydroelectricity generated at facilities built before 1995 does not qualify as a renewable resource. Since most hydroelectric facilities were built before 1995, the state has been forced to use wind energy to fill this void. Unfortunately, wind energy in Oregon produces some counterproductive effects.

Bonneville Power Administration (BPA) is one of the main providers of hydroelectric power in Oregon, but because their facilities do not contribute to the mandated renewable portfolio standards, they are forced to give wind producers access to their transmission lines. As a result, the amount of electricity that BPA can supply to the grid is reduced, and BPA is forced to spill excess water over their dams, resulting in increased turbulence and toxic levels of nitrogen.

Oregonians annually spend over half a billion dollars to protect the fish and wildlife, which are now threatened by these increased nitrogen levels. As a result, Oregon courts are requiring hydroelectric producers to remedy the situation, despite the fact that wind energy is the root cause of this issue. Organizations such as BPA are being forced to pay wind producers to power down during times of high runoff.  On average, this is estimated to cost Oregon ratepayers $12 million annually, with potential costs ranging up to $50 million. In return, Oregonians will receive the same electricity, derived from the same energy source, as they did in the past.

The fact that Oregon’s hydroelectric power does not count toward its renewable portfolio standards, even though the EPA recognizes it as a renewable source, proves that the concept of “green energy” is geared toward increased spending that makes electricity more expensive.  If lawmakers are committed to reducing emissions in an economically sustainable way, hydroelectricity needs to be recognized as a renewable resource.

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Instability of sustainability: green agenda ignores science and technology

March 31, 2013 by Amy · Comments Off
Filed under: Archive, Legislation, New Energy Economy, renewable energy 

Could this happen in Colorado? Maybe…

A Wall Street Journal article reports what some in Colorado’s energy industry know, too much reliance on wind and solar can make an electric grid unstable and lead to power outages.

California regulators and energy companies met last week out of fear that the state’s electric grid is so unstable due to heavy dependence on wind and solar that rolling blackouts will begin as early as 2015. The WSJ reports:

Regulators and energy companies met Tuesday, hoping to hash out a solution to the peculiar stresses placed on the state’s network by sharp increases in wind and solar energy. Power production from renewable sources fluctuates wildly, depending on wind speeds and weather.

California has encouraged growth in solar and wind power to help reduce greenhouse-gas emissions. At the same time, the state is running low on conventional plants, such as those fueled by natural gas, that can adjust their output to keep the electric system stable. The amount of electricity being put on the grid must precisely match the amount being consumed or voltages sag, which could result in rolling blackouts.

At Tuesday’s meeting, experts cautioned that the state could begin seeing problems with reliability as soon as 2015.

California, which has a 33 percent renewable mandate, has plenty of power but…

Even though California has a lot of plants, it doesn’t have the right mix: Many of the solar and wind sources added in recent years have actually made the system more fragile, because they provide power intermittently.

This story should serve as a warning to all, such as Rep. Max Tyler (D-Lakewood) and former Governor Bill Ritter, who think that government mandating electricity generated from wind and solar is as simple as passing legislation while ignoring science and technology.

In a March 2010 press release Tyler bragged about his bill increasing Colorado’s renewable mandate to 30 percent:

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?

What’s not to like? How about an unstable grid that leads to blackouts. Get your generators now.

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David Schnare: We’re putting global warming on trial in Colorado

March 22, 2013 by Amy · Comments Off
Filed under: Archive, Legal, New Energy Economy 

David Schnare, the Director of Environmental Law Center at the American Tradition Institute and lead attorney in a lawsuit (ATI v. Epel) against Colorado’s 30 percent renewable energy mandate said in an interview on the Amy Oliver Show on Thursday that global warming will be put on trial when he argues that the mandate violates the commerce clause of the U.S. Constitution.

Fresh off his court appearance in Denver on Tuesday, Schnare, explained that Colorado’s renewable energy mandate violates the commerce clause in two ways.

The first is what Schnare calls a “facial” violation. Colorado’s mandate provides preferences for electricity from renewable sources that originate in Colorado. It’s commonly called the multiplier. Every megawatt of electricity from a renewable source inside Colorado is counted as 1.25 megawatts. The same electricity from producers in other states enjoys no such preference. Since Colorado is part of multi-state grid, the multiplier is a significant and unfair advantage in favor of Colorado-produced electricity.

Schnare explained with this analogy, “7.5 apples in Colorado are not equal to 10 apples in another state.”

