Rising Energy Prices Lead to the Highest Inflation Rate in 18 Months

June 24, 2014 by michael · Comments Off
Filed under: New Energy Economy, preferred energy 

By Henry Zhang

On June 17th, the Bureau of Labor Statistics (BLS) released its monthly consumer price index report. This included statistics regarding consumer prices in May 2014 and year-to-year inflation. Of note is that in the Western Region[1], from May 2013 to May 2014, electricity prices rose 2.8 percent and total energy prices rose by 3.1 percent.[2] Compare those figures to 2.3 percent increase in average consumer prices over the same time period. In fact, according to the Denver Business Journal, the year-to-year price gain in energy was tied with medical care for the largest price gain of any major category used to calculate inflation.[3]

(Here is a screenshot of the relevant BLS Western Region data. Energy prices are boxed in red)

Untitled1

Also from the Denver Business Journal article:

“The monthly increase [in the West] was largely influenced by higher prices for electricity,” BLS said. “Overall, energy costs advanced 4.6 percent over the month.”

Ten of the 13 states that comprise the BLS’ Western Region have some sort of renewable portfolio mandate over the next 15 years. This means that the state must generate a certain proportion of its electricity from renewable sources.[4] For states like Colorado that have been endowed with plentiful coal reserves, this requires replacing electricity from coal, which is relatively inexpensive, with electricity from wind and solar, which is relatively expensive. This, in turn, leads to higher electricity prices, which hurt businesses and consumers alike and can “inflict significant harm on the state economy.” [5]

On a national level, where 37 out of the 50 states have enacted renewable portfolio standards or goals, consumer prices rose 2.1 percent from May 2013 to May 2014 while electricity prices rose 3.6 percent and total energy prices rose 3.3 percent. For the US, like for the Western Region, energy prices experienced the largest percentage increase of all of the major consumption categories used to calculate inflation.

From 2004, when Colorado’s Renewable Portfolio Standard (RPS) was passed, to 2012, the latest year for which data is available, the average retail price of electricity for all sectors increased from 6.95 cents per kilowatt-hour (kWh) to 9.39 cents per kWh, a 35 percent increase.[6] This is equivalent to a 3.76 percent average annual increase. For residential consumers of electricity, the retail price rose from 8.42 cents per kWh in 2004 to 11.46 cents per kWh in 2012. This is a 36 percent increase, equivalent to an average annual increase of 3.85 percent. In the eight years after the RPS was passed, both figures for the annual growth rate in the price of electricity are greater than the average rate of inflation.

For comparison purposes, in the eight years leading up to 2004 (1996-2004), average retail electricity prices only rose 15 percent, from 6.05 cents per kWh to 6.95 cents per kWh. This is an annualized growth rate of 1.73 percent. What more, for residential consumers, the annualized growth rate from 1996 to 2004 was just 1.46 percent. Thus, in the eight years before the RPS was passed, both figures for the annual growth rate in the price of electricity are less than the average rate of inflation. For a typical Colorado household,[7] which spends around $1065 per year on electricity,[8] the difference between an annual 3.85 percent rate increase and an annual 1.46 percent rate increase is an extra $270, per household, spent just on electricity over the course of 10 years. Furthermore, this number is much lower than the true cost of the RPS to Colorado households. It doesn’t take into account the billions of taxpayer dollars that have gone to the energy sources, like wind and solar, which contribute to the rapid rise in electricity prices.

Affordable energy and electricity prices are the bedrock of a strong, healthy economy. Increases in the price of electricity that outpace inflation and real income growth squeeze the spending power of all consumers. Ordinary people like you and me need affordable, dependable electricity for a myriad of purposes that enhance our standard of living. Businesses need a steady electricity supply to produce the goods and services that we consume. A justification of the cost of rapidly increasing electricity prices would require more than the rhetoric of environmental benefits. It would require clear evidence, from detailed, rigorous analyses, that the added value of environmental benefits exceeds the lost jobs and economic malaise caused by higher electricity prices.

Henry Zhang is a Future Leaders summer intern. He is a rising sophomore at Swarthmore College in Pennsylvania, majoring in mathematics and economics.


[1] The Western region consists of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming (link)

[2] BLS West Report (link)

[3] Mark Harden, Denver Business Journal. “Biggest annual price gain since 2012 in Colorado, the West” (link)

[4] Database of State Incentives for Renewable Energy (DSIRE) map (link)

[5] Heartland Institute study on Colorado’s RPS (link)

[6] Data from Energy Information Administration (EIA) (link)

[7] US Census Bureau: Colorado Quick Facts (link)

[8] 775 kWh/month * 12 months/year * 11.46 cents/kWh * (1.0385/1.0146)10 = $1325, which is $270 greater than $1065

Sputtering Wind Energy Prompts Transmission Cost Concerns from Xcel

May 28, 2014 by michael · Comments Off
Filed under: preferred energy, renewable energy, wind energy 

Growing transmission costs for wind-generated electricity have prompted Xcel Energy to seek approval for rate hikes to smaller utilities using Xcel’s transmission lines to reach their consumers:

Xcel wants the utilities to pay for its costs associated with having supplies of reserve power ready to go in case the wind suddenly dies, said Terri Eaton, Xcel’s director of federal regulatory and compliance efforts.

