November 5 Colorado Energy Cheat Sheet: Hickenlooper seeks CO Supreme guidance on Coffman EPA lawsuit; divestment movement is back at CU; WOTUS opposition in U.S. Senate

November 5, 2015 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legislation, PUC, regulations 

Governor John Hickenlooper finally filed his request with the Colorado Supreme Court to determine which office–governor or attorney general–has the final say in Colorado’s lawsuit against the Environmental Protection Agency’s Clean Power Plan. Attorney General Cynthia Coffman, joined the lawsuit with approximately two dozen other states in October.

Via the BARN blog:

Gov. John Hickenlooper today filed a petition asking the Colorado Supreme Court to issue a legal rule that the governor, not the attorney general, has the ultimate authority to decide on behalf of the state when to sue the federal government in federal court.

“The attorney general has filed an unprecedented number of lawsuits without support of or collaboration with her clients,” said Jacki Cooper Melmed, chief legal counsel to the governor. “This raises serious questions about the use of state dollars and the attorney-client relationship between the governor, state agencies and the attorney general.”

From the full petition:

Governor Hickenlooper petitions this Court under Colorado Constitution art. VI, § 3, and C.A.R. 21 for a rule requiring Attorney General Coffman to show cause regarding her legal authority to sue the United States without the Governor’s authorization. In this Petition, he requests a ruling on the Governor’s and Attorney General’s respective authority under the Constitution and laws of Colorado to determine whether the State of Colorado should sue the United States. The Governor asks this Court to issue a legal declaration that (1) the Governor, not the Attorney General, has ultimate authority to decide on behalf of the State of Colorado whether to sue the federal government, and (2) the Attorney General’s lawsuits against the federal government without the Governor’s authorization must be withdrawn.

No doubt this request will remain at the top of the news between the Democratic Governor and the Republican Attorney General as the hotly contested and controversial Clean Power Plan moves forward despite pending lawsuits. The EPA has already schedule a series of public hearings on the CPP implementation at four locations over the next two weeks in Pittsburgh, Atlanta, Washington, DC, and Denver.

How contested is the rule? At least twenty-six states have filed lawsuits–24 in a joint lawsuit, with two other states filing separately–while 18 states have filed a motion on behalf of the EPA and the Clean Power Plan.

The Clean Power Plan has split the country in half. More to come.

***

Earnest but misguided students at the University of Colorado have resurrected their divestment push and will harangue the CU Board of Regents with the usual mix of ideology and theater today, even after being voted down 7-2 back in April:

Also on Thursday, the student group Fossil Fuel CU is planning an “action” toward the end of the board’s meeting, complete with banners, signs, posters and singing. That’s likely to be a recurring theme again this year.

“The folks who don’t stand with us anticipated that that block in process would dishearten student leaders or stifle the campaign we’ve been building for two years, but it actually did quite the opposite,” said P.D. Gantert, who is taking time off from CU classes to organize divestment movements across the southwestern United States. “It emboldened us to take even more risky and loud actions to stand up for what we know is the change that needed to happen at our university.”

Here’s what I had to say back in April during a board meeting and hearing on the divestment question, as quoted by the Daily Camera:

“The anti-fossil fuel campaign is really a national campaign run by far-left environmental activists,” said Michael Sandoval of the Independence Institute, a free-market think tank in Denver, during a board meeting in April. “To be blunt, this is a national campaign using college students to shut down one of Colorado’s leading job creators.”

Schools from Swarthmore to Harvard, hardly conservative bastions, have rejected the arguments in favor of divestment. Our own spring intern, Lexi Osborn, took down the divestment arguments in an op-ed for the Greeley Tribune back in February:

Divestment activists appear willing to jeopardize university assets in the name of saving the planet. Yet they may not realize how ineffective their project would be.

A new report by the American Security Project found that university divestment from fossil fuels will have no mitigating effects on carbon emissions. Divestment does not decrease the demand for fossil fuels; it merely moves the money around. The campaign additionally ignores the complexities of transitioning to a “renewable and emission-neutral economy.”

