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.
Colorado March 14 Energy Cheat sheet: Unencumbered from Clean Power Plan mandates, Hickenlooper opts to put Colorado in fiscal vulnerability; energy rate-payers are feeling the burn; environmental mandates make affordable housing as unaffordable as ever
Filed under: Environmental Protection Agency, renewable energy
When the Supreme Court issued a stay of the Clean Power Plan, state leaders should’ve celebrated; our weighty budget crisis just got a little lighter with costly energy mandates no longer imminent. Gov. Hickenlooper’s inexplicable decision to self-inflict these budget hits disappoints.
“One thing is clear: Any further effort to develop a state plan, full or partial, is a waste of taxpayer money. At a time when the state is facing a budget crisis, the agency’s position becomes even more untenable. Colorado’s unbridled zeal to charge on, absent the necessary certainty from the federal courts, coerces power providers to participate in an expensive process if only to ensure they don’t get run over.
Moreover, the benefits of developing new carbon regulations are nil, especially if Colorado proceeds on a piecemeal, stand-alone basis. Even if fully implemented, the federal Clean Power Plan would lower global temperatures a mere 0.02 of a degree — not enough to budge the needle. Rising sea levels? They’d be reduced by the thickness of two sheets of paper.”
And there’s no doubt that citizens are paying substantially higher rates for energy. Independence Institute energy analyst, Michael Sandoval, talks energy rates on-air with KOA’s Mandy Connell, confirming what we all have been suspecting: Colorado energy rates across all sectors (transportation, electricity, etc) have skyrocketed 67%, double the rate of inflation
Is there any escape from the tentacles of regulators? Not in the housing sector. After many billions of dollars were squandered on electric vehicle companies that flopped, Denver city leaders are mandating homebuilders install EV chargers in new home construction. Homebuilders’ frustrations and concerns are given little to no weight:
“The Denver planning department’s proposed changes were spurred by the 2015 update to the International Code Council’s suggested rules, which serve as a sort of industry standard, along with Denver-specific amendments.
Those include the new requirement for electric vehicle-supporting conduits and panels in garages for new houses.
Initially, that change faced opposition, especially from homebuilders concerned about the added cost in construction.”
The homebuilder’s concerns were never mitigated, making Denver’s homebuilders the latest in Colorado to voice concerns about costly regulatory layers and fees in the housing sector.
In the good news category, the Greeley city council will allow a 22-well oil and gas facility to go forward, overturning a decision made by its planning commission to deny the operation. Initially, the planning commission unanimously sided with protesting neighbors, but the city council determined that the property owners legally are allowed this use of their land, and may access the underground assets.
“After six hours of testimony on Tuesday, the Greeley City Council overturned its planning commission, allowing a 22-well oil and gas facility in west Greeley — a move that aligned with the city’s own development code rather than public sentiment.
Hundreds of people turned out for the hearing, an appeal by Denver-based Extraction Oil and Gas, of the Greeley Planning Commission’s January decision to deny its project, 6-0. The hearing filled the hearing room at the Greeley-Evans School District 6 administration building, as well as its lobby, where almost 300 chairs were brought into accommodate the crowds, filled with neighbors against the project and hundreds of oil and gas workers wearing stickers that read, “Oil and gas feeds my family and yours!”
But hours of often emotional testimony couldn’t negate one fact: this was a property rights issue…”
Independence Institute Future Leader Sarah Huisman prepared this edition of Cheat Sheet.
Filed under: CDPHE, Environmental Protection Agency, Legislation
(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.
Filed under: CDPHE, Environmental Protection Agency, Legal, Legislation, New Energy Economy, regulations, renewable energy, solar energy, wind energy
Across all sectors of Colorado the cost of electricity has skyrocketed more than 67 percent between 2001 and 2014, easily exceeding median income growth and the expected rate of inflation for the same period, an extended analysis of government energy records by the Independence Institute has revealed.
For all sectors between 2001 and 2014, the cost per kilowatthour jumped from just over 6 cents to more than 10 cents, or 67.11 percent.