Currently, those costs are paid by Xcel’s business and residential customers, Eaton said.

If the transmission lines customers can supply their own back-up power supplies, they wouldn’t be charged under the proposed rates, she said.

Readily available, back-up power supplies are critical to keep the transmission grid in balance and avoid blackouts that can occur when a big source of power suddenly disappears, Eaton said.

Xcel’s hikes would hit rural cooperatives and other utilities should the Federal Energy Regulatory Commission approve the rate hike at the beginning of 2015.

But what, exactly, does Eaton mean when she refers to “reserve power ready to go in case the wind suddenly dies”?

“We’ve seen some dramatic wind fall-offs in really short periods of time,” Eaton said.

Xcel has already experienced such falls offs, when “several hundreds of megawatts of wind” drops dramatically — and swiftly — due to changes in the wind, she said.

“Sometimes the wind is just howling, and an hour later the wind has calmed — and it’s in those circumstances that we need to have reserves available to pick up the load,” Eaton said.

In such cases, backup power supplies typically come from natural gas-fueled power plants, she said.

The tariff proposed by Xcel would help cover the costs when the wind “suddenly dies.”

The intermittency of wind has been widely discussed, and no amount of forecasting or improved efficiency will spin a wind turbine’s blades if the wind isn’t blowing.

In 2012, a study examined wind generation in Illinois at the height of a summer heat wave, when energy demands rise to yearly highs. The author found that just 5 percent of installed wind capacity was available during that outbreak of record temperatures, and at times, “virtually nonexistent.”

Earlier this year, wind energy proponents touted the example provided in Texas–wind had saved the day. But a closer examination of the figures from the Electric Reliability Council of Texas (ERCOT) demonstrated that contrary to claims that wind had bailed out conventional sources of electricity by ensuring grid reliability, wind had actually fallen so substantially that Texas turned to other sources to meet the extra 1,000 megawatts of demand on January 6. Both scheduled and unscheduled plant closure elsewhere had left Texas with a gap during a record cold snap, a gap that wind was unable to fill.

As the Institute for Energy Research wrote in January, only 3.2 percent of the energy needs of the Texas grid operated by ERCOT came from wind, while 83 percent of Texas wind turbines “were unavailable during peak demand.”

ERCOT itself continues to rate its “wind power at 8.7 percent of its installed capacity” for 2014 during the periods of highest demands, which typically occur in mid-to-late summer. For nearly 12,000 megawatts of installed wind capacity, only 990 megawatts are considered reliable for forecasts computed by ERCOT for 2014. That’s like having the equivalent of 12 1,000 megawatt power plants built and only 1 online when summer energy demand spikes.

As a percentage, ERCOT figures wind to provide just 1.3 percent of the total amount of energy it needs this summer, rising to 2.2 percent by 2017 according to its own projections.

As for Colorado, under Senate Bill 252, rural cooperatives must reach 20 percent renewable energy by 2020.

Tri-State Generation and Transmission Association spokesman Lee Boughey acknowledged the rising costs of integrating ever-greater amounts of intermittent energy supplies like wind.

“As more intermittent resources are added in the region, we understand the need to address the higher costs of integrating and balancing power,” Boughey told the Denver Business Journal.

Those costs were highlighted in a March post that examined the integration of wind and other intermittent energy sources to the reliability of the grid operated by Public Service and regulated by the Public Utilities Commission (PUC), under the state’s preferred energy mandate:

The concern over infrastructure costs and the cost to ratepayers, as well as the challenge of incorporating ever-larger amounts of intermittent generation sources like solar and wind, is not a new topic at the PUC.

In June 2012 comments by PUC staff engineer Inez Dominguez indicated that off-peak load and wind generation in particular was “alarming.”

The integration of intermittent sources like wind would overwhelm the system, either with higher costs or decreased reliability. Bringing in wind and curtailing conventional, coal-fired generation during off-peak periods would result “in an economic penalty to the Public Service customers because more expensive wind generation would be supplying their load.”

Cutting off the wind, however, would also penalize ratepayers, as the “take or pay” agreements give wind first priority.

But the Public Service engineer also highlighted reliability concerns. “In its simplest terms as it concerns the customers, reliability deals with keeping the lights on. This reliability issue may occur when the wind suddenly stops blowing and a significant amount of wind generation is lost to the balancing authority,” Dominguez said.

“When this event happens, the balancing authority needs to replace the lost generation quickly enough to keep from tripping off the load. This means that the generation in reserve to cover such an event has to be quick enough in its response to cover the lost generation,” Dominguez continued.

For Colorado ratepayers, this backup generation comes from “gas fired combustion turbine generation reserves” that displace “more economic base load coal fired generation,” only adding to the cost, and “complexity” of the load balancing requirements.

