April 7 Colorado Energy Cheat Sheet: Hickenlooper calls CDPHE refocusing away from CPP a ’shell game’, unloads on EPA ozone rule; ‘carbon tax’ defeated in Carbondale
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, New Energy Economy, renewable energy
Less than two weeks after Gov. John Hickenlooper told Colorado Public Radio “we don’t care what the Supreme Court says about the Clean Power Plan”, calling for continued planning for the Environmental Protection Agency’s embattled rule currently under a stay issued by the U.S. Supreme Court, the Democrat initially appeared to be walking back his initial disregard for the country’s highest judicial body:
Gov. John Hickenlooper said he’s willing to temporarily halt state work on the Obama administration’s Clean Power Plan if that would defuse an effort to strip funding from the agency developing the plan.
“I’m happy to have them stop working on it if that’s a problem, if that becomes a partisan issue,” Hickenlooper told a CPR reporter after a lunch hosted by the American Petroleum Institute.
But the easing on Hickenlooper’s view of the work being done by the Colorado Department of Public Health and Environment–dismissive of any SCOTUS intervention via a stay–was itself walked back, as he at first acknowledged that the state could work on its already existing regulatory mandates to achieve similar goals to the Clean Power Plan, but said that any such maneuver would be nothing more than a “shell game”:
“We’re doing the same work anyway,” said Hickenlooper. “I don’t think it would hurt our efforts if we were to reallocate some of that time in other directions. I mean, in the end, we’re going to get to the same place.”
Hickenlooper said state policy and laws, including the Clean Air, Clean Jobs Act passed in 2010, already require Colorado to reduce carbon emissions from coal fired power plants.
“Our goals were very aggressive goals, and they are not the same, but they are very similar to what the Clean Power Plan wants,” he said at the gathering.
The governor clarified his comments Wednesday, dismissing the idea that suspending work on the Clean Power Plan would have much real world impact on the state’s clean air efforts.
“I look at the whole thing as ridiculous, to be perfectly blunt,” Hickenlooper told reporters at a regular press gathering. “It’s like a shell game of who’s doing which work. We’re working toward clean air, that’s what the state’s doing, that’s what people want us to do. We can get into … semantical battles over this thing, but it’s pretty straightforward.”
When it comes to Hickenlooper’s pronouncements on any number of issues, including this one, it’s usually never “pretty straightforward.”
Hickenlooper, just days ago, attempted to cast a non-partisan tenor to the debate over the Clean Power Plan:
Gov. John Hickenlooper also defended the new air quality rules at an event hosted by the Colorado Petroleum Institute.
“Clean air is too important to Colorado to become a partisan issue,” he said. “I am convinced as much as I ever have been that this is in the self-interest of the state.”
Jack Gerard, the head of the American Petroleum Institute, disagreed with Hickenlooper’s assessment.
“We look at the Clean Power Plan as it’s unnecessary to regulate as trying to pick favorite energy forums,” Gerard said.
Hickenlooper’s soft spot for the Clean Power Plan did not hold him back from being critical of the EPA’s ozone rule, which he said risked the “possibility that there will be penalties eventually that will come from lack of compliance.” He also blasted a Democrat bill that would allow for more lawsuits over damage caused by earthquakes that allege a connection to oil and gas development, as well as a ballot measure that would create a 2500 foot setback, saying that it would deprive mineral rights owners of their property–a taking that could cost billions.
Energy in Depth has more on Hickenlooper’s statement on the ballot initiative that would create 2500 foot setbacks:
Colorado’s Democratic governor, John Hickenlooper, is speaking out against an initiative backed by ‘ban-fracking’ activists to dramatically increase oil and gas setback distances in the state. The comments came at an event yesterday sponsored by the American Petroleum Institute (API) and Colorado Petroleum Council (CPC) featuring the governor and API President and CEO Jack Gerard.