Data obtained by the Independence Institute from the Energy Information Administration and the U.S. Census Bureau showed an increase in electricity rates for residential, commercial, industrial, and transportation sectors throughout the state contributing to the across-the-board growth in prices. In November, the Energy Policy Center reported a staggering increase of 63 percent for residential customers in Colorado.
“Retail residential electricity rates increased from 7.47 cents per kilowatthour in 2001 to 12.18 cents per kilowatthour by 2014, a 63.1 percent hike. Coloradans’ median income, however, went up just 24.1 percent, from $49,397 to $61,303. Median income in Colorado actually declined between 2008 and 2012,” the report concluded. It also noted that the U.S. Bureau of Labor and Statistics projected just a 34 percent increase in inflation for the 14 year period, using the agency’s CPI inflation calculator.
And while the data for late 2015 from the BLS indicated a modest decline of 2.9 percent in electricity prices for the Denver-Boulder-Greeley census area, this drop in rates did not offset the 3.8 percent increase seen one year earlier. While global commodity prices have given Colorado energy consumers a brief respite (and wild fluctuations in prices), electricity generation and costs have proven less volatile.
“The energy index, which includes motor fuel and household fuels, decreased 19.0 percent from the second half of 2014 to the second half of 2015, following an increase of 0.3 percent in the same period one year ago. Falling prices for motor fuel (-26.0 percent), all of which occurred in the first half of the period, were largely responsible for the decline in the energy component. Lower prices for utility (piped) gas service (-18.9 percent) and electricity (-2.9 percent) also contributed to the decrease. During the same period one year ago, motor fuel costs declined 3.1 percent, while the indexes for utility (piped) gas service and electricity rose 5.8 and 3.8 percent, respectively,” the BLS report concluded.
Analysis from the earlier November report on residential electricity rates stands confirmed and, indeed, underscored:
It’s clear from the data that Coloradans’ income is not keeping pace with almost continuous electricity price increases over the past 15 years, consistently outpacing the rate of inflation. Colorado’s ratepayers have had to endure two economic recessions over that period, while feeling no relief from escalating energy prices driven by onerous regulations driving energy costs ever higher.
From fuel-switching and renewable mandates to other costly regulations imposed by state and federal agencies, Colorado’s ratepayers and taxpayers alike have been subject to policies that do not consider energy affordability or reliability as a primary concern. The most vulnerable communities–elderly, minorities, and the poor–are the most sensitive to even the smallest increases in energy costs.
Not to mention the state’s many business owners, including small business owners, who face the same hikes in energy costs that could force decisions like layoffs or relocation to nearby states, where energy costs are lower. This reduces job growth and harms the state’s economy twice, with increased business costs passed on to consumers–the same ratepayers who already are paying more at the meter.
Upshot: the data for the remaining sectors emphasizes the double impact that increased energy costs have in the form of rapidly escalating electricity rates on Colorado ratepayers, who see not only their own personal energy costs rise, but are hit a second time by commercial, industrial, and transportation charges that are “baked into” the cost of providing goods and services that are passed on to consumers.
William Yeatman, senior fellow of environmental policy and energy markets at the Competitive Enterprise Institute and author of the Independence Institute’s 2012 Cost Analysis of the New Energy Economy, said in the November report that given the current regulatory climate, things “could get much worse.”
Some of the costs already baked in to electricity prices came directly from policy initiatives undertaken in the last decade.
Yeatman analyzed 57 legislative items included in the push for a “New Energy Economy,” determining that as much as $484 million in additional costs were incurred by the state’s Xcel customers–an additional $345 per ratepayer.
“The best explanation for this confounding upward trend in utility bills nationwide is the Obama’s administration’s war on coal. Colorado, alas, was well ahead of the curve on the war on coal, which explains much of why the state’s rate increases are presently so much greater than the nationwide average,” Yeatman said.
Part of the war on coal, the Environmental Protection Agency finalized the Clean Power Plan in August 2015.
The policy battle over the EPA’s Clean Power Plan, and the future of Colorado’s electricity rates, rests upon multi-state legal challenges to the agency’s authority that just last week resulted in a stay from the U.S. Supreme Court. That decision was overshadowed, however, by the subsequent death of Justice Antonin Scalia days later, leaving the legal challenge in turmoil given the SCOTUS’ delicate and likely 4-4 ideological split and the contentious election year battle over nominations to replace Scalia.