Another study by University of Oxford found that, even if all capital were divested from university endowments and public pension funds, it would be such a small percentage of the market capitalization of traded fossil fuel companies that the divestment would barely impact the fossil fuel industry.

But the divestment of fossil fuel assets might not be the real goal of the campaign. In a video interview, Klein states that they are using the movement to create a space where it is easier to tax, nationalize and undermine oil companies. She claims that the people have a right to the oil industry’s “illegitimate” profits to make up for the crisis created by this sector.

***

The U.S. Senate moved beyond court injunctions on the EPA’s stalled Waters of the United States rule this week, with Republicans pushing forward on a repeal measure and another calling for revisions, with the former facing a veto from the Democratic administration, and the latter falling to Democratic opposition in the Senate itself:

“Coloradans know when they’re getting soaked,” Colorado Sen. Cory Gardner, a Republican, said following votes on Tuesday. “This rule is so poorly written and ill-conceived that multiple federal judges have put halts on its implementation.”

The resolution that passed in an effort to essentially repeal the rule fell under the Congressional Review Act, which allows for a simple majority to disapprove of any regulation. It passed Wednesday 53-44. The White House has already issued a veto threat.

The measure calling on the Environmental Protection Agency to rewrite the water rule required a procedural vote to advance. But it fell three short of the 60 votes needed, with Democrats leading the effort to stop the bill.

Gardner supported a rewrite in order to enact stronger state and agricultural protections with more input from local communities. He also supported the resolution eliminating the rule.

“The WOTUS rule is a classic example of federal overreach, giving the EPA authority to regulate ponds, ditches and tiny streams across Colorado and the West,” Gardner said.

Sen. Michael Bennet helped quash the rewrite measure.

***

The ongoing battle between the city of Boulder and Xcel Energy received clarification from the Public Utilities Commission this week.

***

Despite production records, Noble Energy sees losses in the third quarter due to lower commodity prices, and will likely trim staff numbers later this month.

PUC “quasi-legislative”?

January 26, 2012 by Amy · Comments Off
Filed under: Archive, HB 1365 

In testimony before the House Transportation Committee for his bill HB12-1016 (detailed earlier) on January 25, Rep. David Balmer stated that he considered introducing a bill that would strip the Public Utilities Commission (PUC) of any legislative authority.

Since the PUC apparently has “quasi-legislative” powers and “quasi-judicial” power, shouldn’t PUC commissioners be elected so that the people of Colorado have a say in the direction of utility, transportation, and telecommunications policy?

Balmer’s bill, which would have required more transparency in the PUC, was postponed indefinitely. Two legislators Representatives Glenn Vaad and Marsha Looper supported additional transparency.

Energy in 2012 GA: Legislators address HB 1365, tiered rates and the PUC

January 22, 2012 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

Two years after the passage of the fuel-switching bill HB 1365, Governor Bill Ritter’s “crown jewel” of the new energy economy, supporters would like the debate to go away. But like a nagging cough, it just won’t.

Several bills in the 2012 legislative session address issues raised surrounding the collusion to draft HB 1365, the cost recovery, and the role of the Public Utilities Commission (PUC).

Also legislators want the PUC to provide an annual report to the General Assembly and to prohibit tiered rates as a way to reduce monthly electric consumption.

Bill Summaries

HB12-1016 PUC Ex Parte Communications

House Sponsors: David Balmer (R-HD 39)

Senate Sponsors: None

This bill addresses conflicts of interest such as those that occurred with HB 1365 when PUC commissioners helped draft the language of the bill and then sat in judgment of it.  In November 2010, William Yeatman reported that several Colorado State Senators sent a letter to Governor Bill Ritter asking him to remove then Commissioner Ron Binz and Commissioner Matt Baker from deliberations on HB 1365.

The Colorado Mining Association (CMA) also requested that Binz and Baker recuse themselves because of the obvious conflict of interest but both men refused.  A disappointed CMA president Stuart Sanderson told the Denver Post:

[that he’s] not at all surprised by the ruling, which was made by the same commissioners who engaged in the back-room negotiations that led to both the enactment of (the clean-air act) and the plan to switch the Front Range generating stations from affordable coal to higher-cost natural gas.

