I travelled to Denver twice in the last 7 days to testify before the Senate State Affairs Committee on HB 1291, Colorado’s State Implementation Plan to meet the Regional Haze provision of the federal Clean Air Act.
I told the Committee that HB 1291 is illegal. And I rebutted the distortions peddled by its proponents, who also testified. Illegality and disingenuousness are huge accusations, and I made them twice, in testimonies a week apart, so the bill’s proponents had time to conjure a response. But no one disputed my assertions. Because they were true.
Nonetheless, the Plan passed out of Committee, due to the fact that it enjoys the support of two of Colorado’s richest special interests, for which billions of dollars were at stake. Today, HB 1291 was enacted by the full Senate, by a 25-10 vote. Two weeks ago, by a 58-7 vote, it was passed by the House of Representatives. If there’s one thing a bipartisan, bicameral majority can agree on these days, it’s the importance of currying favor with the deepest pockets.
This is a long blog about the who, what, why, and when of Colorado’s Regional Haze State Implementation Plan, the most outrageous rip-off you’ve never heard of.
The Back Story
Colorado’s Regional Haze State Implementation Plan originated not in the Centennial State, but in Oklahoma. It owes its form to Aubrey McClendon, CEO of Chesapeake Energy, a natural gas company headquartered in Oklahoma City.
Same story. Different day.
Yesterday in Senate State Affairs, democrats Rollie Heath, Bob Bacon and Betty Boyd voted with Xcel Energy and killed two pro-consumer pieces of legislation. Republican members Bill Cadman and Kevin Grantham sided with ratepayers.
Most interesting, Senator Lois Tochtrop (D-Adams County) couldn’t get any support from her own party for SB 236 despite support from an impressive coalition that included business, labor and consumers. Tochtrop looked to save ratepayers nearly $200 million dollars by replacing Xcel’s preferred State Implementation Plan (SIP) for regional haze with Xcel’s original preferred and less costly plan. Xcel opposed, and lawmakers obliged.
Senator Kevin Lundberg’s (R-Berthoud) bill, SB 237, would have prevented Xcel from illegally including two Western Slope coal-fired plants from inclusion in the SIP, which would have saved ratepayers between $100 million and $140 million.
Appeals to the legality of Xcel’s preferred plan (HB 1291), to the cost effectiveness of the plan, and to how much the plan will burden ratepayers fell on Heath’s, Boyd’s and Bacon’s deaf ears. And Senator Boyd feigned offense to citizen Carol Kirkstadt’s testimony that questioned why lawmakers don’t seek the truth when contradictory statements are presented into evidence. Kirkstadt queried lawmakers’ ability to comprehend such a complex subject without asking any questions, and she predicted that the committee would defeat SB 236. Boyd may have been offended, but Kirkstadt was right. Xcel opposed, and lawmakers obliged.
Check out how my energy colleague William Yeatman destroyed Xcel’s and the Air Quality Control Commission’s arguments.
The energy company’s preferred plan, HB 1291, is flying through the General Assembly. It quickly passed the House and is awaiting second reading in the Senate. By the time you read this, HB 1291 may be on its way to the Governor’s desk.
As we’ve written before, whatever Xcel wants, Xcel gets.
As I explained in a companion post, HB 1291, legislation that approves the Air Quality Control Commission’s Regional Haze State Implementation Plan, is an illegal rip-off. Thankfully, there’s a remedy: Senator Kevin Lundberg’s S. 237, would strip HB 1291 of its most cost-ineffective provisions, and thereby save ratepayers at least $100 million in unnecessary costs.
I harbor no illusions about the likely winner when principles (as embodied by S. 237) clash with deep-pocketed special interests (as embodied by HB 1291). Nonetheless, I thought Sen. Lundberg’s legislation would at least get a fair shake. As such, I am genuinely shocked at the lengths to which the forces that stand to gain from HB 1291 have gone to ensure that S. 237 gets swept under the rug.
On Monday, the Senate referred HB 1291 and S 237 to the State Affairs Committee, and a hearing on both bills was scheduled for Monday, April 25. Despite the fact that HB 1291 enjoyed the support of Colorado’s most influential special interests (gas and Excel) and was therefore almost assuredly going to pass by a wide margin, its proponents decided to leave nothing to chance. On Tuesday, the State, Veterans, and Military Affairs Committee moved the hearing on HB 1291 up to April 19, but it left consideration of S. 237 on April 25.
