Testimony on Senate Bill 61 ‘Ratepayer Protection’

March 11, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legislation 

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(l-r: Michael Sandoval, Independence Institute; bill co-sponsors Sen. Jerry Sonnenberg and Sen. John Cooke)

Testimony delivered, more or less as written, on behalf of SB 61 on March 10, 2016:

Testimony on behalf of
SB61 Ratepayer Protection

March 10, 2016

SENATE AGRICULTURE, NATURAL RESOURCES AND ENERGY COMMITTEE

GREETINGS Mr. Chairman or Madam Chairman and Members of the Committee
Sen. Sonnenberg and Sen. Cooke.

My name is MICHAEL SANDOVAL. I am an ENERGY POLICY ANALYST for the Energy Policy Center at the Independence Institute.

Thank you for allowing me the opportunity to testify today on behalf of SB61.

At the Independence Institute, we are agnostic on energy resources. It is our strong belief that the choice of energy resources should come from the demands of the free market, and not from the preferences of policymakers, lobbyists, or special interest groups.

The goal of the Energy Policy Center is to promote a free market in energy production, where no protections, subsidies, or regulations result in energy winners and losers. We advocate that government remain neutral, which then encourages a level playing field. That is the best way to ensure that consumers reap the benefits of a healthy energy market – competition, lower prices, and more options.

We find SB61 to be consistent with our principles of protecting ratepayers from unnecessary costs associated with the implementation of a likely unconstitutional rule.

In light of the US Supreme Court stay for irreparable harm that would result if the Clean Power Plan was not immediately halted, the decision by this state to proceed with a state plan promising cost neutrality is unwarranted.

The negligible and practically undetectable reduction of only 0.02 degrees Celsius in global temperatures does not justify ratepayers picking up the tab for the social engineering of electricity.

Ironically, four decades ago a previous federal decision to promote coal for electricity production locked in much of the current fleet of baseload generation that is the target of the current rule.

Additional costs—in the form of enormous and potentially catastrophic transition costs—should be shouldered by those insisting on carrying out such measures. Capital costs run through to ratepayers, and we have already seen the effect in places like Pueblo. These transitions should not be cost-shifted to those who can least afford it.

Colorado should remain focused on electricity generation that emphasizes affordability and reliability. The regressive nature of electricity cost increases affecting low income, minority, and elderly residents is well-documented. Last year, the National Black Chamber of Commerce, for example, found that poverty rates in black and Hispanic communities would rise 23 percent and 26 percent, respectively.

The Independence Institute has documented the skyrocketing increases in electricity rates for Colorado’s residential, commercial, industrial, and transportation customers. From 2001 to 2015 Colorado has seen a residential increase of more than 60 percent, 8 percent higher than the average for all Mountain states. For all sectors, Colorado has experienced a 62.5 percent increase, 15 percent higher than the Mountain states and 23 percent higher than the US average. This far outpaces the 24 percent increase in median income or 34 percent increase in inflation over the same period. Finally, Colorado residential ratepayers already pay a 22.5 percent premium above the average for all sectors in the state combined for their electricity.

For those reasons shielding Colorado’s electricity ratepayers from any adverse impacts of compliance costs caused by implementation of this rule would be consistent with the principles of the Independence Institute.

Thank you.