Progressive criticism of PUC nominee Vaad is about ALEC rather than energy

January 8, 2014 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

Progressive left logic: Progressives want to destroy ALEC. Moderate Republican PUC nominee Glenn Vaad has been a member of ALEC. Therefore progressives want to destroy Glenn Vaad even though he has supported increasing Colorado’s renewable energy mandate and fuel switching.

The progressive left’s criticism of Governor John Hickenlooper’s appointment of former State Representative Glenn Vaad (R-Mead) to Colorado’s Public Utilities Commission (PUC) appears to part of a coordinated national campaign against the American Legislative Exchange Council rather than Vaad’s record on energy policy, which is more in line with Democrats than free market conservatives. Vaad is awaiting State Senate confirmation, which is likely to happen sometime this week.

ALEC is a nonpartisan voluntary membership organization for conservative state lawmakers “who share a common belief in limited government, free markets, federalism, and individual liberty.” ALEC promotes such dangerous ideas like reducing excessive government spending, limiting the overall tax burden, choice in education, and market-based approach to renewable energy sources. As a state lawmaker, Glenn Vaad was a member.

The progressive left is obsessed with ALEC. In May 2013 several progressive organizations with ties to Colorado met to “coordinate their attack plan” as the Washington Free Beacon reported:

Leading progressive organizers met on May 10 to coordinate their attack plan against the American Legislative Exchange Council (ALEC), discussing ways to pressure corporations into abandoning the group for its small-government advocacy and turn against what they call the “vast, right-wing conspiracy.”

The participants, including representatives from such far-left groups as Common Cause, Color of Change, and ProgressNow, met for lunch in a conference room at the AFL-CIO headquarters in Washington, D.C.

The Free Beacon quoted Aniello Alioto of ProgressNow Colorado, summing up the strategy on attacking ALEC, “Never relent, never let up pressure, and always increase.”

By law, the three-member PUC cannot have more than two members from any one party. With Republican member James Tarpey retiring and the other two members Pam Patton and Chairman Joshua Epel being Democrats, that means the Governor had to find a qualified applicant within the Republican Party.  In theory, he could have looked for someone inside the Constitution, Libertarian, or Green Parties, but it’s likely that the qualified applicant pool was rather shallow.

So Governor Hickenlooper selected a very moderate Republican Rep. Vaad, who has the necessary qualifications as a former Weld County Commissioner and longtime employee of the Colorado Department of Transportation. Vaad’s 2011 Colorado Union of Taxpayers’ rating (a conservative legislative scorecard) was a modest 50 out of 100. Only nine House Republicans scored lower.

When it comes to energy policy, the environmental left should be pleased with Vaad’s nomination. As a state representative, Vaad co-sponsored HB07-1281, the bill to increase Colorado’s renewable mandate to 20 percent. He also sponsored then Governor Bill Ritter’s crowning jewel of his “new energy economy,” the controversial fuel-switching bill HB10-1365, which got nearly unanimous approval from the Democrat caucus but proved quite divisive for Republicans.

But Vaad’s actual legislative record doesn’t seem to matter. To the progressive left, his appointment is more about ALEC than Colorado’s PUC as the far-left Colorado Independent reports:

Groups opposed to Vaad’s appointment say he has not just been an ALEC member but an officer. They point to documents and reports posted by consumer-advocacy groups like Common Cause and progressive-politics organizations like the Center for Media and Democracy that show Vaad was Chair of the ALEC Commerce, Insurance and Economic Development task force while he was serving in the state legislature in 2011 and 2012 and that he had been accepting ALEC “scholarships” every year he was in the legislature dating back to 2006.

According to a press release from Gabe Elsner, executive director at the Energy and Policy Institute, quoted in the Independent:

There is a clear conflict of interest…In the past year, ALEC’s utility and fossil fuel members lobbied lawmakers in at least 15 states to introduce legislation repealing Renewable Energy Portfolio Standards. Now ALEC is launching a new wave of attacks on clean energy policies like solar net metering… There’s a real threat that Mr. Vaad will serve ALEC’s special interest members instead of Colorado families.