William suggested in 2010 that this issue should be taken up by the General Assembly:

Of course, it is inappropriate for the PUC to be writing legislation in cahoots with the utility that it regulated, but that’s an issue for the State Legislature. More precisely, why did the General Assembly pass a law written in large part by a utility? That’s where the system failed.

With HB12-1016, it appears the General Assembly will at least have a conversation about it. According to the fiscal note:

The bill modifies the operations of the Public Utilities Commission  (PUC) in several ways. It specifies that the Colorado Code of Judicial Conduct applies to PUC commissioners and administrative laww judges (ALJ). It requires ex parte communication memoranda (private communications between a PUC commissioner or ALJ and an interested person) to be posted on the PUC website within five business days after it is filed. The records of communications between two or more commissioners concerning pending legislative proposals are made subject to disclosure in accordance with the “Colorado Open Records Act.”

When a party to a proceeding before the PUC has a good-faith belief that a commissioner or ALJ may not be impartial or has engaged in a prohibited communication, the party my file a motion to disqualify the commissioner of ALJ from the hearing. The PUC must immediately suspend the proceeding and rule upon the motion within ten business days. If the motion for disqualification is approved, and this results in the loss of a quorum, the decision rendered by a commissioner designated as a hearing officer or the ALJ is the final decision of the PUC.  Any appeal of this final decision may be taken directly to district court rather than be reconsidered by the PUC.

In other words, communication must be made public and the PUC can’t be the court of last resort.

HB12-1102 Cap Clean Air/Clean Jobs Electricity Rate Impact

House Sponsors: Spencer Swalm (R-HD 37), Balmer, Chris Holbert (R-HD 44), John Soper (D-HD 34)

Senate Sponsors: Lois Tochtrop (D-SD 24)

This bill caps requires the PUC “to establish a maximum retail rate impact of 1 percent of the annual total base rate electric bill for each customer” for the cost recovery of HB 1365.

The interesting part about this bill is its bi-partisan support in the House and an electric ratepayer advocate sponsor democrat Lois Tochtrop in the Senate.

Prediction: Leadership in both the House and Senate will provide cover for Xcel and environmentalists as they did last year. This won’t pass; too many special interest groups have too much invested.

HB12-1121 PUC Hearings Utilities Ratepayers’ Bill of Rights

House Sponsors: Ray Scott  (R-HD 54)

Senate Sponsors: None

This bill declares that the interests of ratepayers are not recognized at Public Utilities Commission (PUC) proceedings, therefore:

  • Investor Owned Utilities (IOU), such as Xcel Energy, must consider the interests of ratepayers as well those of shareholders.
  • The PUC must “require” IOUs to focus on the needs of consumers including “providing reasonable rates, improved customer service, and fair treatment.”
  • “Transparent and understandable” rate increase information including “using advanced-information processing capabilities” to estimate the cost to specific consumers rather than the hypothetical consumer average.
  • IOUs cannot pass along to ratepayers the cost of research and development.
  • IOUs cannot pass along to ratepayers the cost of complying with environmental regulations that have not been enacted by the federal government.
  • IOUs cannot pass along to ratepayers the cost of legal fees associated with pursuing rate increases.
  • PUC must protect ratepayers by adhering to a least cost principle for energy rates.

The bill does a couple of good things including forcing Xcel and the PUC to acknowledge how much energy policies will cost actual consumers rather than the nebulous “average ratepayer.” Also, it will prohibit Xcel from collecting costs of imposing regulations such as the “phantom carbon tax” that aren’t actual federal environmental regulations. We’ve written about the insidiousness of the carbon tax in detail here and here.

Prediction: Xcel, natural gas, House leadership, and new energy economy advocates will oppose HB 1121. Therefore, it won’t get out of the House Ag Committee, but we hope we are wrong.

HB12-1123 PUC Report to the General Assembly on Rate Case Hearings

House Sponsors: Kathleen Conti (R-HD 38), Jon Becker (R-HD 63), Paul Brown (R-HD 59), Brian DelGrosso (R-HD 51), Holbert, Carole Murray (R-HD 45), BJ Nikkel (R-HD 49), Robert Ramirez (R-HD 29), Scott, Ken Summers (R-HD 22), Swalm, and Libby Szabo (R-HD 27).