Apparently Attorney General John Suthers, whose office is charged with defending the mandate, knows that as well. Schnare said it was the AG’s office that tried to get legislation to repeal the multiplier passed at the end of the 2012 session because if the state loses then it has to pay all the attorneys’ fees and costs associated with the lawsuit.

While the bill SB12-178 died last year, Schnare believes a similar bill will pass this year, which brings us to the second violation that Schnare calls a “balancing test” question. Is the harm to interstate commerce greater than the local benefit? Schnare argues that the mandate does not provide any benefit. In fact just the opposite is true.

Under the mandate:

  • Electricity cost go up (we prove that here)
  • The environment is not improved
  • Water isn’t conserved
  • The grid is more unstable
  • Power generation is more insecure

Much of the renewable energy advocates’ argument in favor of the mandate is the necessity to minimize the negative impacts of man-made global warming. But Schnare suggests, that if global warming is real, then Colorado stands to benefit because it will get more rainfall.  So attempts to mitigate global warming will actually cause more harm than good.

Schnare will be back in district court in Denver on May 1, 2013, at which time he expects a timeline for discovery and a trial date, which is good news since this lawsuit was filed originally in April 2011.

Players in the case:

To read all documents related to the case, click here.

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Victory for Transparency: Feeding at DOE’s public trough a little less appetizing

March 22, 2013 by Amy · Comments Off
Filed under: Abound Solar, Archive, New Energy Economy 

For the last two and half years, the Independence Institute along with other free market energy policy advocates have pounded the drum of transparency and exposed the federal government’s infamous Department of Energy (DOE) loan guarantee program that rewarded the politically well-connected while costing taxpayers billions of dollars with high profile bankruptcies such as Solyndra and Colorado’s own Abound Solar.

Without the work of the Independence Institute’s investigative reporter Todd Shepherd, the Energy Policy Center, and Michael Sandoval now with the Heritage Foundation, Abound Solar’s history is little more than a footnote in failure in the grand scheme of the DOE. We covered it. The mainstream media did not…until we shamed them into doing so.

Now the Government Accountability Office (GAO) has released a report on its audit of the DOE loan guarantee program that finds negative publicity surrounding the embattled program has left billions of taxpayer dollars untouched in the public trough.

Sandoval reported on the Foundry Blog:

More than $51 billion in unused loan guarantee authority and $4.4 billion in unused credit subsidies…remain available under the DOE’s Loan Guarantee Program (1703) and Advanced Technology Vehicles Manufacturing (ATVM) loan program.

According to the report,

Some applicants noted that the Solyndra default and other problems have created a negative public image and political environment for the program, which has made its future less certain and the DOE more cautious about closing on loan guarantees.

Good news for taxpayers, the DOE has not closed a loan since September 2011, the month that Solyndra shuttered its doors. The GAO conducted the performance audit beginning in June 2012 (the date Abound Solar went bankrupt) to February 2013.

Most impressive is that taxpayers are making their voices heard and companies themselves are feeling the negative public pressure of socializing risk while privatizing profit:

“Most applicants and manufacturers noted that public problems with the Solyndra default and other DOE programs have also tarnished” other programs such as ATVM. They believed the negative publicity makes the DOE more risk-averse or makes companies wary of being associated with government support.”


We would be remiss if we didn’t mention by name the excellent work of Paul Chesser of the National Legal and Policy Center exposing the DOE’s corporate welfare program for Big Green projects such as electric vehicle manufacturers to the stars Fisker and Tesla and battery maker A123 Systems.

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A high tab: NREL’s $135 million toast

March 14, 2013 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

I didn’t make up this. The Denver Post lede paragraph in a story about the National Renewable Energy Laboratory (NREL) is almost laughable:

Hooking a toaster oven to a solar panel is not an easy thing, but the National Renewable Energy Laboratory’s new $135 million integrated energy facility will able do just that. While it may seem like a lot of money for toast, the Energy Systems Integration Facility can do a lot more.

That doesn’t just seem like a lot of money, it IS a lot of money. On this blog we’ve detailed NREL’s excessive spending. And Colorado Watchdog.org exposed NREL’s million dollar employee Executive Director Dan Arvizu.

So is $135 million a lot for toast? For most taxpayers yes but likely not for NREL.  It might be more humorous if it weren’t our money. Frankly, we haven’t seen NREL do anything that couldn’t wouldn’t be done better in the private sector — assuming it is done at all.

