According to Xcel Energy’s regulatory filings, the utility spent $275 million in ratepayer subsidies for customer-sited solar panel systems from 2008-2012.*
That breaks down to:
Cost of these solar subsidies for each of Xcel Energy’s 1.4 million Colorado customers.
Percentage of Xcel Energy customers (approximately 9,200) that benefit from lower electricity rates by having subsidized solar panels installed on their property. Although only a fraction of 1 percent of Xcel Energy customers benefit from solar subsidies, 100% of customers pay for the cost of these subsidies.
Cost in Xcel Energy ratepayer subsidies for each of the 3,600 employees that work “throughout the value chain” of Colorado’s solar industry (job numbers are from the Solar Energy Industries Association).
Capital cost per kilowatt capacity of the solar panels subsidized by Xcel Energy ratepayers.** This compares to $2,040/kilowatt for the 750 megawatt Comanche 3 coal-fired power plant in Pueblo,*** and $1,400/kilowatt for a combined cycle natural gas plant.
*See page 1, final column of Xcel Energy, December 2012 RESA budget Report, filed 2 February 2013.
**Capacity of Xcel Energy’s distributed generation solar panel assets—44.9 megawatts—was taken from Section 2.11 of the Technical Appendix to Xcel Energy’s 2011 Electric Resource Plannb (page 341).
***The Comanche 3 cost data is derived from following assumptions: Capital cost–$1.3 billion; and capacity 637 megawatts (85% capacity factor of 750 megawatt nameplate capacity).
Despite close to seven hours of testimony on SB13-252, a bill to raise the renewable energy mandate 150 percent on rural electric co-ops, it is very clear that the bill’s prime sponsors Senate President John Morse (D-Colorado Springs) and Senator Gail Schwartz (D-Snowmass) do not understand their own bill and didn’t bother to consult those who can comprehend the complexity of this legislation. It passed out of committee on a party line vote.
The bill was heard yesterday in the Senate State, Veterans, and Military Affairs Committee. Members include:
- Senator Angela Giron, Chair, (D-Pueblo) and a bill sponsor
- Senator Matt Jones, Vice-Chair, (D-Louisville) and a bill sponsor
- Senator Ted Harvey, (R-Highlands Ranch)
- Senator Evie Hudak (D-Westminster)
- Senator Larry Crowder (R-Alamosa)
What the sponsors say it will do:
- Imposes a mandate on rural electric co-ops forcing them to get 25 percent of the electricity they supply to members from government-selected “renewable” sources, such as wind and solar by 2020.
- Removes the in-state preference for the 1.25 kilowatt-hour multiplier.
- Expands the “renewable” sources to include coal-mine methane and municipal waste.
- Increases the retail rate impact from 1 to 2 percent, which Sen. Giron calls “acceptable.”
What the bill really will do:
- Despite no projected fiscal impact to state government, it will cost co-op members anywhere from $2 billion to 4 billion, more than $8,000 per meter, including those in 10 of Colorado’s poorest counties.
- Removes the in-state multiplier because current law is unconstitutional. The state is being sued over it and doesn’t want to lose, which would force the state to pay attorney’s fees.
- Drive jobs out of the state because of high electricity costs.
- “Blow up the electric co-operative business model.”
- Likely force the state to spend taxpayer money defending this new law in court.
- Devastate rural economies.
- Drive up the cost of business for Colorado’s farmers and ranchers at the same time they are suffering through a devastating drought.
- Force co-ops to try to comply with a law that well could be a “physical impossibility.”
- So many people showed up to testify that the hearing had to moved to a larger room, and still an over-flow room was needed to accommodate the crowd
- Neither Senator Morse nor Schwartz could answer basic questions about the rate cap and indicated the committee would hear from “experts” who could answer questions.
- All three Moffat County Commissioners showed up to testify against the bill.
- Tri-State Generation, wholesale power supplier owned by co-ops, and every electric co-op that testified stated they were not consulted at all regarding the bill despite their repeated attempts to engage with sponsors once they heard legislation would be coming.