Senate Sponsors: None

This bill requires the Director of the PUC or his designee to report annually to the joint House and Senate transportation committee regarding public information on rate cases decided by the PUC during the previous two years. Also to be included in the report, the economic impact on ratepayers.

Prediction: It will pass the House because it has good support from Republicans including leadership with Rep Nikkel, House Majority Whip, as a co-sponsor. The Senate will be more interesting because the green-at-all-cost lobby enjoys a majority and doesn’t want anyone questioning the PUC about costs of the new energy economy. The debate will be transparency versus environmentalists. Leaning toward enviros but being an election year, anything could happen.

HB12-1172 Electric Rates in Connection with Greenhouse Gas Emissions

House Sponsors: Swalm and Conti

Senate Sponsors: None

This bill does two things. First, it prohibits the “phantom carbon tax” unless imposed at the federal level.

The enabling legislation passed in 2008 despite overwhelming Republicans opposition. Fast forward to 2011, the first time that Rep Swalm tried to repeal Colorado’s $20 per ton carbon tax, and some Republicans now embrace a carbon tax as we exposed when covering the vote on Swalm’s HB 1240.

Second, the bill prohibits an IOU from imposing tiered rates based on monthly consumption.

Tiered rates are anti-family and anti-consumer. With Xcel asking for an interim rate increase due to TOO MUCH energy and not enough demand, tiered rates are also hypocritical as I wrote several days ago.

Prediction: This bill is too pro-consumer, pro-ratepayer to pass. The HB 1365 lobby likes the carbon tax and Xcel Energy. Both will make sure it gets killed.

Several Final Points

After last year’s legislative session, we said that the unreported story of Colorado energy policy was that a few brave legislators had the courage to go on the offensive against anti-consumer energy policies. Judging from the bills above, this year will see more legislators joining the fight. We’ve written before that it is easy to get angry with special interest groups and Xcel Energy, but the responsibility really lies with elected officials and the PUC. It appears that some legislators have sensed the outrage and look to address problems we’ve been reporting for the last two years.

With his name on three of the five bills, Spencer Swalm emerges as the champion of Colorado ratepayers.  He stood up to leadership in his own party last year, and with more legislation this year Swalm proves he is willing to stand up again on behalf of ratepayers who have no voice in the new energy economy. Representatives Kathleen Conti and David Balmer get honorable mention.

What’s missing from the 2012 legislative session? A discussion over whether or not the PUC should be elected or appointed. Rep Conti introduced legislation last year that was killed in the House transportation commission. Based on how the PUC commissioners have politicized themselves by crafting legislation rather than sitting as objective regulators, it might be time for Colorado voters to determine the direction of the PUC.

Check back to the energy policy blog. We’ll keep track of these bills so you don’t have to.

Obama decision also a rebuke of Ritter admin

September 6, 2011 by Amy · Comments Off
Filed under: Archive, CDPHE, HB 1365, New Energy Economy 

President Barack Obama put a halt to the Environmental Protection Agency’s (EPA) proposed air-quality standards just before the Labor Day weekend.  The Wall Street Journal opined that the president cited the struggling economy as his main reason for not wanting to tighten ozone regulations at this time:

Come January 2010, the Obama EPA said it wanted to lower the ozone standard more, to between 0.060 and O.070 ppm. Problem is, this would have put 85% of monitored U.S. counties (628 out of 736) into “non-attainment” status. And the problem with that is that under current law, non-compliance effectively forces many utilities, businesses and agricultural operations in those counties to shelve expansion plans.

Translation: no new jobs.

WSJ called the president’s decision a “rebuke” of EPA Administrator Lisa Jackson:

whose decision to tighten the standard was based on an advisory-board recommendation that the Bush administration had rejected. In a statement, Ms. Jackson said the agency would “revisit the ozone standard,” but she pointedly stopped short of endorsing the president’s decision.