Meanwhile, Governor John Hickenlooper remains committed to pushing for a “prudent” continuation of planning for Clean Power Plan implementation, with the Colorado Department of Public Health and Environment proceeding with its pre-stay timeline. Colorado Senate Republicans, however, called ignoring the court’s stay “unacceptable.” Legislation addressing CDPHE’s ability to proceed with CPP planning will likely be introduced before the end of the 2o16 Colorado legislative session.
The Independence Institute’s analysis of electricity costs, broken down by the other sectors, shows commercial electricity rates for Colorado have seen a 77.78 percent increase from 2001 to 2014, jumping from 5.67 cents per kilowatthour to 10.08 cents.
Industrial rates have tracked with the overall rate increase of approximately 67 percent, from 4.48 cents to 7.47 cents per kilowatthour.
Transportation figures from EIA data do not extend back to 2001. Instead, the trackable data begins in 2003, with a sharp decline by 2005, before prices more than doubled, from 5.01 cents to 10.79 cents per kilowatthour, or a 115 percent increase in the last full 10 years of EIA measurement.
Overall increases for comparison (with the adjustment for transportation noted):
For a complete description of EIA definitions of electricity consumers and data collection, click here.
January 20 Colorado Energy Cheat Sheet: Billionaire Steyer plays CO politics; NM files intent to sue EPA over mine spill
Filed under: CDPHE, Environmental Protection Agency, Legislation, New Energy Economy, PUC, solar energy, wind energy
Independence Institute associate energy policy analyst Simon Lomax has the latest on green billionaire Tom Steyer’s efforts to tilt the legislative balance in Colorado in 2016:
San Francisco billionaire activist Tom Steyer is getting more deeply involved in Colorado politics than ever before. After spending more than $350,000 on research and polling in the Centennial State last year, two groups aligned with Steyer are now funding political attacks on State Senator Laura Woods (R). Republicans control the Colorado State Senate by a single vote, so unseating Woods could return control of the state legislature to Democrats and reinstate one-party rule under Gov. John Hickenlooper (D) until early 2019 at least.
Read all of his latest piece here.
Our neighbors to the south, New Mexico, has filed an intent to sue notice over the Animas River/Gold King Mine spill last year triggered by the Environmental Protection Agency:
ALBUQUERQUE, N.M. (AP) – New Mexico plans to sue the federal government and the owners of two Colorado mines that were the source of a massive spill last year that contaminated rivers in three Western states, officials said Thursday.
The New Mexico Environment Department said it filed a notice of its intention to sue the U.S. Environmental Protection Agency over the spill, becoming the first to do so. The lawsuit also would target the state of Colorado and the owners of the Gold King and Sunnyside Mines.
The New Mexico regulators said they will sue if the EPA does not begin to take meaningful measures to clean up the affected areas and agree to a long-term plan that will research and monitor the effects of the spill.
“From the very beginning, the EPA failed to hold itself accountable in the same way that it would a private business,” said Ryan Flynn, state Environment Department cabinet secretary.
While the Navajo Nation is considering its options for legal action, the state of Colorado’s Attorney General had no comment at this time.
Drilling on the Western Slope dropped in 2015:
Garfield County last year held onto the No. 2 spot statewide in terms of oil and gas drilling activity, despite the lowest level of activity since the 1990s.
Mesa County bucked the statewide trend in 2015, however, seeing a sharp increase in drilling and ranking third among Colorado counties.
Falling oil and gas prices resulted in drilling beginning on just 1,437 wells statewide last year, down from 2,239 the prior year, according to Colorado Oil and Gas Conservation Commission data. Much of the decrease occurred in Weld County as companies slowed oil drilling there thanks to falling prices. But the county still continued to see the bulk of activity last year, with drilling begun on 1,084 wells.
Garfield County had just 173 well starts last year, down from 362 in 2014. The last time the county saw less drilling, with 94 well starts, it wasn’t Jeb Bush but his brother, George, who was harboring presidential aspirations, in the year 1999.