- Bi-partisan opposition
- Partisan support
- Senator Harvey was the best-prepared legislator.
Below are highlights and lowlights of SB252 testimony.
Forced to admit:
Senator Harvey asked Senator Morse if the electric cooperatives were ever consulted regarding SB 252. Morse couldn’t say, “yes,” so he answered with a long-winded “no.”
Former Public Utilities Commission (PUC) Chairman Ron Binz, who resigned under the cloud of an ethics complaint, acknowledged that Xcel Energy may well benefit by selling “renewable energy credits” (RECs) to Colorado’s rural co-ops in order for them to comply with this law.
Senator Ted Harvey asked several supporters of SB 252 if they would support the 150 percent mandate increase if they didn’t benefit directly from the bill. The answer: “No.”
Senator John Morse stated if the “market” wanted a renewable mandate we would have one. But since the market doesn’t, government must force it.
Supporter and former state representative Buffy McFadden, current Pueblo County Commissioner, said she wasn’t sure if renewable energy would “go to market” if government didn’t force it.
“Two percent rate cap” comes under fire:
Senator Harvey asked sponsors to explain the two percent rate cap. They couldn’t.
Under pressure from Senator Ted Harvey, PUC Executive Director Doug Dean struggled to explain the total cost of the Colorado’s renewable energy mandate and the two percent rate cap. Dean finally acknowledged that the two percent rate cap only applies to “incremental costs,” and followed up with “it’s pretty complicated.”
Binz perpetuates the 2 percent rate cap myth. Says in testimony, “as an officer of the state,” the PUC and Xcel do not mislead the public on the cost of renewable energy.
Four hours later, Independence Institute energy policy analyst William Yeatman directly addresses Binz’s misleading characterization of how Xcel recovers the total cost of the renewable energy mandate. Yeatman clarifies using real numbers: two percent of Xcel’s retail electric sales in 2012 was $53 million, which was captured in the Residential Electric Standard Adjustment (RESA). Another $291 million, not subject to the rate cap, was captured through the Electric Commodity Adjustment for a total of $343 million or 13 percent of retail sales.
Senator Harvey asked Yeatman to explain how the PUC allows this. Yeatman responded that the budgetary trick was likely the result of a dichotomy between PUC staff that acknowledges the public may be “laboring under the misapprehension of a two percent rate cap” and the Commissioners who allow it to occur.
Rich Wilson, CEO of Southeast Colorado Power Association, to bill sponsors: “you just blew apart the non-profit electric cooperative model.”
International Brotherhood of Electrical Workers pleads with the committee “don’t pass this bill.”
Kent Singer, Executive Director of Colorado Rural Electric Association (CREA), to bill sponsors and supporters, “even after five hours of testimony, I don’t think you have a clear picture of how this [SB252] works.”
Singer continues, had sponsors come to us, we could have explained it, but they NEVER did.
Singer: two percent rate cap is far more complicated than Ron Binz would lead you to believe.
Dan Hodges, Executive Director of Colorado Association of Municipal Utilities, responding to inquires about why Senator Morse would exclude his own utility owned by the city of Colorado Springs: the state constitution excludes municipal utilities from state regulation because they are owned by their citizens. “it’s unconstitutional” to draw municipals into this…”I don’t think it is appropriate for rural electric cooperatives to be drawn in either” because they are owned by their members.
Binz belittles non-profits cooperatives and their members: “Tri-State [Generation] doesn’t have the state’s interest in mind.” Tri-State is owned by electric cooperatives, which, in turn, are owned by members. Most of those members are rural Coloradans.
Senator Gail Schwartz said her neighbors in Aspen and Snowmass want more options for and access to renewables such as solar panels. My question: Why don’t they just pay for it?
Dave Lock, Senior manager, government relations for Tri-State, addresses Binz, “you can be damn sure Tri-State cares about Colorado.”
Lock responding to Binz’s disbelief about Tri-State’s $2-4billion analysis. “We only had five days,” which included a weekend because we were never allowed at the table.
Moffat County Commissioner Tom Mathers, “I own a bar. I’d like to mandate that everyone drink 25 percent more.”