But the president’s decision is also be a rebuke of Governor Bill Ritter, Colorado lawmakers on both sides of the aisle, environmental special interest groups, the Colorado Department of Public Health and Environment, Xcel Energy,  Public Utilities Commission and  industry that all employed the EPA regulation scare tactic as a reason to pass HB 1365, the fuel switching bill, and HB 1291, the State Implementation Plan (SIP). And this isn’t the first time that the federal government has blown the justification that Colorado lawmakers used to ram through the disastrous energy legislation.

Energy policy analyst William Yeatman of the Competitive Enterprise Institute and contributor to this blog, pulled no punches in this exclusive interview on the Amy Oliver Show on News Talk 1310 KFKA. Yeatman says lawmakers got duped. Obama cites economic reality of the job killing regulations while Colorado lawmakers and the CDHPE cite the bogus excuse of “reasonably foreseeable” air-quality standards that never materialized. Other points from the Yeatman interview:

  • The PUC cited bogus deadlines due to “reasonably foreseeable” regulations and compressed the “accelerated Electric Resource Plan” from 18 to 30 months into 3 months.
  • Rush was also to ensure Ritter’s environmental legacy
  • The “big lie” was “obvious” and not the first for CDPHE
  • Xcel ratepayers are the big losers because they will pay $1 billion for an unnecessary energy plans.
  • Ritter won’t be hurt by any of this because he isn’t “encumbered by the truth.”

Basically Colorado lawmakers bought into these phony deadlines and threats of EPA usurping state authority, while Xcel ratepayers got stuck with bill. We’d like to say we enjoy the annoying chorus of “we told you so, we told you so!” But vindication is bittersweet because some of us are Xcel ratepayers.

Don’t Trust Studies Written by Wind Energy Lobbyists

April 8, 2011 by williamyeatman · Comments Off
Filed under: Archive, New Energy Economy 

Colorado is home to 5,000 wind energy jobs, according to a new, totally unbiased report from the American Wind Energy Association, this country’s premier wind energy lobby. Of course, the study is bogus. I wish I could tell you how the books were cooked. Unfortunately, I can’t read the report, because the AWEA put it behind a $125 pay wall. For now, you’ll have to trust me when I say that wind energy lobbyists are like all other shills; any report they produce will contain gross exaggerations. That’s what they’re paid to do.

Setting aside the AWEA’s bunk study, it is true that there are thousands of wind energy jobs in Colorado. Thanks to wind energy lobbyists, the General Assembly has enacted a spate of expensive energy policies, collectively known as the “New Energy Economy,” which force Coloradans to buy wind energy, among other things. It stands to reason that such policies—those that force Coloradans to use wind energy—would “create” jobs in the wind energy industry.

Is this a good thing? History suggests not. Otherwise, Communism would have worked, right? For a much more sophisticated explanation of the impossible economics of Soviet-style green energy production quotas, see this excellent Independence Institute guest oped by Ari Armstrong. For a technical discussion explaining how wind power is devalued by its intermittent, unreliable nature, check out this testimony, by former California Energy Commission Commissioner Tom Tanton, from a lawsuit being brought against the Colorado Renewable Electricity Standard (full disclosure: I am contributing to this lawsuit. See my testimony here).

Another red flag is the tenuousness of wind energy sector employment. Because the renewable energy industry is based on political support, it is faced with bankruptcy every time political winds change. And that happens a lot. Most recently, it happened last December, when AWEA’s top lobbyist warned that the industry would hemorrhage 55,000 jobs, unless the Congress extended a particularly generous subsidy.

It is also true markets predicated on government policies in lieu of supply and demand, such as the wind energy market, are prone to bottlenecks and oversupply. These defects lead to unfortunate outcomes, such as useless wind farms unconnected to the grid, and the sudden “furlough” of 500 Colorado wind energy jobs.

Let’s not forget the customer impact. The PUC has allowed Xcel to use a variety of budget tricks and accounting gimmicks to hide the true cost of renewable power, but there’s no hiding the increase in utility bills! Absent fuzzy math, wind energy is more expensive than conventional energy. Period.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute

Why Does the Office of Consumer Counsel Exist?