When asked about the ballot initiative pushed by activists with strong ties to national ban fracking organizations, that would increase oil and gas setback distances to 2500 feet, Hickenlooper strongly denounced the effort. As reported by CBS Denver:
“That would be considered a taking, and I think the state would probably be judged responsible, and I think the cost could be in the many billions of dollars. I think that’s a risk that most Coloradans — if it was laid out for them in a sense they could clearly understand — would not support it.”
Hickenlooper’s assertion that the initiative could cost the state billions is backed up by a recent economic assessment from the Business Research Division at University of Colorado Leeds School of Business. Economists found that a 2,000 foot setback distance could cost the state up to $11 billion in lost GDP a year and 62,000 jobs. The 2,000 foot setback economists looked at is more modest than the 2,500 foot distance that activists are attempting to put before state voters this year.
Those mineral rights are worth billions of dollars to Coloradans and fill the coffers of counties and other entities annually to the tune of millions in property and severance taxes.
A thinly disguised attempt to ban fracking under the ruse of “local control” failed in the Colorado House on Monday:
Activist groups have not been shy about the fact that they see “local control” as a de facto ban on fracking. On a recent call with supporters, Tricia Olson of Coloradans Resisting Extreme Energy Development (CREED), the group behind a series of ballot initiatives targeting energy development, even told the group that their “local control” measure is basically a “full-fledged” fracking ban:
“This version however has one significant difference, what we would call a floor, not a ceiling language. To lift its points, it authorizes local governments to pass regulations — prohibit, limit or impose moratoriums on oil and gas development. Of course the word prohibit means ban. This allows for a broad range of local government options within their jurisdictions from local actions to a full-fledged ban.” (23:14-23:44)
EID detailed the “local control” proponents’ misinformation campaign to push the measure. Two Democrats joined with Republicans to kill the bill on the floor of the Colorado House.
And former Gov. Bill Ritter–you know–of the “New Energy Economy” and a paragon of all things green (dubbed the “Greenest Governor”), rejected a national ban on fracking:
“If you passed a national ban, this industry would go away and it would be harder for us to get to our place of transition on clean energy and climate.”
“I believe that with a good set of regulations, with good enforcement, with good compliance on the part of the industry, it [fracking for natural gas] can be a part of a clean energy future,” Ritter said.
Ritter and Hickenlooper, both Democrats, face opposition from their far-left counterparts when it comes to these types of calls for bans on responsible oil and gas development:
“We won’t transform the energy supplies of our nation overnight; there’s been rapid growth in solar and wind, but we’re a long way from saying we can walk away from hydrocarbons and not do significant damage to our economy,” Hickenlooper said.
“The number of people in Colorado who want to ban hydrocarbons is probably a small minority,” he said.
Gerard said the oil and gas sector will continue to play a significant role going forward, even through energy efficiency efforts focused on the automotive sector.
“When you look to make cars more energy efficient, you make them lighter with plastics brought to you by petroleum, you make the windows more efficient [with films] brought to you by petroleum, the gadgets you play with in your hand every day also come from petroleum,” he said.
As we can see, it’s not just about fracking, or burning oil and gas for electricity, as API’s president pointed out.
Hickenlooper continues to express deep concern about the EPA’s ozone rule, reducing the target for acceptable ground level ozone from 75 ppb to 70 ppb, saying a suspension of the rule “would be a great idea”:
Transcript of Gov. John Hickenlooper’s comments on the Environmental Protection Agency’s ozone rule delivered to the Colorado Petroleum Council and the American Petroleum Institute on March 31, 2016 via the Center for Regulatory Solutions:
So I think it would be a great idea if they suspended the standard. I mean, just with the background [ozone], if you’re not going to be able to conform to a standard like this, you are leaving the risk or the possibility that there will be penalties of one sort or another that come from your lack of compliance. Obviously, no different than any business, states want to have as much predictability as possible, and I think if they suspend the standards, it’s not going to slow us down from continuing to try and make our air cleaner. …
You know, we’re a mile high. Air quality issues affect us more directly than they do at lower elevations. So we’re going to keep pushing it, we’re not going to back off, we’re going to continue to improve the air quality in the state every year if I have anything to say about it, but at the same time, those standards, you know, to be punitive when you’re working as hard as you can … to get cleaner air as rapidly as you can, it seems like it’s not the most constructive stance.