Lower commodity prices have given Coloradans a bit of temporary relief, offsetting the region’s cost of living increases:
Two conflicting consumer price trends are pushing around the Denver area’s cost of living like a rag doll.
A new federal report Wednesday says that the cost of shelter in the Denver, Boulder and Greeley area jumped 5.8 percent in the second half of 2015 from a year earlier.
And yet, over the same period, energy costs fell 19 percent.
The result: a 1.4 percent year-over-year rise in the area’s overall consumer prices, the cost of a basket of typical goods and services, according to the report from the Bureau of Labor Statistics’ Kansas City office.
Shelter costs outweigh energy costs for most consumers, so shelter plays a bigger role in driving overall consumer prices.
The problem is that commodity prices fluctuate (due to market forces but also to environmental factors like government policies), and this small, offsetting bump for Colorado electricity ratepayers will provide only temporary relief. According to the Denver Business Journal, gasoline is down nearly 26 percent in 2015, with natural gas down nearly 19 percent. Household electricity was off 2.9 percent
On the other hand, gasoline cost 25.9 percent less in late 2015 than it did a year earlier, BLS said, while household natural gas cost 18.9 percent less and household electricity was down 2.9 percent. That’s hardly a dent in the 63 percent increase in residential electricity costs measured through 2014.
Job counters will see in a few years if the solar industry’s employment numbers are real (this time, and not an ephemeral mirage like so many other “green jobs”) and not temporary construction jobs and inferred “indirect jobs,” but for now they admit what is giving the solar folks a bump:
A few key developments are driving the job surge in solar.
Businesses and homeowners are eligible for a 30% tax credit if they install solar panels on their property. That’s been in place since 2006 but in December Congress renewed the tax credit for another six years. That lowers installation costs considerably.
The climate change agreement in Paris and the global action plan to limit global warming is also a positive for the clean energy industry.
And the Environmental Protection Agency released plans last year to force states to lower their carbon output.
Not much in the way of actual demand from consumers without government force (EPA’s Clean Power Plan) or government incentive (tax credit), or public pressure (Paris).
The article notes that lower commodity prices for oil and gasoline, and natural gas, are giving solar a “headwind.” Free market effects will do that.
Despite all the supply-side incentives (tax credits, subsidies, and mandates) and the demand-side disincentives (killing coal through the Clean Power Plan) the Energy Information Administration reports that solar was at 4.4 percent of all renewables in 2014 (last full year of data available), and a mere 0.4 percent of total U.S. energy consumption that year.
July 16 Colorado Energy Roundup: Sec. Jewell adds Colowyo Mine visit; renewable energy mandate upheld
Filed under: CDPHE, Environmental Protection Agency, Legal, preferred energy, renewable energy
A week after the Department of the Interior declined to move forward with an appeal in the Colowyo Mine case, and facing mounting pressure to visit the northwest portion of Colorado during a scheduled trip to Aspen, Sec. Sally Jewell appears to have conceded to a meeting with county commissioners:
Moffat County Commissioner John Kinkaid said Wednesday that Jewell has added a meeting with northwest Colorado county commissioners to her itinerary Friday following her speech at the Aspen Institute.
“We look forward to meeting Secretary Jewell this Friday evening,” Kinkaid said. “I hope that she will be able to give us some assurances that our miners can keep working.”
He said he expected the meeting to include commissioners from Moffat and Rio Blanco counties, whose communities would bear the brunt of a mine closure. The meeting will take place in Glenwood Springs.
Jewell had come under pressure to visit the area after it was announced that she would deliver remarks Friday at the Aspen Institute, about a three-hour drive from Craig, where residents are alarmed about the future of the mine.
We’ll keep you posted on developments of the planned meeting.
The mandate, which voters passed in 2004 and expanded in 2010, was challenged by the free-market advocacy group Energy and Environment Legal Institute. The group argued that the renewable energy requirements violate the U.S. Constitution.
The lawsuit claimed that the requirement that large utilities such as Xcel Energy get 20 percent of their electricity from renewable sources violates constitutional protections for interstate commerce.
The plaintiffs argued that because electricity can go anywhere on the grid and come from anywhere on the grid, Colorado mandate illegally harms out-of-state companies.