March 22, 2011 by williamyeatman · Comments Off
Filed under: Archive, New Energy Economy 

As I explain here, two thirds of the Public Utilities Commission care more about advancing “green” energy, than they do about ratepayer protection. I’m sad to say that the same holds true for the Office of Consumer Counsel. Evidently, in Colorado, ratepayers don’t have a public sector advocate.

By any rational calculation, Xcel’s Solar*Rewards program is bad for Colorado consumers. In 2011, the program budget, which is used to subsidize the installation of solar panels, is capped by law at 2 percent of the utility’s retail sales. Despite this cost cap, Xcel already this year has committed 4 percent of retail sales (about $97 million) to Solar*Rewards, so the program is projected to be about $50 million over budget. With this 4 percent of retail sales, Xcel will procure about .38 percent of electricity generation. In sum, the Solar*Rewards program is spending a lot of money, for only a little electricity.

Read more

Ratepayers Lose Big with PUC’s Solar Settlement

March 18, 2011 by williamyeatman · Comments Off
Filed under: Archive, New Energy Economy 

This afternoon the Public Utilities Commission approved a Settlement Agreement to end the Solar*Rewards imbroglio. The Settlement Parties were Xcel, the Office of Consumer Council, the Governor’s Energy Office, Western Resource Advocates, Colorado Solar Energy Industry Association, the Solar Alliance, and Public Utilities Commission Staff.

As I explain in detail here, the underlying cause of the Settlement was Xcel’s February 17 decision to suspend the Solar*Rewards program, which is a subsidy for the installation of photovoltaic solar panels. Xcel’s decision was well warranted: The program has been over budget every year since 2008 and has accrued a rolling deficit that is projected to be almost $100 million by the end of 2011, on which Xcel collects interest. To be sure, the utility wasn’t concerned about the impact of the program on its customers; rather, Xcel was worried about the possibility that the PUC would blame the cost overruns on poor management and order the utility to pay some of the $100 million shortfall with shareholder money, instead of Colorado ratepayer revenues.

Read more

Update on PUC Hearings for H.B. 1365: It’s Going To Be a Long Weekend for Xcel’s Top Brass

October 22, 2010 by williamyeatman · Comments Off
Filed under: Archive 

The Public Utilities Commission this week held deliberations on Xcel’s implementation plan to meet H.B. 1365 (”The Clean-Air Clean Jobs Act”), legislation that effectively mandates fuel switching of 900 megawatts of electricity generation from coal power to natural gas.

If you haven’t been following H.B. 1365, it’s a classic case of government picking and choosing winners and losers. In a nutshell, the Ritter Administration used the false threat of a pending federal regulatory crackdown to scare the legislature into supporting a bill that benefits the state’s natural gas industry at the expense of the coal industry. [N.B. The Governor's H.B. 1365 deceptions will be detailed in a forthcoming study by me and Amy Oliver Cooke.]

Here are the highlights from this week’s hearings:

  • On Thursday morning, the PUC refused to reconsider its September 29 decision excising from Xcel’s preferred implementation plan (“6.1E”)  all actions that would have occurred after a December 31, 2017 deadline set by H.B. 1365. The practical consequences of the PUC’s September 29 determination was to exclude from Xcel’s plan 2022 fuel switch at the 350 MW Cherokee power plant outside of Denver. According to the PUC Commissioner Matt Barker, “what had been the preferred plan, is no longer on the table.”

**Side note: The PUC’s reaffirmation of its September 29 decision deflated the deliberations. Without a plan in discuss, there wasn’t much subject material for a hearing.

  • Also yesterday, PUC Chairman Ron Binz and Commissioner Matt Baker refused to recuse themselves in the wake of Colorado Mining Association’s revelation last  week that Binz and Baker participated in negotiations to draft H.B. 1365. The CMA argued that the commissioners’ participation in the formulation of H.B. 1365 has, “at the very least, the appearance of impropriety, and, at the worst, serious bias,” and therefore violates the Colorado Code of Judicial Conduct. For this reason, the CMA filed a motion to have Commissioners Binz and Baker disqualify themselves. Commissioners Binz and Baker refused. Chairman Binz said that the allegations are the result of “misunderstandings” and “misrepresentations” of “unguarded emails.”
  • Xcel’s VP for Regulatory Affairs Karen Hyde conceded that she, too, was a party to H.B. 1365 negotiations.

