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.
“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 firstname.lastname@example.org. 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!
I may have underestimated the outrage over two recent Xcel Energy rate increase requests.
The first, an attempt to recover the final $16.5 million in cost for Boulder’s Smart Grid City program. Ratepayers are not thrilled about paying for a Boulder project with massive cost overruns.
Check out these comments:
Investor-owned utilities will do whatever they can to pass costs along to the ratepayer, no matter whether those costs are the result of bad decisions, cost overruns or faulty execution. And public utility commissions merely aid and abet this abuse of customers of regulated monopolies by rubber stamping this outrage.
A strong statement, perhaps? I wouldn’t rush to reject it. For one thing, it isn’t mine. It is the precise upshot of statements by dozens and dozens of ratepayers in Colorado in general and Boulder in particular over Xcel Energy’s attempt to recoup another $16.6 million on its SmartGridCity outlays, after succeeding in recovering $27.9 million earlier this year.
Email comments to the Public Utilities Commissions (thanks to Phil for providing the link) share that sentiment:
Mr. William Newell
As I recall the residents of Boulder wanted the smart grid. There was discussion about who would pay for this in 08. Now Excel wants all of the state consumers to pay for Boulders [sic] desire. Boulder Excel [sic] customers alone should pay for the cost of the smart grid. Our rates have already increased much higher than the inflation rate due to government regulations.
Gladys Rey Mendez
Subject: Cash Cow=Customer
When will utilities, both private and public, and their respective regulators, take responsibility for the cost over-runs of projects undertaken…Now the utility want to rate-base the balance of the cost of an experiment and collect from customers who have no association with the experiment. At the end of the day customer costs do not go down. Any real energy saving or efficiencies which dilute revenues and returns, the utilities are right back before regulators proposing rate increases….
Ms. Mendez is onto something. If ratepayers become conscientious energy consumers and use less electricity, then why does the utility come before the PUC looking for another rate increase?
Take Xcel Energy’s requested $142 million rate increase. Nearly 37 percent of that rate increase, $53 million, is to pay for excess capacity that Xcel no longer sells wholesale to Black Hills Energy, resulting in increased costs for both utilities that they pass along to ratepayers. The Denver Post’s Mark Jaffe explains:
In 2004, Xcel, with 1.3 million Colorado customers, told Black Hills it would not extend the contract and would use the 300 megawatts of generation for its own service area.
Black Hills, which serves 93,300 electric customers in southeastern Colorado, built two gas-fired power plants in Pueblo to fill the gap and got a $23 million rate hike — which takes effect Jan. 1 — from the PUC to recoup the costs.
But it turns out Xcel has excess generating capacity and doesn’t need the 300 megawatts at this time.
As part of its $142 million rate request, Xcel is asking for $53 million to cover the carrying costs of the excess capacity.
Jaffe also quotes Xcel’s Karen Hyde who blames the recession for “damped demand.” But I suspect that some of Xcel’s own policies also “damped demand.”
How about tiered rates? How about Xcel Energy’s own conservation program Responsible By Nature, which enjoys a massive marketing campaign, that encourages decreased electric usage and provides information about rebates for energy saving appliances (for which ratepayers also pay)?
Isn’t less energy usage exactly what everyone — the PUC, Xcel Energy, the environmentalists — wanted? Now they get it, and ratepayers are punished.
Customers, including businesses and consumer advocacy groups, are lining up in opposition to the latest rate increase. The money quote comes from Wal-Mart Stores, Inc., which also submitted comments against Xcel’s rate increase.
An affidavit from Steve Chriss, the Senior Manager of Energy Regulatory Analysis for the Bentonville, Arkansas based corporation questioned why the PUC would grant a $100 million plus rate increase without thorough public vetting process.
Chriss also addresses the gigantic electric elephant in the living room. Why is Xcel “guaranteed” a 10.5 percent rate of return:
6. PSCo claims that the interim rate relief is necessary because in 2010 that Company earned “only” a 10.23 percent return on equity during 2010, which is below their current authorized return on equity of 10.5 percent.