A bi-partisan chorus of opposition to the ozone rule has emerged, and Independence Institute energy policy analyst Simon Lomax notes that the rhetoric surrounding the ozone rule, and in particular, its potential impact on public health, is filled with fearmongering from the “bad-air chorus.”
Lomax testified before CDPHE last month on the ozone rule:
The nature of the problem is clear. The EPA’s new ozone standard goes too far. It will throw large areas of the state into long-term violation of federal law. Violation will impose new restrictions on economic growth and jeopardize badly needed investments in transportation infrastructure.
And because the stringent new standard approaches background ozone levels, which state regulators are powerless to control, there will be little, if any, environmental benefit in return. For months, stakeholders from across government, across the political spectrum and across the economy have stated and restated the problem. But admiring the complexity of the problem won’t solve it.
Notably, the ozone rule would attack the “bridge” fuel, namely natural gas, that the earlier versions of the Clean Power Plan envisaged would get the nation from a fossil fuel fleet to one primarily composed of renewables. Between the attempts to ban fracking, the leap made by the final Clean Power Plan that pushes almost exclusively for renewables, and the ozone rule’s affect on oil and gas development (emissions are a key component to create ground level ozone), the stage has been set for an onslaught of anti-oil and gas regulation that would devastate Colorado’s economy.
Colorado faces geographical and topographical challenges with any ground-level ozone measurements due to elevated background ozone levels, as Hickenlooper pointed out. Anthropogenic emissions in other states and Mexico and as far away as Asia (China), wildfires, atmospheric intrusions, and our elevation combine to bring levels of background ozone to the state that can’t simply be regulated away.
From the “excellent news” category–carbon tax gets shot down in Carbondale, 61 to 39 percent:
For the so called “carbon tax,” 1,022 voters cast ballots against, while only 637 Carbondale residents voted in favor.
And with more than $3,000 in contributions, the committee supporting the carbon tax raised and spent more money than any single candidate for the board of trustees.
The climate action tax proposed to increase residents’ gas and electric bills in an attempt to promote clean energy projects and reduce energy usage in keeping with the town’s 2020 energy goals.
The climate tax would have been applied uniformly across town, with one set of rates for residents and another for business owners.
Supporters of the carbon tax had estimated that the average household’s utility bills would go up $5 to $7, and the average business would see a $10 to $30 increase.
This carbon/climate action tax would have just added more misery to Colorado’s already skyrocketing electricity rates.
February 23 Colorado Energy Cheat Sheet: Conflicting views over Colorado CPP prep; Gold King Mine persists for Navajo Nation
Filed under: CDPHE, Environmental Protection Agency, Legal, renewable energy, solar energy, wind energy
An E&E story ‘Colo. steps back from crafting formal plan for EPA rule’ might give readers pause, thinking that the Colorado Department of Public Health and Environment was backing off its previous statement to proceed with “prudent” Clean Power Plan development even as a stay from the U.S. Supreme Court was in effect (paywall):
Colorado officials said yesterday they believe it is “prudent” for the state to keep working toward power plant carbon emissions reductions despite a recent Supreme Court ruling to freeze a key federal climate change regulation.
But the state’s original path toward meeting U.S. EPA’s Clean Power Plan goals will be recharted, officials declared at Colorado’s first public meeting about the regulation since the court stay.
“We don’t think it is appropriate at this point to continue drafting a full state plan,” said Chris Colclasure of the Colorado Department of Public Health and Environment’s Air Pollution Control Division. “There’s just too much uncertainty for that.”
Colclasure said the decision to stop work on developing a full compliance plan is part of an effort in smart time management.
“We want to take any steps that we can to put Colorado in the best position given the uncertainty so that when the Supreme Court gives us a ruling, we have used that time effectively,” he said.