Well first, Rep. Vaad hasn’t been in the state legislature since the spring of 2012, and Mr. Elsner is talking about 2013. Also, there is no evidence that Vaad ever introduced legislation to repeal the renewable energy mandate. In fact, as stated earlier, he did just the opposite. (Although he did oppose HB10-1001, the 30 percent renewable mandate bill). Furthermore, he was on the Commerce, Insurance and Economic Development task force not the Energy, Environment and Agriculture.

Progressive left logic: Progressives want to destroy ALEC. Moderate Republican PUC nominee Glenn Vaad has been a member of ALEC. Therefore progressives want to destroy Glenn Vaad even though he has supported increasing Colorado’s renewable energy mandate and fuel switching.

The bottom line is that the opposition to Glenn Vaad is about attacking ALEC rather than Vaad’s qualifications or his perspective on energy policy. So the progressive left is willing to sacrifice about the best appointee they can hope for in order to “never let up the pressure, and always increase.”

I did call Glenn Vaad for comment but as of posting he has not returned the call.

FERC nominee Ron Binz the flipper

August 2, 2013 by Amy · Comments Off
Filed under: HB 1365, renewable energy 

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.

Eco-left prepares to double down on renewable mandate

March 14, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

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 pblake0705@comcast.net


Colorado's Coalition for Clean Energy Future

How CEI and II Toppled EPA Region 8 Administrator James Martin

March 14, 2013 by Amy · Comments Off
Filed under: Archive 

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 “bankruptentire sectors of the economy.

Country can breathe sigh of relief. We’re still stuck with him…

March 4, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

By William Yeatman and Amy Oliver Cooke

As Coloradans we thought we might have to apologize to the rest of the country if President Barack Obama nominated former one-term Colorado Governor Bill Ritter to head the Energy Department. If the President wanted to make electricity costs skyrocket and the eco-left community happy, Ritter was his guy, but the President didn’t pick him.

Today, the Denver Post’s Allison Sherry broke the news that MIT physicist Ernest Moniz got the nod and the environmental community is none too pleased according to Mother Nature Network:

Despite his dense résumé and desire to cut emissions, however, Moniz can be a polarizing figure in scientific and environmental circles. Few experts deny the value of a scientist as DOE chief, but many fans of renewable energy worry about Moniz’s gusto for natural gas and nuclear power — not to mention his financial ties to the energy industry.

‘We’re concerned that, as energy secretary, Ernest Moniz may take a politically expedient view of harmful fracking and divert resources from solar, geothermal and other renewable energy sources vital to avoiding climate disaster,’ Bill Snape of the Center for Biological Diversity said in a recent press release. ‘We’re also concerned that Moniz would be in a position to delay research into the dangers fracking poses to our air, water and climate.’

And the Washington Post reports:

But over the past couple of weeks, many environmentalists and some prominent renewable energy experts have tried to block the nomination of Moniz because of an MIT report supporting “fracking” — as hydraulic fracturing is commonly known — and because major oil and gas companies, including BP, Shell, ENI and Saudi Aramco, provided as much as $25 million each to the MIT Energy Initiative. Other research money came from a foundation bankrolled by shale gas giant Chesapeake Energy.

‘We would stress to Mr. Moniz that an ‘all of the above’ energy policy only means ‘more of the same,’ and we urge him to leave dangerous nuclear energy and toxic fracking behind while focusing on safe, clean energy sources like wind and solar,’ Sierra Club executive director Michael Brune said in a statement Monday.

The Sierra Club doesn’t have much credibility because financially it was sleeping with the enemy, having taken $26 million from Chesapeake Energy to destroy the market for coal.  One place they enjoyed great success was in Colorado with HB 1365, the fuel switching bill and cornerstone of Ritter’s “New Energy Economy.”

Governor Ritter coined the term New Energy Economy for his signature agenda. In practice, his New Energy Economy entails three policies: (1) a Soviet-style green energy production quota; (2) subsidies for green energy producers; and (3) a mandate for fuel switching from coal to natural gas. Renewable energy is more expensive than conventional energy, and natural gas is twice as expensive as coal in Colorado, so these policies inherently inflated the cost of electricity.

Last month, the Independence Institute published the first ever line item expensing of Ritter’s energy policies, and the results were shocking. In 2012, the New Energy Economy cost Xcel Energy (the state’s largest investor-owned utility) ratepayers $484 million, or 18 percent of retail electricity sales.