7. To the extent that PSCo claims that its financial circumstances are exigent the Commission should consider that according to the Edison Electric Institute, the average return on equity awarded in 2010 by utility regulatory commission was 10.29 and for the first three quarters of 2011, the average return on equity awarded was 10.24….
8. Additionally, the Commission should consider that ratemaking principles do not guarantee the Company’s approved rate of return. Instead, rates are set in such a way that the Company has the opportunity, but not a guarantee, to earn their approved rate of return.
Current recovery shall be allowed on construction work in progress at the utility’s weighted average cost of capital, including its most recently authorized rate of return on equity, for expenditures on projects associated with the plan during the construction, startup, and preservice implementation phases of the projects.
As William Yeatman and I pointed out in our paper exposing the collusion between Xcel, the PUC, and former Governor Bill Ritter’s office, the current rate of return is 10.5 percent. Anything to do with implementing it (and that’s pretty much everything) is subject to the same rate of return.
The PUC may give lip service to caring about ratepayers, but the commissioners, Gov. Ritter, and a majority of state legislators, made a deal with the devil. As we wrote in October 2010:
As mentioned earlier, the Ritter administration led negotiations for the fuel- switching bill, but the PUC was also a willing participant in brokering a deal to assure Xcel’s cooperation. Peter Blake, writer for the popular Colorado politics blog Face the State, exposed the collusion:
Binz was trading flurries of e-mails on the pending bill with Ritter aide Kelly Nordini, natural gas lawyer Russell Rowe, and Xcel executives Karen Hyde, Roy Palmer and Paula Connelly. Xcel, seeking immediate and complete cost recovery for their capital costs, wanted to be sure the PUC would support that.
Even more damaging revelations come from Binz’s emails from earlier this year:
- March 8: “We will agree to using the extraordinary cost recovery in proportion to pressure that the approved plan puts on the company’s financial health.”
- March 9: “The Commission and Xcel have agreed on language for cost recovery.”
- March 11: “I was working with Karen Hyde up until 9:00 last evening to hammer out the final language in a couple of areas.”
Blake noted the bill “was introduced four days later and rushed through the legislature in a couple of weeks.” Denver Post columnist Vincent Carroll makes the same case for collusion: “As early as last December ,” two PUC Commissioners Baker and Binz, “had talked with natural gas interests about possible legislation and have been touting it since.”
Xcel likely will get what it wants on the Smart Grid project because it already settled with the PUC on cost back in 2009. As for the rate increase, the PUC and the state legislators who have enabled Xcel walk a fine line. Xcel likely will get most of what it wants because it has lobbyists and ratepayers don’t.
While I’m grateful that there is some outrage over these latest rate increases, I can’t help but wonder why now when HB 1365 will cost ratepayers more than a $1 billion, the State Implementation Plan another $100 million, and this year renewable energy mandates add another $100 million plus.
The New Energy Economy is a very expensive economy. It’s about time ratepayers realized it.
Utopian Utility Effect (UUE): a romanticized perception that a group, such as a municipality, can provide reliable, reasonably priced, global warming-friendly electricity more efficiently than its current power provider.
Specifically for supporters of 2B and 2C, Boulder’s ballot measures to form its own utility, UUE seems to mean, “a local energy utility can reduce our carbon emissions by 60%, increase the percentage of renewables by 40%, all while keeping our rates at parity or lower than those charged by Xcel [Energy].” Question 2B raises and extends the current utility occupation tax to raise up to $12 million over the next 6 years to fund the legal, financial and technical process of forming a municipal utility. Question 2C authorizes Boulder to create a utility that increases reliance on renewable energy, reduces greenhouse gas emissions and issues revenue bonds to pay for it.
This policy blog cannot be accused of being a tool for Xcel, Colorado’s largest investor owned utility. (For proof see recent post on consumer dissatisfaction with Xcel) We love the David vs. Goliath paradigm with consumers throwing off the yoke of Xcel, forming a utility in their own image and paying for it themselves. In fact, I have had the same fantasy about my hometown, which is currently negotiating a new franchise agreement with Xcel. In this case though, it’s a bad idea. Boulder’s green dream will prove a nightmare that is more emotional than economical.