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Eco-left prepares to double down on renewable mandate

March 14, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

By Peter Blake

This column appeared originally on Complete Colorado Page 2.

When the runners are closing in on the finish line, move the tape farther back.

That’s the usual strategy employed by greens when it comes to establishing renewable energy standards for electricity production. It’s a marathon that never ends, and the added cost to consumers is secondary, if not irrelevant.

Colorado’s power producers are awaiting introduction of a bill that would raise the minimums yet again. But their lobbyists don’t know the details — and neither does the prospective sponsor, apparently.

There’s plenty of “radio chatter,” said Jeani Frickey, a lobbyist for Colorado’s rural electric associations, but “we don’t have anything specific yet.”

“I’ve not seen any bill drafts, or even outlines of ideas,” said Mike Beasley, an Xcel Energy lobbyist.

An aid to Rep. Su Ryden confirmed that the Aurora Democrat is going to be a sponsor of a bill, but even she hasn’t seen it. “A lot of different people” are still working on the bill.

The ever-rising renewable standards began back in 2004, when Colorado voters approved Amendment 37, an initiative that required regulated, investor-owned utilities to produce 10 percent of their electricity through renewable energy by 2015.

Three years later the legislature, assuming that one popular vote gave them carte blanche to do the work themselves from then on, raised the minimum to 20 percent by 2020. At the same time it established a 10 percent mandate on REAs, co-ops, which are not under the Public Utilities Commission.

In 2010 lawmakers raised the minimum to 30 percent for regulated utilities by 2020. The REAs were left at 10 percent. Now it’s three years later, again, and history tells us that lawmakers will be back with yet higher standards.

Some predict the figure will go to 40 percent for Xcel and Black Hills Energy, and 20 percent for the REAs. Others believe that only the REAs will be raised. But they’re only guesses, and the figures could be adjusted during the legislative process anyway.

By the way, you might think that hydroelectric power would count as a renewable, since no fuel is required and it produces, as Frickey noted, “zero greenhouse gas emissions.”

But Colorado enviros refuse to recognize water power as a renewable. Perhaps they’re afraid it would lead to the damming of various rivers. But if it did count, the REAs would already be over their required 10 percent just using existing dams. Tri-State Generation & Transmission, which supplies 18 of Colorado’s 22 REAs with electricity, gets 12 percent of its power from water, said Tri-State spokesman Lee Boughey. It’s generated by the Western Area Power Administration, an agency of the Energy Department.

REAs would be a natural target for the Democratic-controlled legislature. They cover 73 percent of Colorado’s land but less than 25 percent of the state’s population, said REA lobbyist Geoff Hier. Democrats predominate along the Front Range, where Xcel provides most of the power, and Republicans in the hinterlands.

One group working on the bill is Conservation Colorado, a recently formed amalgam of the state’s Conservation Voters and its Environmental Coalition.

Last September, before the merger was formalized, the leaders of the two groups wrote a letter to legislative candidates urging their support for “Colorado’s Path to a Clean Energy Future.” [Read entire letter below]

They seemed to be targeting the REAs. Noting that Xcel has a 30 percent mandate, “most rural and municipal energy providers have only made a 10 percent commitment that is below the national average,” says the letter. It went on to blame coal plants and autos for air pollution and urged a four-point program:

  • “Decreasing the emissions that cause climate change” by at least 2 percent a year;
  • Ensuring that “over a third” of Colorado’s electricity comes from renewable technologies;
  • Requiring all utilities to offer “energy efficiency” programs that will help customers save energy.
  • Encouraging the installation of charging stations for electric vehicles.
  • Senate Bill 126, now in the House, would help promote the last point.

It’s hard to predict how Xcel or the REAs will react when a bill is finally introduced. In 2004, Xcel fought the first mandate. But then the greens got smart and stopped treating it as an evil corporate enemy while Xcel came to realize its job was to make money, not provide cheap power. It’s entitled to 10 percent return on investment, no matter what the cost of fuel or capital equipment.

The PUC helped by no longer requiring utilities to apply the “least cost” principle when building facilities or buying fuel. What’s more, the PUC made retail fuel prices subservient to more nebulous environmental goals.

Xcel ended up backing the 2010 bill, just as the REA’s backed the move to 10 percent renewable for them.

If renewables were economically competitive in the marketplace, there would be no need for legislation. Utilities would turn to them automatically. But so far, they’re not. Wind survived only because Congress belatedly extended its special tax credits. Solar is even less competitive.