This princely sum purchased the equivalent of 402 megawatts of reliable capacity generation. By comparison, Xcel had a surplus generating capacity (beyond its reserve margin) in 2012 of 700 megawatts—almost 75 percent more than the New Energy Economy contribution. Thanks to Governor Ritter’s energy policies, Xcel ratepayers in Colorado last year paid almost half a billion dollars for energy they didn’t need.

In addition to implementing expensive energy policies, Governor Ritter also has experience picking losers in the energy industry. In May 2009, Governor Ritter hand-delivered to Secretary Chu a letter in support of a $300 million loan guarantee for Colorado-based Abound Solar, a thin-filmed solar panel manufacturer. In the letter Ritter claimed Abound would “triple production capacity within 12 months, develop a second manufacturing facility within 18 months and hire an additional 1,000 employees.”

Taxpayer money couldn’t keep Abound afloat, which never reached production capacity. After its solar panels suffered repeated failures, including catching fire, Abound declared bankruptcy in early 2012 leaving taxpayers on the hook for nearly $70 million and even more at the state and local level. A former employee explained, “our solar modules worked so long as you didn’t put them in the sun.”

Abound Solar wasn’t the only pound-foolish Stimulus spending associated with Governor Ritter. During his administration, the Colorado Energy Office’s coffers swelled with almost $33 million in stimulus subsidies for weatherization efforts. According to a recent report by the Colorado Office of State Audits, the Ritter administration failed to even maintain an annual budget for the program. As a result, the audit was unable to demonstrate whether the money had been spent in a cost effective manor. All told, the auditor found that the energy agency could not properly account for almost $127 million in spending during the Ritter administration.

Ritter told the Fort Collins Coloradoan that the scathing audit accusing the agency under his watch of shoddy management practices was not the reason the President passed over him for Energy Secretary.

The former Governor is especially proud of the job creation associated with the New Energy Economy. To be sure, throwing taxpayer money at any industry would create jobs. The problem occurs when the public money spigot runs dry. In this context, an October 22, 2012 top fold, front page headline in the Denver Post is illuminating: “New energy” loses power; A series of setbacks cost over 1,000 jobs and threatens the state’s status in the industry. To put it another way, in the two years since Ritter left office, his New Energy Economy has atrophied in lockstep with the reduction in public funding.

Ritter has taken to proselytizing for the gospel of expensive energy. He founded the Center for the New Energy Economy, the purpose of which is to, “provide policy makers, governors, planners and other decision makers with a road map that will accelerate the nationwide development of a New Energy Economy.” He even brought with him the former head of the beleaguered energy office Tom Plant to work for him as a “policy advisor.”

So far Ritter’s bad energy policy has remained largely within the Centennial State, and, for now, that’s where it will stay. With the choice of Moniz, the rest of the country can breathe a sigh of relief. For Coloradans, we’re still stuck with him.

William Yeatman is the Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute and a policy analyst for the Independence Institute in Denver, Colorado. Amy Oliver Cooke is the Director of the Energy Policy Center for the Independence Institute

Natural gas double price of coal in Colorado

February 7, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

According to the most recent Form 10-K that Xcel Energy, Colorado’s largest investor owned utility (IOU), filed with the Security and Exchange Commission dated December 31, 2011, electricity generation from natural gas was more than double the price of electricity generated from coal in Colorado.

A table on page 18 of the report shows that in 2011, Xcel produced 76 percent of its electricity from coal at a cost of $1.77 per MMBtu while natural gas cost $4.98 per MMBtu while providing 24 percent of Xcel’s electricity.

As more and more of Xcel’s electricity is mandated to come from natural gas thanks to HB 1365, the fuel switching bill and the cornerstone of what former Governor Bill Ritter coined the “new energy economy,” along with additional regulations and out right bans on hydraulic fracturing, Xcel ratepayers should get used to spending more and more on their electricity bills.

Disgraced EPA Official Joins Sierra Club

June 29, 2012 by Amy · Comments Off
Filed under: Archive, CDPHE, HB 1365 

The disgraced former EPA regional official forced out after Senator James Inhoff (R-Oklahoma) posted a video of his enforcement philosophy for fossil fuel companies has found a home with the Sierra Club and its anti-coal campaign.