The state is “trying to identify actions that we can take that will have benefits regardless of the outcome of the litigation,” Colclasure said, adding that “we don’t want to waste time, either, by having people work on activities that wind up being irrelevant.”
This would include whether to cancel, reschedule, or rework meetings already on the CDPHE agenda for this spring.
A generous reading would see CDPHE’s declarations as a revision or walk-back of its post stay bravado to carry on with CPP preparation at the state level. But there might be no walk-back, but some verbal gymnastics designed to throw off possible legislative action this session or to see other reasons (not just “we should do something anyway because it’s a good thing”) like the state’s own impending 2020 renewable energy standards or Governor John Hickenlooper’s 2015 Colorado Climate Plan.
Meanwhile, at least 17 other states’ governors have signed a bipartisan pledge to promote a “new energy future” as CPP litigation continues.
An amicus brief filed by 34 Senators and 171 Representatives supporting the CPP lawsuit:
WASHINGTON – Led by U.S. Senate Majority Leader Mitch McConnell (R-Ky.), Senate Environment and Public Works Committee Chairman Jim Inhofe (R-Okla.), House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.), 34 Senators and 171 House Members filed an amicus brief today in the case of State of West Virginia, et al. v. Environmental Protection Agency, et al.
The amicus brief is in support of petitions filed by 27 states seeking to overturn the EPA final rule identified as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, EPA-HQ-OAR-2013-0602, 80 Fed. Reg. 64,662 (Oct. 23, 2015), also known as the “Clean Power Plan.” A copy of the brief can be found here.
As Senators and Representatives duly elected to serve in the Congress of the United States in which “all legislative Powers” granted by the Constitution are vested, the members state that:
The Final Rule goes well beyond the clear statutory directive by, among other things, requiring States to submit, for approval, state or regional energy plans to meet EPA’s predetermined CO2 mandates for their electricity sector. In reality, if Congress desired to give EPA sweeping authority to transform the nation’s electricity sector, Congress would have provided for that unprecedented power in detailed legislation. Indeed, when an agency seeks to make “decisions of vast ‘economic and political significance’” under a “long-extant statute,” it must point to a “clear” statement from Congress. Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2444 (2014) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160, 529 U. S. Ct. 1291, 1315 (2000)). EPA can point to no statement of congressional authorization for the Final Rule’s central features, precisely because there is none.
Gov. Hickenlooper defended his views about the CPP on CPR: ignoring SCOTUS stay to do a Colorado approach–more wind, more solar–”I think we do have a responsibility to go to those communities and see what we can do to try and find new businesses or be able to retrain some of the miners so that that community doesn’t suffer so much economically.”
“We really can have inexpensive electrical generation and clean air at the same time,” said Hickenlooper.
That “responsibility” Hickenlooper outlined will be tested, as coal communities see economic upheaval already:
The downward slide continued for Colorado’s coal industry in 2015, highlighted by production at Routt County’s Twentymile Mine, which was down 38 percent.
Statewide, production in Colorado was down 18.5 percent, with 18.7 million tons, the lowest amount of coal mined in 23 years.
In Moffat County, production at the Trapper Mine was actually up nine percent, with 2.1 million tons. At Colowyo Mine, production was down six percent at 2.3 million tons.
Colorado Mining Association President Stuart Sanderson said the drop in production is a result of lower demand, but it was not caused by natural market forces.
“What we are seeing is the direct result of government regulations that are designed to drive coal out of the energy mix,” Sanderson said.
Sanderson pointed to the 2010 Clean Air Clean Jobs fuel-switching bill from coal to natural gas.
“Moving forward, there is no question that the companies are suffering from this absurd action by the government to put hardworking men and women out of work,” Sanderson said.
In other words, mining communities aren’t just suffering economically, they’re suffering governmentally.