Here’s why this is outrageous: It ensures the Senate cannot even consider opposition to HB 1291! If the Senate approves the Regional Haze State Implementation Plan by enacting HB 1291 on April 19, then there is no reason to consider changes to that Plan (i.e., S. 237) a week later.
This is indefensible. It’s one thing to kowtow to big money. It’s another thing entirely to silence opposing viewpoints with a procedural sleight of hand.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute
What is HB 1291?
On Monday, by a 58-7 vote, the Colorado House of Representatives passed HB 1291, legislation that approves the Air Quality Control Commission’s Regional Haze State Implementation Plan. HB 1291 comes before the Senate State Affairs Committee next Tuesday, April 19.
What is a Regional Haze State Implementation Plan?
In the 1977 Clean Air Act Amendments, Congress created a regulatory program, known as “Regional Haze,” to improve visibility at national parks and wilderness areas. Due to the high uncertainty of visibility science, however, the EPA didn’t have the technical understanding necessary to enforce the Regional Haze provision. In 1980, EPA deferred promulgating Regional Haze regulations until the science improved.
Ten years later, the Congress appropriated funds for a scientific study of visibility that could be used to create Regional Haze regulations. The resultant study provided sufficient scientific grounding for the EPA to promulgate substantive regional haze regulations, in 1999.
As is always the case whenever the federal government issues a new regulation, affected interests immediately litigated. Due to the ensuing delay, it wasn’t until December 2007 that states were required to submit to the EPA a strategy to reduce emissions that impair visibility in order to comply with regional Haze. Such a strategy is known as a Regional Haze State Implementation Plan.
However, only a couple states bothered to submit a Regional Haze State Implementation Plan by the December 2007 deadline. On January 9, 2009, the EPA made a finding of failure to submit all or a portion of their regional haze State Implementation Plans (SIPs) for 37 states. This notice started a two-year countdown to a new deadline for regional haze state implementation plan submissions. January 9, 2011 was the second deadline. As was the case with the previous deadline, most states failed to meet it, although all Regional Haze State Implementation Plans are expected to be submitted to the EPA this spring.
Key facts about Regional Haze:
- It’s an aesthetic regulation—NOT a public health regulation
- States have an unusually large discretion under Regional Haze compared to other Clean Air Act Provisions
Why Did the House Move So Fast on HB 1291?
From wire to wire, HB 1291 was introduced and enacted in 13 days, with virtually no serious debate. The absence of substantive deliberations is notable, in light of the fact that billions of dollars were at stake, and, moreover, that the legislation likely violates existing Colorado statute (more on that later).
I’ve written before about the Air Quality Control Commission’s outrageous Regional Haze Implementation Plan. In particular, I objected to the plan’s treatment of two small coal fired power plants near Steamboat Springs, Hayden 1 and Hayden 2, because it mandates controls that are at least $100 million more expensive than what is required by the Environmental Protection Agency.
(For a Regional Haze primer, click here. In a nutshell, Regional Haze is unique among the provisions of the Clean Air Act for two reasons: (1) It is an aesthetic regulation meant to improve visibility at national parks, whereas other Clean Air Act provisions are meant to protect public health; and (2) it affords states—and not the EPA—primary authority, especially for power plants smaller than 750 megawatts.)
Back then, when I wrote those posts, I thought that the AQCC’s Hayden controls were egregious; however, I’ve since learned that they are almost certainly illegal. Under Colorado law (§25-7-105.1(1) C.R.S.), a State Implementation Plan cannot impose emissions controls that are more stringent than what the EPA requires. For Hayden 1 and Hayden 2, the AQCC mandated nitrogen oxides controls, known as Selective Catalytic Reduction. But in its Regional Haze guidance document, the EPA states, “We have not determined that Selective Catalytic Reduction is generally cost-effective” for smaller power plants (less than 750 megawatts capacity) like Hayden 1 and Hayden 2. (This quote is in the first paragraph of the first column of page 39136 of the link.)