EENews reports:

Al Armendariz will take over leadership of the group’s “Beyond Coal” campaign office for Austin, Texas, on July 15.

He’ll coordinate efforts to move the Lone Star State away from coal-fired electric generation and toward wind, solar and other low-carbon alternatives, said Beyond Coal director Bruce Nilles in an interview.

Armendariz, former administrator of EPA Region 6, resigned last spring after a video surfaced revealing his “enforcement philosophy” for oil and gas developers to be analogous to the Roman crucifixion of the “first five villagers” in a conquered territory.

Just two years ago, the Rocky Mountain Chapter of the Sierra Club was instrumental in getting the Colorado General Assembly to pass HB10-1365 mandatory fuel switching away from coal to natural gas. That love affair ended abruptly last month when the national headquarters announced that it no longer supported natural gas as a “bridge fuel” for electricity generation.

Senator Inhoff told EENews that Armendariz’s new position was no surprise to him, “At least at the Sierra Club, he won’t get into so much trouble for telling the truth that their agenda is to kill oil, gas and coal.”

SB 178: sordid tale to increase renewable mandate

April 28, 2012 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

“One hundred nine days into a 120-day session you introduced major [energy policy] legislation,” Senator Steve King (R-Grand Junction) skeptically asked of SB 178 sponsor Senator Angela Giron (D-Pueblo).

Sen. King’s skepticism is justified because SB 178 is a significant policy change that increases Colorado’s renewable energy mandate by 20 percent.  Because renewable energy is not competitive with traditional fossil fuels, supporters of the mandate originally included a multiplier to make it more palatable when advancing prior legislation to increase the mandate.

Under current law, for every kilowatt-hour of electricity provided by a renewable resource it counts as one and one quarter hour toward Colorado’s 30 percent renewable mandate. In other words, Colorado’s actual mandate is 24 percent.  SB 178 REMOVES the multiplier, raising the mandate significantly and, ultimately, electricity rates.

During testimony on Tuesday, April 24, in the Senate Judiciary Committee, the sordid legislative tale of SB 178 began to unfold. It has been dubbed “son of 1365,” referring to the collusion and fast tracking of Colorado’s infamous fuel-switching bill passed in 2010.

Winners

Renewable energy companies are win big with SB 178 because utilities will be forced to either “build more or buy more” renewable energy. No shock that wind and solar advocates testified in favor.

New Energy Economy advocates who still believe that wind and solar are commercially viable energy sources, despite overwhelming evidence to the contrary also win because SB 178 continues to fuel their green fantasies.

Xcel Energy doesn’t show up on a search of lobbyists for and against SB 178, but a number of sources tell me that Colorado’s largest investor owned utility (IOU) has been working hard on this bill at the state capital. Why? Because Xcel has banked significant renewable energy credits (RECs), which they can sell to other utilities in order to meet the higher standard. Also, as energy rates go up, and they will under SB 178, Xcel makes more money because the Public Utility Commission guarantees Xcel’s rate of return. (Example: 10 percent of $100 is a lot more than 10 percent of $75)

The Chinese will be big winners – yes, the Chinese. The more we rely upon wind and solar as a source of energy, the more dependent we become on the Chinese who control 95 percent the world’s supply or rare earth minerals necessary to manufacture solar panels and wind turbines.

Losers

Consumers and the economy will lose big. Representing Black Hills Energy, Colorado’s second largest IOU, Wendy Moser testified against SB 178 because Black Hills estimates rates will rise 25 percent in order to pay for the increased mandate.  The increase will stifle all economic activity because energy costs will needlessly take a larger percentage of consumers’ and businesses’ budgets.

Large energy consumers such as mining companies and heavy manufacturing which are energy intensive will lose big because their cost of doing business will go up and make them less competitive.

The environment is also a loser; as we have documented renewable energy is neither clean nor green. In fact, if Colorado exacerbates reliance on China, we fuel the pending ecological disaster.