At the “Lifting the Oil Export Ban” event, Democratic Rep. Ed Perlmutter indicated support for a 5-10 cent gas tax hike as an “investment”–as he “comes from a construction family” (51:00 mark):
The Gold King Mine spill prompted by the Environmental Protection Agency still has lingering effects in Navajo Nation areas south of Colorado:
Millions of gallons of contamination from heavy metals flowed from the Animas River in Colorado into the San Juan River in New Mexico, threatening their economy and their spiritual way of life.
Joe Ben Jr. is a farmer and representative to the Navajo Nation board. He walked with CBS4 Investigator Rick Sallinger through corn stalks in a field.
“This corn should normally be higher than 6 feet, it’s about 4 feet,” Ben said.
With sadness he told of how they shut off the irrigation water when they heard the toxic plume was coming and still haven’t turned it back on. Some 550 indigenous Navajo farmers in the region have felt the impact. Ben says farming is an art in their culture for those who live off the land.
Among them is Earl Yazzie and his family. He can only bundle up what remains of what might have been a bountiful harvest. The mine spill took a toll on his farm. He estimates the loss at $10,000.
The U.S. Chamber of Commerce asked–“What if a business did this?”:
If this were a private business, EPA would never have accepted this answer. It would have decried such behavior as “cutting corners” and rushing ahead with little regard to safety and the environment. Fines would’ve been issued.
Just like when EPA fined an oil exploration company $30,500 only a few days before the Gold King Mine spill for leaking 500 gallons of well testing fluids on Alaska’s North Slope. EPA allowed 6,000 times that amount of material to pour into a river. Will EPA (i.e. taxpayers) fork over $183 million in fines?
Last year, Administrator Gina McCarthy said EPA will be held accountable for the spill:
“We are going to be fully accountable for this in a transparent way,” she said at a press conference. “The EPA takes full responsibility for this incident. No agency could be more upset.”
When asked if the EPA will investigate itself as vigorously as it would a private company, McCarthy said, “We will hold ourselves to a higher standard than anybody else.”
On the transparency front, EPA is lacking. As noted above, Griswold’s email about water pressure concerns wasn’t included in EPA’s December 2015 report. Also, committee members are subpoenaing the Interior Department and the Army Corps of Engineers for more documents about the spill, because they don’t think the agencies have been forthcoming.
As for holding itself to a higher standard, that’s yet to be seen six months after the spill.
A House committee is seeking Interior Department documents in the Gold King Mine incident and the subsequent post-spill investigation:
Sally Jewell was ordered Wednesday by the U.S. House Committee on Natural Resources to produce a long list of records and correspondences by the end of next week.
Specifically, the committee wants information about how investigators under Jewell worked with the Army Corps of Engineers to peer review the report.
The committee’s chair, Rep. Rob Bishop, R-Utah, said the Department of Interior has interfered with his requests for information on how the Gold King Mine report was compiled.
Bishop says the DOI has tried to block records showing the Army Corps of Engineers had “serious reservations about the scope and veracity” of the interior department’s review.
Army Corps records were also subpoenaed Wednesday.
Meanwhile, CDPHE sees the Gold King Mine spill as the impetus for action on other mines around the state:
SILVERTON —Of the 230 inactive mines the state recognized six months ago as causing the worst damage to Colorado waterways, state officials say 148 have not been fully evaluated.
The Colorado Department of Public Health and Environment has cobbled together $300,000 for an “inventory initiative” to round up records and set priorities. The agency is enlisting help from the Colorado Geological Survey at the Colorado School of Mines.
Colorado officials hope attention on the Animas River after the EPA-triggered spill at the Gold King Mine in August will spur action at scores of other inactive mines contaminating waterways. After the disaster, the state identified the worst 230 leaking mines draining into creeks and rivers.
There are an estimated 23,000 inactive mines in Colorado and 500,000 around the West. State officials estimate mining wastewater causes 89 percent of the harm to thousands of miles of waterways statewide.
By Amy Oliver Cooke and Robert Applegate
As Ron Binz campaigns to be confirmed as the head of the Federal Energy Regulatory Commission, much of the emphasis has been on his position as an activist for what he considers to be low or no carbon energy sources, predominantly Big Wind. (Forget the fact that wind requires an enormous amount of carbon emissions in the manufacturing of gigantic wind turbine.)