Xcel already is allowed to charge you an extra 2 percent per month to pay for its renewable facilities and fuel.

Three years ago, when Bill Ritter was still governor, a coalition of natural gas companies, Xcel and greens worked behind closed doors for months before dropping House Bill 1365 into the hopper on March 15. It required Xcel to close down three coal-fired plants or convert them to natural gas by 2017. It was then rushed through the legislative process in a couple of weeks as more than 30 lobbyists worked the halls.

A similar rush-rush process recently worked for the gun bills. Perhaps it will be tried again when the renewable energy bill is introduced.

Longtime Rocky Mountain News political columnist Peter Blake now writes Thursdays for CompleteColorado.com. Contact him at pblake0705@comcast.net

Colorado's Coalition for Clean Energy Future

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How CEI and II Toppled EPA Region 8 Administrator James Martin

March 14, 2013 by Amy · Comments Off
Filed under: Archive 

By William Yeatman

In mid-February, EPA Region 8 Administrator James Martin—who previously had served in the Ritter administration as the key facilitator of the Clean Air Clean Jobs Act—announced his resignation. The announcement came as a surprise, as Martin’s tenure at EPA was unusually brief. In fact, only one other (of 9) EPA Regional Administrators served a shorter term during the Obama administration. That was EPA Region 6 Administrator Al Armendariz, who quit after infamously comparing his enforcement strategy to a “crucifixion.”  Martin served about 1 month longer than the disgraced Armendariz.

Martin cited “personal reasons” as the cause of his departure, but the truth is that he left amidst a storm of controversy. Only two weeks before his resignation, Martin was caught lying before a federal court about the extent to which he used his private email accounts to conduct official EPA business. Fibbing to a federal court is a much more likely explanation than “personal reasons” for Martin’s abrupt departure.

The lawsuit that led to Martin’s mendacity was filed by the Competitive Enterprise Institute. And CEI’s lawsuit, in turn, was based on records from a Colorado Open Records Act obtained by the Independence Institute. The upshot is that the two organizations likely toppled an EPA Regional Administrator. In light of Martin’s history of using public office (first in the Ritter administration, then in the EPA) to wage a war on affordable energy, the Independence Institute and CEI have performed a public service. This blog post explains how we did it.

It all began in the fall of 2010. At the time, Colorado state regulators were implementing the Clean Air Clean Jobs Act (CACJA), legislation requiring that Xcel Energy switch almost 1,000 megawatts of electricity generation from coal to natural gas. On this blog, Amy and I were posting regularly on the folly of the CACJA (see here, here, here, and here). In that capacity, we attracted the attention of the Colorado Mining Association, which was also opposed to the CACJA, for obvious reasons. The Mining Association had performed a Colorado Open Records Act request for all Ritter administration correspondence pertaining to the development of the CACJA. In return, the Mining Association received a huge tranche of almost 3,000 emails, which were provided to us.

The emails demonstrate that James Martin, who was head of the Colorado Department of Public Health and Environment when the Ritter administration pushed the CACJA through the General Assembly, was a central player in the development of the fuel switching plan.

Yet the emails also expose the fact that Martin worked exclusively from non-official email accounts while serving in the Ritter administration. Whereas every other state official involved in CACJA deliberations sent emails from a government email account (ending in “@state.co.us”), Martin  used three different “@gmail.com” accounts.

At the time, I made a mental note of Martin’s unique use of private email for public business, but I didn’t think anything more of it…

…Until last summer.

A colleague of mine at the Competitive Enterprise Institute, Chris Horner, is one of the foremost transparency experts in the country. He literally wrote the book on the Freedom of Information Act (FOIA). While researching that book last summer, he came across mounting evidence that Obama administration officials are using private email accounts to conduct official business, in an effort to circumvent public scrutiny.

His concerns prompted my memory of Martin’s practice of using his gmail accounts. So we filed a FOIA request with EPA, asking for all email correspondence about policy between Martin and the professional greens at Boulder-based Environmental Defense. We limited the search to email traffic to and from Environmental Defense because Martin had spent ten years there as a litigator before joining Ritter’s team. Also, we knew from the Colorado Open Records Act emails that Martin coordinated public policy with his former colleagues. To be precise, with this FOIA request, we were trying to find out how much environmental policymaking was being rendered by unelected EPA bureaucrats colluding with unelected bureaucrats. (This is a practice known as “sue and settle” policymaking).