Highlights from testimony on SB 178

  • Supporters call eliminating the 1.25 multiplier “leveling the playing field” because it’s time renewables compete in a “free market.” Advocates repeated these catch phrases numerous times, and I assume they did so with a straight face (I only listened to testimony).  If they truly believed in a free market, the discussion would be about eliminating the 30 percent renewable mandate rather than just a multiplier.
  • Supporter Neal Lurie from the Colorado Solar Energy Industry Association (COSEIA) had the audacity to call eliminating the multiplier good for transparency for consumers. Just a year ago, COSEIA testified against SB11-30 transparency for ratepayers, Senator Scott Renfroe’s bill that would have required IOUs such as Xcel to disclose the actual cost of electricity by fuel source on a quarterly basis.  Lurie and COSEIA don’t want consumers to know the real cost of renewable energy because they know it far exceeds the misleading “2 percent rate cap.”
  • Black Hills and Tri-State Generation, electricity provider to numerous local co-ops, combined represent roughly 1 million ratepayers in Colorado. Yet bill supporters never consulted either company about SB 178.  These two power providers did not find out about this attempt at massive policy change until a few days before testimony. Thank you to Senator King for repeatedly bringing up the timeline.
  • The Public Utilities Commission (PUC) continues the 2 percent rate cap sham that we have discredited on numerous occasions. The total cost of renewable energy is not contained within the two percent rate cap on consumers’ bills, see the paper I co-authored with William Yeatman “The Great Green Deception.” Updated figures and brief explanation of how Xcel avoids the 2 percent cap are provided below.*
  • Gene Camp of the PUC initially testified that raising the mandate by 20 percent would have no impact on ratepayers’ electric bills. Following a discussion of what will happen to the two percent rate cap, Senator Kevin Lundberg (R-Berthoud) pressed that increasing the amount of energy derived from a more expensive fuel source will increase rates. Silence befell the room for 5 or 6 seconds before Camp then responded that it’s up to legislature because he is unsure what will happen.
  • Attorney General John Suthers’ office testified in favor of SB 178 because the current multiplier applies only to Colorado produced renewable power and may be unconstitutional. When Senator Lundberg suggested that Colorado extend the multiplier to all renewable power producers regardless of location, the AG office agreed that likely would satisfy the constitutional issue.
  • Senator Ellen Roberts (R-Durango) wondered why no one caught the constitutional conflict before.
  • Sen. Lundberg did offer an amendment to extend the multiplier to all states and save consumers money, but it was defeated.

Like HB 1365, SB 178 makes a mockery of the legislative process. This bill smells dirty. Introduced at the last moment and key stakeholders were not even invited to participate. It’s a disaster for Colorado ratepayers. It’s not about consumers or markets or leveling the playing field, SB 178 is about enriching the eco-left and Xcel Energy.  That’s no shock because whatever Xcel wants, Xcel gets.

*The following comes from an op-ed I co-authored with energy policy center colleague Michael Sandoval and originally published in January. It provides a brief summary of how the PUC allows Xcel to avoid the two percent rate cap.

It is true Xcel stayed within the two percent rate cap line item labeled the Renewable Electric Standard Adjustment (RESA) on customers’ electric bills. But it is not true that the RESA represents the real, total cost of renewable energy to Xcel ratepayers, and Bakers knows it.

Two years ago in the “Great Green Deception,” the Independence Institute exposed how the PUC allows Xcel to hide the real cost of renewable energy by utilizing two line items on a ratepayer’s bill.  Customers pay two percent of their bill through RESA, but the balance of the total cost of renewable energy is captured through another fund – the Electric Commodity Adjustment (ECA) – that is likely the second largest line item cost.

The practice continues today as Xcel’s Robin Kittel explained in direct testimony to the PUC regarding its 2012 Renewable Energy Standard Compliance Plan. According to Kittel, Xcel recovers the cost of renewable energy “through a combination of the RESA and ECA.”

The ECA is NOT subject to the legislatively mandated two percent rate cap. The Public Utility Commission staff’s William Dalton acknowledged the PUC’s role in confusing the public about the rate cap in his September 2009 testimony before the commission:

“This could be a point of confusion to ratepayers and other interested parties…The costs above the retail rate impact limit are recovered through other Commission approved cost recovery mechanisms, primarily the ECA. [Emphasis ours] Once the renewable energy resource cost recovery is allocated to the ECA, cost recovery of these resources is no longer subject to retail rate impact criteria or cost cap.”