John Kinkaid of Moffat County “we aren’t contributing to your [Denver’s] brown cloud.”
War on Rural Colorado:
All three Moffat County Commissioners John Kinkaid, Tom Mathers, and Chuck Grobe echoed the theme that SB 252 is an assault on rural ratepayers and equivalent to “war on rural Colorado.”
Norma Lou Murr, a Walsenburg senior citizen on a fixed income, waited patiently for hours to testify. When her turn finally came, she asked the committee “to look very seriously” before raising her electric rates.
The way the state legislative Democrats are handling this legislation is similar to how they handled gun control – leave those most impacted out of the conversation and then completely ignore their concerns during testimony.
Denver area eco-leftists have rural Colorado in their sights.
In a September 2012 letter to state legislative candidates, Colorado Environmental Coalition Executive Director Elise Jones (now Boulder County Commissioner) and Colorado Conservation Voters Executive Director Pete Maysmith implied that dirty air in the Denver metro area may be the result of rural Colorado’s not having a 30 percent renewable mandate:
While our largest utility has a 30% renewable energy target, most rural and municipal energy providers have only made a 10% commitment that is below the national average. Coal-ﬁred power plants and vehicles are contributing to the smog and dirty air in the Denver metro area, and Coloradans statewide continue to be exposed to harmful mercury and other particulate emissions.
Just last week, eco-left progressives in the state legislature introduced SB13-252 to require rural co-ops to comply with a 25 percent mandate by 2020, which is significantly higher than the 10 percent to which they have committed already. And today, Sunday, April 7th, I received this message from the Alliance for a Sustainable Colorado, a Denver-based leftist environmental group:
Did you know that in rural Colorado only 10% of energy is generated by clean energy sources, while other major Colorado utilities are on pace to produce 30% of their electricity from renewable sources before 2020? With abundant wind, plenty of sunshine, and an environment worth protecting, it’s time to recharge renewable energy in Colorado.
The Alliance for Sustainable Colorado is urging the Colorado Legislature to pass Senate Bill 252, which will increase Colorado’s Rural Renewable Energy Standard to 25% by 2020 by large wholesale electric providers who sell to rural electric cooperatives.
It’s important to note that electric cooperatives are very different from investor owned utilities such as Colorado’s largest investor owned utility (IOU) Xcel Energy. In particular:
- Co-ops are private, independent, non-profit electric utilities. While IOUs are for-profit
- Co-ops are owned by the customers they serve. IOUs are owned by shareholders.
- Co-ops are incorporated under the laws of the states in which they operate;
- Co-ops are established to provide at‑cost electric service. IOUs provide electricity with a guaranteed profit margin.
- Co-ops re governed by a board of directors elected from the membership which sets policies and procedures that are implemented by the co-op’s management.
- Co-ops serve an average of 7.4 consumers per mile of line and collect annual revenue of approximately $15,000 per mile of line. While IOUs average 34 customers per mile of line and collect $75,500 per mile.
This bill, if passed, will be wildly expensive for rural Colorado. Perhaps Denver’s eco-left doesn’t understand the cooperative business model, but what is worse is that this eco-left cabal seems to be ginning up outrage directed at rural Colorado.
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.
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.
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.
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 email@example.com
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 “bankrupt” entire sectors of the 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.
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
According to the most recent Form 10-K that Xcel Energy, Colorado’s largest investor owned utility (IOU), filed with the Security and Exchange Commission dated December 31, 2011, electricity generation from natural gas was more than double the price of electricity generated from coal in Colorado.
A table on page 18 of the report shows that in 2011, Xcel produced 76 percent of its electricity from coal at a cost of $1.77 per MMBtu while natural gas cost $4.98 per MMBtu while providing 24 percent of Xcel’s electricity.
As more and more of Xcel’s electricity is mandated to come from natural gas thanks to HB 1365, the fuel switching bill and the cornerstone of what former Governor Bill Ritter coined the “new energy economy,” along with additional regulations and out right bans on hydraulic fracturing, Xcel ratepayers should get used to spending more and more on their electricity bills.
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.”