Here’s a timeline of what followed:

May 1, 2012: CEI files FOIA request for EPA Region 8 Administrator James Martin seeking all business emails between him and Environmental Defense. Our request noted that Martin had a history of using non-official email accounts to consuct official business.

May 7, 2012: EPA acknowledges our FOIA request, and assigns it ID number 08-FOI-00203-12

July 5, 2012: EPA responds to the request. The Agency provides 11 emails from an official “epa.gov” account. Regarding our specific request for EPA’s FOIA search to include all emails, in both official and non-official account, EPA states, “Documents sent to a personal email address that an individual is not intending to use for official purposes are not Agency records.” That’s all they said. We were confused. It seemed as if EPA was dodging the issue.

July 19, 2012: CEI files an administrative appeal of EPA’s July 5 FOIA response.

September 9, 2012: Although the Freedom of Information Act gives EPA 20 days to respond to an administrative appeal, the Agency ignores CEI’s July 19 appeal for more than 6 weeks. So we sued EPA in the District of Colubia federal district court. Here’s a copy of our complaint.

November 19, 2012: EPA files a motion to dismiss the case. The Agency’s motion relies on a signed affidavit by Martin, attesting to the fact that he had conducted a “broad” search of his personal email account, and had produced 19 records. Of the 19 records, Martin testified that “While some of these documents mention EPA of environmental issues, I did not solicit them, nor did I act on them in connection with my EPA position.” Based on this evidence, EPA moved to close the case.

January 29, 2013: Senator David Vitter and Rep. Darrell Issa launch an investigation into Martin’s use of private emails to conduct public business.

February 19, 2013: EPA Region 8 Administrator James Martin resigns.

March 7, 2013: EPA withdraws its motion to dismiss the case. The Agency tells CEI that Martin had “alerted us to additional documents that he came across. In a motion filed in court that day, EPA states,

“Based upon its review and analysis of the content of the additional documents, the EPA has concluded that there are additional documents from Mr. Martin’s personal, non-Government email account responsive to the FOIA request at issue in this litigation.”

Present day: CEI, the Department of Justice, and EPA are negotiating a full release of Martin’s newfound emails.

The timeline speaks for itself. Martin had a long history of using private emails to conduct official business. CEI learned of this history from the Independence Institute. CEI then filed a FOIA request to probe the extent to which Martin continued to employ non-official emails to perform official work. When EPA obfuscated, CEI sued. In the course of this litigation, Martin lied to CEI, EPA, the Justice Department, and a federal judge. Then he resigned. Case closed.

Good riddance. This is a positive development. Martin is not capable of being a disinterested civil servant. Rather, he is a professional environmentalist who has spent a career demonizing industry. It’s one thing to war with economic development as a lawyer at a deep-pocketed green group like Environmental Defense. It’s an entirely different ballgame when these same anti-industry zealots are allowed to take the reins of the EPA, and use state power to “bankruptentire sectors of the economy.

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Country can breathe sigh of relief. We’re still stuck with him…

March 4, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

By William Yeatman and Amy Oliver Cooke

As Coloradans we thought we might have to apologize to the rest of the country if President Barack Obama nominated former one-term Colorado Governor Bill Ritter to head the Energy Department. If the President wanted to make electricity costs skyrocket and the eco-left community happy, Ritter was his guy, but the President didn’t pick him.

Today, the Denver Post’s Allison Sherry broke the news that MIT physicist Ernest Moniz got the nod and the environmental community is none too pleased according to Mother Nature Network:

Despite his dense résumé and desire to cut emissions, however, Moniz can be a polarizing figure in scientific and environmental circles. Few experts deny the value of a scientist as DOE chief, but many fans of renewable energy worry about Moniz’s gusto for natural gas and nuclear power — not to mention his financial ties to the energy industry.

‘We’re concerned that, as energy secretary, Ernest Moniz may take a politically expedient view of harmful fracking and divert resources from solar, geothermal and other renewable energy sources vital to avoiding climate disaster,’ Bill Snape of the Center for Biological Diversity said in a recent press release. ‘We’re also concerned that Moniz would be in a position to delay research into the dangers fracking poses to our air, water and climate.’

And the Washington Post reports:

But over the past couple of weeks, many environmentalists and some prominent renewable energy experts have tried to block the nomination of Moniz because of an MIT report supporting “fracking” — as hydraulic fracturing is commonly known — and because major oil and gas companies, including BP, Shell, ENI and Saudi Aramco, provided as much as $25 million each to the MIT Energy Initiative. Other research money came from a foundation bankrolled by shale gas giant Chesapeake Energy.