But Binz’s no carbon advocacy is hypocritical.
While Binz now advocates for lowering carbon emissions, he was instrumental in shutting down Colorado’s lowest carbon emitting power source, the Fort St. Vrain nuclear plant, which eventually converted to natural gas – a technology he now calls “dead end” when it comes to carbon emissions.
As head of the Office of Consumer Council (OCC), Binz successfully argued before the Public Utilities Commission (PUC) that the power plant did not work correctly and that the shareholders of the company running the plant must pay for the capital costs rather than customers using the electricity. (This is when Binz cared about ratepayers)
More stringent regulations and the burden of the extra cost upon the shareholders ultimately forced the plant to close as a carbon free, nuclear power source. This “regulating to death,” as stated by previously employees of the plant ultimately came at the cost detriment of electricity customers who paid for the decommissioning and subsequent recommissioning as a carbon emitting natural gas plant.
His position on natural gas has flipped too. In 2010, as chair of the PUC Binz took a lead role in negotiating the terms of the controversial fuel switching bill HB 1365 titled “Clean Air; Clean Jobs Act.” At that time, Binz championed a mandated fuel switch from coal to natural gas. Apparently Binz thought natural gas was a clean fuel in 2010 but isn’t now. Too bad ratepayers didn’t know that in 2010. It would have saved them more than $1 billion dollars, but then Binz’s concerns for consumer costs have flipped too.
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.
For all the ink that Colorado’s public officials have spilled on the subject of the New Energy Economy, there’s been little discussion of its cost.
Ex-Governor Bill Ritter, for example, recently took to the pages of the New York Times to brag about his energy legacy. While he made an unsubstantiated claim about creating “thousands of new jobs,” he ignored the inconvenient truth that Xcel’s rates increased precipitously during his tenure, despite the fact that electricity demand was down due to an economic recession.
To be sure, it’s difficult to isolate an annual cost figure for the New Energy Economy. For starters, there’s a lot of policies to investigate; as ex-Governor Ritter noted in his New York Times op-ed, he enacted a suite of expensive energy policies (57 laws, to be exact). Moreover, utility accounting is arcane and largely opaque. So discerning the sum cost of these disparate measures is not easy, which is why no one has yet calculated the annual cost of the New Energy Economy…until now.
Filed under: Archive, CDPHE, HB 1365, New Energy Economy
The Politics Colorado Blog today reports great news:
“Tuesday, Senate Republicans sent a letter to Senate President Shaffer asking Legislative Council to hold a public hearing to review the changes made to the State Implementation Plan (SIP) for implementing regulations for “regional haze”…
…”We think it’s important that Legislative Council hold a public hearing on this effort to give the General Assembly and public more time to consider the impact this plan will have on Colorado,” said Senator Scott Renfroe, R-Greeley.
“Serious questions and concerns have risen about the timing of the information and the data used in the plan,” concluded Renfroe.
As readers of this blog know well, I’ve long railed against the CDPHE’s manipulations of the regional haze rule. In short, the Department has used this regulation to push an anti-coal agenda.
Here’s a roundup of who argued what, along with links to the appeals:
- Xcel alleges that the PUC’s decision “fails to put into place one of the cornerstones” of HB 1365. This “cornerstone,” according to Xcel, entails faster rate recovery. The PUC decided that Xcel must wait until each rate case procedure (every 1 to 2 years) for cost recovery of construction work in progress; Xcel claims it is entitled to monthly payment. Legally, Xcel appears to be in the right: Part of HB 1365 awfulness is that it incents Xcel with extraordinary rate treatment. If the PUC holds firm, Xcel can appeal to a state court, or it could walk away from the Clean Air Clean Jobs Act (I’ve discussed that delightful possibility here).