According to Xcel’s 2012 Renewable Energy Compliance Plan, ECA costs were $35,280,340 in 2011, but will explode by more than 1000 percent to $354,819,209 in 2021 (thanks also to Colorado’s $20 per ton “phantom carbon tax”). Yet Xcel and Baker [PUC Commissioner Matt Baker] can claim to be within the two percent rate cap for the RESA.

It is easy to be angry with Xcel for all the cost shifting shenanigans, but the blame should be placed on lawmakers and PUC commissioners.

Baker out at PUC

March 31, 2012 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Public Utilities Commissioner Matt Baker is leaving the PUC to join the William and Flora Hewlett Foundation, a left-leaning non-profit, as “an officer in its Environment Program” foundation officials announced yesterday. Former Governor Bill Ritter appointed the environmental activist Baker in 2008, and his term had expired without current Governor John Hickenlooper acting to reappoint Baker to another term.

Baker was instrumental in steering the state’s “new energy economy” as both an activist and a PUC commissioner. In January the Energy Policy Center raised questions about Baker’s ability to serve as an independent regulator:

Conventional wisdom in energy policy circles says that Governor John Hickenlooper will re-appoint current Public Utilities Commissioner Matt Baker to another four-year term on the PUC. His State Senate confirmation will be a mere formality, but it shouldn’t be.

Serious questions linger about his lack of honesty regarding energy costs and his ability to be an independent regulator.

Rather than regulate Colorado’s investor-owned utilities, the environmental activist-turned-regulator Baker is more interested in advancing his green energy agenda to the detriment of Colorado ratepayers. He and former PUC Chairman Ron Binz (whose own re-appointment was derailed with an ethics violation after which he withdrew his name for consideration) were instrumental in negotiating the language of HB 1365, a senseless fuel-switching bill and the “crown jewel” of Bill Ritter’s New Energy Economy that will cost ratepayers more than $1 billion.

This is blow to the environmental left and Xcel Energy because Baker provided them a seemingly credible voice to perpetuate the myth that Colorado’s 30 percent renewable energy mandate costs electricity ratepayers a mere two percent on their Xcel Energy bills. As we have demonstrated before and reiterated in January this is simply untrue, and Baker and Xcel both know it.

Baker’s love affair with renewable energy prevents him from being objective about Colorado energy policy and thus not honest with the people he is charged with serving – eroding consumer rights and driving up energy costs with regulatory sleight of hand.

In a recent op-ed in RenewablesBiz.com, Baker gushes over the advancement of his green agenda. He repeats one the biggest renewable falsehoods green activists have perpetuated on Colorado ratepayers: Colorado’s largest utility Xcel Energy can acquire 30 percent of its power from expensive renewable sources while keeping a cap on electric rates.

Most ratepayers believe that means that the renewable energy mandate – energy from sources such as wind and solar – will only cost them an additional two percent on their electric bill. “While Colorado’s largest utility, Xcel Energy, has exceeded its goals, it has stayed within the 2 percent cap set by the legislature,” says Baker.

It is true Xcel stayed within the two percent rate cap line item labeled the Renewable Electric Standard Adjustment (RESA) on customers’ electric bills. But it is not true that the RESA represents the real, total cost of renewable energy to Xcel ratepayers, and Bakers knows it.

We were also the first to expose that Baker and fellow commissioner Ron Binz spent a lot of time traveling, which led to ethics complaints being filed against both men. Binz left the PUC rather than seek a second term. In December the ethics commission found that Binz violated the state constitution by accepting a trip paid for by a company he was supposed to regulate. The same commission recently decided there was not “sufficient evidence” to prove that Baker’s trip to Seville, Spain, paid for a spanish government owned company, violated Colorado’s ethics law.

What remains to be seen is who Governor Hickenlooper will appoint to replace Baker. If the Governor’s first appointee, Chairman Josh Epel, is any indication of how he envisions the role of the PUC, ratepayers can expect more balanced treatment in the future.