‘We would stress to Mr. Moniz that an ‘all of the above’ energy policy only means ‘more of the same,’ and we urge him to leave dangerous nuclear energy and toxic fracking behind while focusing on safe, clean energy sources like wind and solar,’ Sierra Club executive director Michael Brune said in a statement Monday.

The Sierra Club doesn’t have much credibility because financially it was sleeping with the enemy, having taken $26 million from Chesapeake Energy to destroy the market for coal.  One place they enjoyed great success was in Colorado with HB 1365, the fuel switching bill and cornerstone of Ritter’s “New Energy Economy.”

Governor Ritter coined the term New Energy Economy for his signature agenda. In practice, his New Energy Economy entails three policies: (1) a Soviet-style green energy production quota; (2) subsidies for green energy producers; and (3) a mandate for fuel switching from coal to natural gas. Renewable energy is more expensive than conventional energy, and natural gas is twice as expensive as coal in Colorado, so these policies inherently inflated the cost of electricity.

Last month, the Independence Institute published the first ever line item expensing of Ritter’s energy policies, and the results were shocking. In 2012, the New Energy Economy cost Xcel Energy (the state’s largest investor-owned utility) ratepayers $484 million, or 18 percent of retail electricity sales.

This princely sum purchased the equivalent of 402 megawatts of reliable capacity generation. By comparison, Xcel had a surplus generating capacity (beyond its reserve margin) in 2012 of 700 megawatts—almost 75 percent more than the New Energy Economy contribution. Thanks to Governor Ritter’s energy policies, Xcel ratepayers in Colorado last year paid almost half a billion dollars for energy they didn’t need.

In addition to implementing expensive energy policies, Governor Ritter also has experience picking losers in the energy industry. In May 2009, Governor Ritter hand-delivered to Secretary Chu a letter in support of a $300 million loan guarantee for Colorado-based Abound Solar, a thin-filmed solar panel manufacturer. In the letter Ritter claimed Abound would “triple production capacity within 12 months, develop a second manufacturing facility within 18 months and hire an additional 1,000 employees.”

Taxpayer money couldn’t keep Abound afloat, which never reached production capacity. After its solar panels suffered repeated failures, including catching fire, Abound declared bankruptcy in early 2012 leaving taxpayers on the hook for nearly $70 million and even more at the state and local level. A former employee explained, “our solar modules worked so long as you didn’t put them in the sun.”

Abound Solar wasn’t the only pound-foolish Stimulus spending associated with Governor Ritter. During his administration, the Colorado Energy Office’s coffers swelled with almost $33 million in stimulus subsidies for weatherization efforts. According to a recent report by the Colorado Office of State Audits, the Ritter administration failed to even maintain an annual budget for the program. As a result, the audit was unable to demonstrate whether the money had been spent in a cost effective manor. All told, the auditor found that the energy agency could not properly account for almost $127 million in spending during the Ritter administration.

Ritter told the Fort Collins Coloradoan that the scathing audit accusing the agency under his watch of shoddy management practices was not the reason the President passed over him for Energy Secretary.

The former Governor is especially proud of the job creation associated with the New Energy Economy. To be sure, throwing taxpayer money at any industry would create jobs. The problem occurs when the public money spigot runs dry. In this context, an October 22, 2012 top fold, front page headline in the Denver Post is illuminating: “New energy” loses power; A series of setbacks cost over 1,000 jobs and threatens the state’s status in the industry. To put it another way, in the two years since Ritter left office, his New Energy Economy has atrophied in lockstep with the reduction in public funding.

Ritter has taken to proselytizing for the gospel of expensive energy. He founded the Center for the New Energy Economy, the purpose of which is to, “provide policy makers, governors, planners and other decision makers with a road map that will accelerate the nationwide development of a New Energy Economy.” He even brought with him the former head of the beleaguered energy office Tom Plant to work for him as a “policy advisor.”

So far Ritter’s bad energy policy has remained largely within the Centennial State, and, for now, that’s where it will stay. With the choice of Moniz, the rest of the country can breathe a sigh of relief. For Coloradans, we’re still stuck with him.

William Yeatman is the Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute and a policy analyst for the Independence Institute in Denver, Colorado. Amy Oliver Cooke is the Director of the Energy Policy Center for the Independence Institute

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