To recap: (1) Colorado law forbids emissions controls more stringent than what the EPA requires; (2) the Regional Haze State Implementation Plan mandates ultra-expensive Selective Catalytic Reduction for Hayden 1 and 2 power plants; (3) the EPA says that Selective Catalytic Reduction controls are not cost effective for small power plants like Hayden 1 and 2; (4) therefore, the Regional Haze State Implementation Plan is likely in violation of Colorado statute.
The AQCC submitted this (likely illegal) Regional Haze State Implementation Plan in mid-January. Colorado statute allows lawmakers to request a review of any revision to the State Implementation Plan by the bi-cameral, bi-partisan Legislative Council. On February 11 Reps. Jim Kerr and Marsha Looper made such a request; on February 14, they were joined by Sens. Scott Renfroe, Kevin Lundberg, Shawn Mitchell, Keith King, Jean White, Ted Harvey, Mark Scheffel, and Kent Lambert. All Coloradans owe thanks to these legislators.
Last Friday, the Legislative Council held a hearing on the AQCC’s Regional Haze State Implementation Plan. The Council allowed lawmakers until April 4 to submit legislation to revise the Plan; if no such legislation is put forward, the Plan will be sent to the Environmental Protection Agency for final approval. The clock is ticking for a lawmaker to bring the Regional Haze State Implementation Plan in line with Colorado law, by forbidding ultra-expensive controls at Hayden 1 and 2. Otherwise, Xcel ratepayers will be on the hook for at least $100 million in unnecessary costs.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.
Filed under: Archive, CDPHE, HB 1365, New Energy Economy
The Politics Colorado Blog today reports great news:
“Tuesday, Senate Republicans sent a letter to Senate President Shaffer asking Legislative Council to hold a public hearing to review the changes made to the State Implementation Plan (SIP) for implementing regulations for “regional haze”…
…”We think it’s important that Legislative Council hold a public hearing on this effort to give the General Assembly and public more time to consider the impact this plan will have on Colorado,” said Senator Scott Renfroe, R-Greeley.
“Serious questions and concerns have risen about the timing of the information and the data used in the plan,” concluded Renfroe.
As readers of this blog know well, I’ve long railed against the CDPHE’s manipulations of the regional haze rule. In short, the Department has used this regulation to push an anti-coal agenda.
On January 15, the Colorado Department of Public Health and Environment (CDPHE) submitted to the General Assembly a State Implementation Plan (SIP) to comply with the Regional Haze provision of the Clean Air Act. The General Assembly must approve the SIP before it can be sent to the Environmental Protection Agency (EPA) for final review. The CDPHE will seek a rubber stamp, but the General Assembly must reject the proposed SIP, because costs far exceed benefits.
Opposition to the Regional Haze SIP is merited by the CDPHE’s treatment of Hayden Units 1 and 2 in Northwest Colorado. The SIP calls for almost than $140 million in nitrogen oxides (NOx) controls known as Selective Catalytic Reduction (SCR). Here’s why this is a bad deal for Coloradans:
- Costs exceed benefits by a 40:1 ratio
Regional haze is an aesthetic regulation. That is, it has nothing to do with health, and is meant only to improve visibility at national parks. In 2006, EPA Region 8 made a “ballpark” estimate that the value to Colorado residents of reducing a ton of NOx in order to comply with Regional Haze is $95. The CDPHE is mandating pollution controls that cost $3,385/ton NOx reduced at Hayden 1, and $4,064/ton NOx reduced at Hayden
- Even the EPA concedes that SCR is not cost effective
In the Regional Haze guidance document, the EPA stated, “we have not determined that SCR is generally cost-effective.”
- Neighboring states determined that SCR is not cost-effective
In Utah, the Department of Environmental Quality deemed that SCR was too costly, and instead proposed low NOx burners in its Regional Haze SIP. This technology is 95% less expensive than SCR.
- Evidence Suggests the CDPHE grossly overestimated visibility benefits
During the CDPHE deliberations on the Regional Haze SIP, Joseph S Scire, an environmental consultant, testified that the CDPHE’s overly simplistic visibility model “significantly overestimated…the predicted visibility benefits associated with SCR controls.” Such an overestimation would mean that the CDPHE’s preferred pollution controls are even less cost-effective.