Questions about Baker’s ability to serve on the PUC

January 25, 2012 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

Conventional wisdom in energy policy circles says that Governor John Hickenlooper will re-appoint current Public Utilities Commissioner Matt Baker to another four-year term on the PUC. His State Senate confirmation will be a mere formality, but it shouldn’t be.

Serious questions linger about his lack of honesty regarding energy costs and his ability to be an independent regulator.

Rather than regulate Colorado’s investor-owned utilities, the environmental activist-turned-regulator Baker is more interested in advancing his green energy agenda to the detriment of Colorado ratepayers. He and former PUC Chairman Ron Binz (whose own re-appointment was derailed with an ethics violation after which he withdrew his name for consideration) were instrumental in negotiating the language of HB 1365, a senseless fuel-switching bill and the “crown jewel” of Bill Ritter’s New Energy Economy that will cost ratepayers more than $1 billion.

After a stint at Colorado Public Interest Research Group (CoPIRG), Baker subsequently helmed the advocacy group Environment Colorado from 2003 until his elevation by Ritter to the PUC in 2008. During his tenure he led the campaign for 2004’s Amendment 37 requiring utilities to implement renewable energy standards. Ritter lauded the “architect” of the – now – 30 percent renewable energy standard as a “champion of Colorado’s environment and consumer rights.”

But Baker’s love affair with renewable energy prevents him from being objective about Colorado energy policy and thus not honest with the people he is charged with serving – eroding consumer rights and driving up energy costs with regulatory sleight of hand.

In a recent op-ed in RenewablesBiz.com, Baker gushes over the advancement of his green agenda. He repeats one the biggest renewable falsehoods green activists have perpetuated on Colorado ratepayers: Colorado’s largest utility Xcel Energy can acquire 30 percent of its power from expensive renewable sources while keeping a cap on electric rates.

Most ratepayers believe that means that the renewable energy mandate – energy from sources such as wind and solar – will only cost them an additional two percent on their electric bill. “While Colorado’s largest utility, Xcel Energy, has exceeded its goals, it has stayed within the 2 percent cap set by the legislature,” says Baker.

It is true Xcel stayed within the two percent rate cap line item labeled the Renewable Electric Standard Adjustment (RESA) on customers’ electric bills. But it is not true that the RESA represents the real, total cost of renewable energy to Xcel ratepayers, and Bakers knows it.

Two years ago in the “Great Green Deception,” the Independence Institute exposed how the PUC allows Xcel to hide the real cost of renewable energy by utilizing two line items on a ratepayer’s bill.  Customers pay two percent of their bill through RESA, but the balance of the total cost of renewable energy is captured through another fund – the Electric Commodity Adjustment (ECA) – that is likely the second largest line item cost.

The practice continues today as Xcel’s Robin Kittel explained in direct testimony to the PUC regarding its 2012 Renewable Energy Standard Compliance Plan. According to Kittel, Xcel recovers the cost of renewable energy “through a combination of the RESA and ECA.”

The ECA is NOT subject to the legislatively mandated two percent rate cap. The Public Utility Commission staff’s William Dalton acknowledged the PUC’s role in confusing the public about the rate cap in his September 2009 testimony before the commission:

“This could be a point of confusion to ratepayers and other interested parties…The costs above the retail rate impact limit are recovered through other Commission approved cost recovery mechanisms, primarily the ECA. [Emphasis ours] Once the renewable energy resource cost recovery is allocated to the ECA, cost recovery of these resources is no longer subject to retail rate impact criteria or cost cap.”

According to Xcel’s 2012 Renewable Energy Compliance Plan, ECA costs were $35,280,340 in 2011, but will explode by more than 1000 percent to $354,819,209 in 2021 (thanks also to Colorado’s $20 per ton “phantom carbon tax”). Yet Xcel and Baker can claim to be within the two percent rate cap for the RESA.

It is easy to be angry with Xcel for all the cost shifting shenanigans, but the blame should be placed on lawmakers and PUC commissioners. At best Baker is being disingenuous with Colorado ratepayers. At worst, he is flat out lying about the real costs of renewable energy in order to advance his own personal agenda.

Matt Baker’s re-appointment and confirmation should not be a rubber stamp. Colorado ratepayers deserve better.

Amy Oliver Cooke and Michael Sandoval co-authored this post.

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