- Gas Producers objected to the handling of highly confident information, like the long-term gas contract signed between Xcel and Anadarko (this contract is the putative hedge against Colorado’s increased reliance on the mercurial gas market). In particular, Gas Producers sought an amendment to the decision making it clear that the treatment of highly confidential information in the HB 1365 docket would not become precedential for future dockets.
- Independent Power Producers (“IPPs,” they are power generators that compete with Xcel on the wholesale electricity market) asked the PUC to amend its decision to establish rules that would skew the wholesale electricity market in the IPPs favor, at the expense of Xcel. As HB 1365 skewed the market to Xcel, the IPPs apparently are asking for a quid pro quo.
- HB 1365 is a bill written by special interests in order to exploit Colorado consumers, yet the feckless Office of the Consumer Counsel had only one complaint with the PUC’s decision (and, moreover, was a non-entity during the hearings). The OCC objected to the PUC’s decision to investigate the use of ratepayer funds to pay for the re-education of Colorado coal miners who lost their jobs because the Governor Bill Ritter picked winners in the energy industry.
- The most adversely affected parties (Peabody Energy, Coal Miners Association, and the Associated Governments of Northwest Colorado) filed similar appeals. All of them argued that the PUC violated their due process, and they are all correct, IMHO. The PUC seemed to be making up the rules as it went along. Over the weekend, I’m going to write a post about the PUC’s due process problems, but in the meantime, the breadth of the legal challenges described above is the most telling evidence that the PUC was unhinged from any legal moorings.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.
“I have a moderate proposal” was how PUC Chairman Ron Binz introduced his interpretation of cost recovery provisions in HB 1365, the Clean Air Clean Jobs Act, legislation that effectively mandates fuel switching from coal to natural gas for almost 1,000 megawatts of base-load electricity generation along the Front Range. It was a very important exegesis. One of the major reasons Xcel agreed to go along with fuel switching was the possibility of ultra-generous rate treatment accorded by the legislation. Yet the language of the law was ambiguous on certain key points, and the PUC was the final arbiter of what these words meant. Millions of dollars hung in the balance.
Chairman Binz pitched his proposal on December 9, during the PUC’s final deliberations on HB 1365, and he was true to his word when he labeled it “moderate.” The PUC Chairman denied many of Xcel’s demands—most significantly, the utility’s insistence on upfront payment, without having to submit to a cumbersome and time-consuming rate case procedure.
Although I disagree with PUC regulation of the electricity industry to begin with (for my take on this matter, click here or here), I don’t think Chairman Binz’s proposed cost recovery regime (which ultimately was adopted by the PUC) is unreasonable. I do, however, disagree with Chairman Binz’s statement that he did “not think highlighting this [HB 1365 costs] on a bill will serve us well.”
Perhaps Chairman Binz was worried about his legacy and was therefore loathe to allow a monthly reminder to more than a million Coloradans of the costs of legislation he helped write. Governor Bill Ritter, too, would be poorly served by a constant reminder that his “New Energy Economy” came with big strings attached.
- Regarding HB 1365 (a.k.a. the Clean Air Clean Jobs Act), the big news is that Xcel has yet to make up its mind. As I noted here, the Minneapolis-based utility has the authority under HB 1365 to veto the fuel switching implementation plan chosen by the PUC on December 10. So far, Xcel has kept mum on its intentions, save for a request to clarify the PUC’s written decision. In particular, the utility asked the PUC what sort of flexibility it has in scheduling the retirement of the 152 megawatt Cherokee 3 coal fired power plant in Adams County north of Denver. If Xcel were to veto the PUC’s preferred plan, then HB 1365 and its attendant proceedings would have been for naught.
- At the conclusion of HB 1365 hearings before the PUC, I predicted confidently that coal interests would litigate whatever was decided. As well they should: HB 1365 was proposed by coal’s competitors, in order to tilt the electricity market away from coal, and towards themselves. In light of the fact that coal’s competitors chose to compete in the legal arena, rather than the market, coal interests in Colorado have every right to defend themselves using the legal process. Here’s a litigation roundup.