In an hour long interview with Amy Oliver of News Talk 1310 KFKA (part I, part II) UtiliPoint’s Bob Bellemare, an engineer and seasoned energy industry analyst/consultant, provided several examples of how Boulder currently suffers from what he describes as the “utopian utility effect:”
- Utopian budgeting: Boulder is likely underestimating the cost by hundreds of millions of dollars because it didn’t budget for Xcel and its ratepayers’ stranded costs, lost future revenue, and repayment of solar/renewable energy rebates.
- Xcel’s offer: Boulder could have been up to 70 percent renewable energy powered by 2013 at a cost of roughly $4 per month per customer if they stayed with Xcel.
- Renewable/natural gas panacea: Boulder’s combination of renewables and natural gas is not likely to reduce carbon emissions.
- Opportunity costs: if Boulder invested the 2B $12 million of taxpayer funds into energy efficiency efforts instead, residents could enjoy a $48 million return on energy savings.
Xcel hired Bellemare to examine the Boulder municipalization issue, something he immediately discloses. But Bellemare also points out that from a financial perspective, he stands to make more money if Boulder is successful in breaking away from Xcel because his contract likely will continue through the lengthy legal process, which could drag on for years. A no vote, and he is done with this case.
Bellemare suggests that if Boulder is serious about being green and reducing its carbon footprint, it simply must reduce the amount of energy it consumes. A 2010 Wall Street Journal article revealed how hard that is even for eco-conscience Boulder:
In 2006, Boulder voters approved the nation’s first “carbon tax,” now $21 a year per household, to fund energy-conservation programs. The city took out print ads, bought radio time, sent email alerts and promoted the campaign in city newsletters.
But Boulder’s carbon emissions edged down less than 1% from 2006 through 2008, the most recent data available.
By the end of 2008, emissions here were 27% higher than 1990 levels. That’s a worse showing than the U.S. as a whole, where emissions rose 15% during that period, according to the Department of Energy.
Why is it so hard? Because even those who claim to be good environmental stewards love their gadgets and the electricity needed to power them:
“If a place like Boulder that regards itself as being in the environmental forefront has such a tough time, these types of efforts are not going to work as a core policy” for the nation, says Roger Pielke Jr., who studies the political response to climate change at the University of Colorado, Boulder.
One problem: People don’t want to give up gadgets. Recently, Prof. Pielke taught a seminar on energy demand. The university had installed motion-detector lights that shut off when the room is vacant to save energy. But when he asked his 17 students to lay all their iPods, cellphones and laptops on their desks, they had 42 electronic devices among them. Powering those up, he said, negated any conservation value from the fancy lights.
A problem for ratepayers is that with Boulder gone, the rest of Colorado’s Xcel customers have to pay for the state’s New Energy Economy, which has been heavily influenced by Boulder’s green dreams and applies primarily to investor owned utilities.
If Boulder wants to indulge its utopian utility fantasies, fine. But the rest of Xcel’s customers shouldn’t have to pay for it either directly through rate increases or indirectly through opportunity costs as Xcel must expend financial resources for this process rather than investment.
For more information on opponents of 2B and 2C, visit Boulder Smart Energy Coalition.
For more information on supporters of 2B and 2C, visit Renewables Yes.
On Tuesday November 30, former Colorado Senator Tim Wirth wrote an op-ed for the Denver Post on Colorado’s “Clean Energy Economy.” The article, titled, “Leading the way to a sustainable energy future,” is mostly wrong.
To wit, he suggested that the 2010 Clean Air Clean Jobs Act (CACJA), legislation that effectively requires fuel switching from coal to natural gas, is a welcome alternative to “waiting for the EPA to mandate a plan to deal with air pollutants.” This is the same Big Brother bogeyman that the Ritter Administration used to push the bill through the General Assembly.
In fact, there is no federal crackdown. The CACJA furthers compliance with provisions of the Clean Air Act that afford Colorado great discretion in choosing pollution control strategies. As such, it was the Ritter administration’s choice to require ultra expensive coal fired controls. For political purposes, the Ritter administration pinned the blame for its onerous regulations on the federal government. This phantom federal threat, in turn, was the justification for fuel switching.