The 10th Circuit Court of Appeals in Denver disagreed. The three-judge panel ruled that the mandate does not wrongly burden out-of-state coal producers. The judges also pointed out that Colorado voters approved the mandate.
The full text of the ruling can be found here.
For those who do not think increased energy costs–whether from increased cost of supply of fuel, onerous regulations, or government picking (more expensive) energy winners–affect lower and middle income families in Colorado, a new examination of the state’s Low-Income Energy Assistance Program (LEAP) reveals how devastating even modest price increases in energy can be:
About 430,000 households in Colorado — 22 percent of all households — are eligible for federal energy assistance.
These households have incomes below 150 percent of the federal poverty level, or about $36,372 for a family of four.
About 13 percent of Colorado households are below the federal poverty line of $24,250 for a family of four.
The federal Low-Income Energy Assistance Program, or LEAP, administered by local agencies, provided $47 million for heating bills during the 2014-15 season.
The article laments that program has a low reach at the present time, with only 19 percent of those eligible receiving outreach.
But the article’s lede is buried–even small, incremental increases have a large and outsized effect on low-income folks given the portion of income they spend on energy:
Xcel, the state’s largest electricity utility, calculates monthly payments based on 3 percent of a household’s income.
Average households pay 2 percent to 3 percent for energy, compared with low-income households, which often pay as much as 50 percent.
“That leaves very little for food, clothing, medicine,” said Pat Boland, Xcel’s manager of customer policy and assistance.
“Once we get them in the door, we want to keep them in the door,” Boland said in a presentation.
According to the article, Black Hills reaches only 10 percent of those eligible within its system. It pays for the assistance by charging other ratepayers, and is considering a rate hike to cover the program, which is currently losing money. That hike, along with three other rate increases since 2008, make Black Hills among the most expensive electricity providers in the state, the Post article said.
Despite a quiet 2015, fracking is still maintaining a low boil on the backburner of the state’s energy debate, and there is every indication that it won’t be simmering any time soon, and Democratic Rep. Jared Polis told the Associated Press that options remain:
Polis said fracking could be on the 2016 ballot if state officials don’t further regulate the industry. He stopped short of saying whether he would organize the effort, but he wants lawmakers and regulators to adopt three proposals that weren’t formally recommended by the task force.
One would let local governments impose stricter rules than the Colorado Oil and Gas Conservation Commission, charged with regulating drilling statewide. Another would change the commission’s role from facilitating oil and gas development to simply regulating it. The third would set up a panel to resolve disputes between energy companies and local governments or property owners before they land in court.
It remains to be seen whether or not activists, with or without Polis’s sponsorship, pursue a strategy like they did in 2013, targeting friendly and even tossup municipalities with fracking bans and moratoria, or wait for statewide opportunities in the 2016 Presidential election cycle.
The Bureau of Land Management has closed off nearly 100,000 acres of federal land from future leasing:
The Bureau of Land Management rejected all 19 protests from conservation groups, the oil and gas industry and other interests in approving a new resource management plan for the Colorado River Valley Field Office.
The Colorado River Valley Field Office, in Silt, manages more than 500,000 acres of land and more than 700,000 acres of subsurface federal minerals in Garfield, Mesa, Rio Blanco, Pitkin, Eagle and Routt counties. The agency says the majority of the 147,500 acres with high potential for oil and gas production under the office’s jurisdiction are already leased and will continue producing under the plan.
The plan closes 98,100 acres for future leasing, including in the Garfield Creek State Wildlife Area near New Castle, areas managed for wilderness characteristics, areas of critical environmental concern, municipalities and designated recreation areas.
A second Craig-area coal mine apparently also will have to undergo a remedial federal environmental review process if it hopes to avoid a shutdown based on a recent court order.
The Trapper Mine near Craig is now looking at going through the same kind of review currently underway in the case of the Colowyo Mine between Craig and Meeker following a federal judge’s ruling in May.
U.S. District Court Judge R. Brooke Jackson, in a suit brought by WildEarth Guardians, found that the federal Office of Surface Mining Reclamation and Enforcement illegally approved expansions of the two mines because it failed to provide public notice of the decisions and account for the environmental impacts.