**Side note—Bullet point 1 coexists uneasily with bullet points 2 and 3. In light of the fact that the PUC, Xcel, natural gas producers, and the Colorado Department of Public Health and Environment were all party to negotiations that created H.B 1365, and, furthermore, that CDPHE also consulted Xcel as it formulated its implementation plan, it is mind-boggling that Xcel bungled its preferred plan.

  • Ms. Hyde indicated that Xcel will roll out its new strategy on Monday. She intimated that there are “easy fixes” for 6.1E, but she also said that Xcel may find an alternative plan “infeasible.” According to Xcel’s counsel, the utility has yet to make a decision, which means that this is going to be a very busy weekend for Xcel’s top brass.
  • She also stated that a 4% to 6% rate impact is “reasonable” for a potential alternative plan. For perspective, 6% is about 4 times the estimated rate impact of Xcel’s preferred plan.

**Side note—If Xcel were to decide that an alternative H.B. 1365 plan is infeasible, then all hell would break out. That said, Xcel has every incentive to file an alternative. Although it might not be as lucrative as its preferred plan (which would have generated a $130 million profit), the utility is entitled to a 10.5% return on all “construction” costs, and it’s impossible to switch fuels without a lot of construction.

  • So far, today’s hearing has been dominated by jockeying between Xcel’s lawyers, and those of parties that oppose H.B. 1365’s plan (like Peabody coal and the Colorado Mining Association), over the rules that will dictate cross examinations of Xcel witnesses after Monday’s plan is released.
  • The big news today is that the PUC will make a determination on Xcel’s new H.B. 1365 preferred plan (assuming Xcel submits one on Monday) next Wednesday.

I’ll be watching all Monday, so stay tuned for updates.

William Yeatman is assistant director of the Center for Energy and Environment at the Competitive Enterprise Institute.

How Colorado Governor Bill Ritter’s New Energy Economy Is Like the Bowl Championship Series

October 18, 2010 by williamyeatman · Comments Off
Filed under: Archive 

On GQ’s blog, there’s an interesting interview with two acclaimed sports writers, about the Bowl Championship Series. As millions of Americans know well, the BCS is the complicated system that chooses a national champion in the billion dollar college football industry. There are more than 100 schools vying for the crystal football awarded to the BCS champion, so it’s not surprising that every year, more than 100 schools are dissatisfied with a system didn’t crown them #1. That is, the BCS is universally reviled.

So we all know and hate the BCS, yet even college football enthusiasts like me don’t know how it works. Somewhat paradoxically, this might be the very reason it persists, according to these two sports reporters,

GQ: What was the thing your reporting that surprised you the most or caught you off guard?

2 Sports Reporters: How little even the people in college sports know how this [BCS] works. It’s less of a conspiracy as much as it’s people just too uninterested or incapable of figuring out what the real deal is.

No one likes the BCS, but it fumbles on, because it’s too arcane to be bothered with. I think this dynamic is represented well by Kaiser Soce’s famous admission in the Usual Suspects that the devil’s best trick is to make people think he doesn’t exist.

Something very similar is going on with Colorado Governor Bill Ritter’s New Energy Economy.” Coloradans don’t like energy taxes—especially ones they didn’t vote for—but they can’t be unhappy when they are oblivious. After all, ignorance is bliss. Undoubtedly, Ritter’s energy policies will make energy more expensive (see here and here and here), yet it is achieved primarily through the impossibly convoluted procedures of the regulatory state with which virtually no one is familiar. As a result, Ritter’s anti-energy policies proceed apace.

Here’s an ultra-brief rundown of just a few of Ritter’s most insidious energy policies

  • In 2007-2008, the Public Utilities Commission (PUC) changed the rules so that its lodestar changed from lowest-cost electricity to protecting the climate
  • The PUC interpreted the legislature’s 2% rate cap for 2010 HB 1001, a renewable energy production quota, to mean “incremental” costs instead of “total” costs; as such, the rate cap became a sham
  • The PUC allows Xcel to incorporate a $20 per ton carbon tax into its resource acquisition models;