The Trapper Mine faces discrepancies over permitted areas and coverage under filings with Judge Jackson, who did not impose a similar ruling as that issued for the Colowyo Mine.
In a notice filed last week to alert the court about the new information, the Trapper attorneys said they support doing remedial environmental analysis involving the Trapper Mine after the Colowyo review is done.
Bob Postle, manager of the program support division for the OSMRE’s western region, said the notice has “just been filed, and we’re now working through how we’re going to address it.”
Given the discrepancies, it isn’t clear at this moment whether a new or remedial environmental review is necessary, according to Trapper’s legal counsel.
In a meeting with Republican Senator Cory Gardner, western slope businesses and entrepreneurs described facing onerous regulatory burdens imposed by DC bureaucrats:
A Moffat County sheepherder, Delta hardware shop owner and Grand Junction manufacturer all walked into a meeting Friday with U.S. Sen. Cory Gardner, R-Colo., each with much the same punchline in mind.
The common theme: The federal government is reaching too far into their businesses, discouraging them from seeking out new ways of doing business and growing.
Constraining regulations have “taken the creativity out of business,” Jim Kendrick, owner of Delta Hardware, told Gardner. “The move is to make us all do business the same way. That’s stifling growth.”
Gardner met with two dozen western Colorado business and economic leaders at Colorado Mesa University in hopes of finding ways to improve the state’s sputtering rural economy.
“I spend all my time on regulatory compliance and none of it on product development,” one Department of Defense contractor said. That would result in pushing more business to bigger vendors able to hurdle all of the regulatory red tape due to a larger staff.
Filed under: New Energy Economy, renewable energy, solar energy, wind energy
In 1999 Colorado enjoyed some of the lowest electricity rates in the United States and the Mountain West. In 2004, Colorado voters approved Amendment 37, requiring investor owned utilities to provide 10 percent of the electricity sold to end users to come from the preferred sources wind and solar.
Since 2004, the Colorado state legislature has mandated increases in the renewable portfolio standard, more appropriately titled the preferred energy standard, from 10 to 20 to the current 30 percent by 2020. Only Maine (40 percent by 2017) and California (33 percent by 2020) have more aggressive mandates, and they also have higher electric rates than Colorado.
Last year the state legislature passed a 20 percent preferred portfolio standard on Colorado’s rural electric cooperatives.
As the mandate to produce more electricity from wind and solar has increased so have Colorado’s electricity rates.
- In 1999 Colorado’s electric rates were 5.9 cents per Kilowatt hour (kWh) and were the 18th least expensive in the country.
- In the 1990s Colorado’s population increased by 30 percent, electricity demand grew 26 percent, yet real prices fell 25 percent in the same period.
- If electric rates simply kept pace with inflation, Coloradans would have paid 8.4 cents per kWh in 2013 instead of 9.83 cents per kWh.
- In 2000, Colorado’s residential rates were 7.31 per kWh; adjusting for inflation that’s the equivalent of 9.89 cents in 2013. Instead Coloradans now pay 11.91 cents per kWh for residential electricity.
- Colorado’s current electric rate for all sectors is 9.83 cents per kWh, nearly 7 percent higher than the Mountain West average of 9.21 cents per kWh.
- Colorado’s electric rates increased 4.5 percent last year while U.S. electric rates increased only 2.4 percent last year.
- At 11.91 cents per kWh, Colorado has the highest residential rates in the Mountain West.
- Colorado residential electric rates are the 20th highest in the nation, with California, Alaska, and Hawaii being the only western states with higher residential rates.
Most information available at the U.S. Energy Information Administration, Table of “Average Retail Price of Electricity to Ultimate Customer by End-Use Sector.”
USA Today reports that Americans’ household electric bills are going up and up and up. While Colorado’s residential rate is slightly below the national average of 11.54 cents per kilowatt hour, its higher than all neighboring states and second highest among the Mountain West states. Only Nevada has higher residential electric rates than Colorado. Most of the western states with the highest electric rates, also have the highest renewable energy mandates (Renewable Portfolio Standards or RPS).
Mountain West States Residential Electric Rates
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Colorado Residential Electric Rates versus Neighboring States
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