According to Dominguez, these examples suggested a “flag that Public Service may have too much wind generation.”

Solar “Mega-trap” Kills Birds at California Power Plant

May 5, 2014 by michael · Comments Off
Filed under: renewable energy, solar energy 

Solar power generating facilities in Southern California have been dubbed “mega-traps” for their ability to attract and kill multiple species in a variety of manners including solar flux injury, also known as “singeing,” according to a report from the National Fish and Wildlife Forensics Laboratory issued in April.

“At times birds flew into the solar flux and ignited,” the authors wrote.

The toll on Southern California wildlife from three solar power plants is just beginning to be revealed:

The Ivanpah solar thermal power plant in the Southern California desert supplies enough carbon-free electricity to power 140,000 homes. For birds, bats and butterflies, though, the futuristic project is the Death Star, incinerating anything that flies through a “solar flux” field that generates temperatures of 800 degree Fahrenheit when 300,000 mirrors focus the sun on a water-filled boilers that sit on top three 459-foot towers.

“It appears Ivanpah may act as a ‘mega-trap,’ attracting insects which in turn attract insect-eating birds, which are incapacitated by solar-flux injury, thus attracting predators and creating an entire food chain vulnerable to injury and death,” concluded scientists with the National Fish and Wildlife Forensics Laboratory in a report that investigated 233 bird deaths representing 71 species at three Southern California solar power plants.

“Ivanpah employees called such immolations ’streamers,’” said The Atlantic.

US Fish and Wildlife Service Office of Law Enforcement staff “observed an average of one streamer event every two minutes.”

singeing small

From the report:

When OLE staff visited Ivanpah, we observed many streamer events. It is claimed that these events represent the combustion of loose debris or insects. Although some of the events are likely that, there were instances where the amount of smoke produced by the ignition could only be explained by a large flammable biomass such as a bird. Indeed OLE observed birds entering the solar flux and igniting, consequently becoming a streamer.

When the Ivanpah solar plant was inaugurated in earlier this year, we noted about reports of birds being killed–the “singeing” of birds in the air due to the reflective panels heating the surrounding air to such high temperatures near the California plant’s towers.

At the time, we wrote:

All power sources involve tradeoffs, but to date, wind and solar have generally avoided discussing the topic, often quickly shifting to pointing out the costs of other energy sources in defending their own environmental impacts.

Those tradeoffs included the very distinct possibility of harm to migratory birds and other wildlife.

According to the April report bats–also attracted by the insects drawn to the solar arrays–have also been found near the facilities. These include species deemed “sensitive” in California by the Bureau of Land Management.

Regulatory agencies considered those costs for Ivanpah:

Ivanpah can be seen as a success story and a cautionary tale, highlighting the inevitable trade-offs between the need for cleaner power and the loss of fragile, open land. The California Energy Commission concluded that while the solar plant would impose “significant impacts on the environment … the benefits the project would provide override those impacts.”

Those full impacts won’t even be known for another couple years, as a two-year study is completed on Ivanpah’s effect on wildlife.

The report also notes that gathering specific data about the actual temperatures involved at Ivanpah have been difficult.

“Despite repeated requests, we have been unsuccessful in obtaining technical data relating to the temperature associated with solar flux at the Ivanpah facility,” the authors wrote.

The report authors quoted a Discovery TV channel program that pegged the possible top temperature at the top of the solar tower above 3,600 degrees Fahrenheit, enough to melt steel. In order to regulate the tower at a much lower temperature, Ivanpah’s operators must turn only a percentage of heliostats at the solar receiver.

They estimated that temperatures across the solar field ranged from 200 to 900 degrees Fahrenheit.

The solar facility at Ivanpah is a darling of the Obama administration and received $1.6 billion in loan guarantees.

“This project speaks for itself. Just look at the 170,000 shining heliostat mirrors and the three towers that would dwarf the Statue of Liberty,” said Ernest Moniz, Obam’s energy secretary, as reported by The Daily Caller.

Coloradans can’t rely on subsidy-dependent wind energy

February 17, 2014 by michael · Comments Off
Filed under: renewable energy, wind energy 

This op-ed first appeared in the Greeley Tribune

Coloradans can’t rely on subsidy-dependent wind energy


By Michael Sandoval

When Coloradans flip on their lights or crank up their heat, they expect their electricity to be affordable, and at the very least, reliable. But the state Legislature and Gov. John Hickenlooper are forcing the opposite on Colorado — expensive and unreliable wind energy.

The wind lobby today is one of the fattest hogs at the corporate welfare trough. Rather than win customers through good prices and reliable products, the wind lobby uses political clout to force consumers to purchase its overpriced services. Currently, a state law requires that 12 percent of the state’s electricity be generated by so-called “green” energy. That mandate increases to 20 percent next year, and will jump to 30 percent by 2020 for investor-owned utilities. Senate Bill 252, signed by the governor last year, imposes a 20 percent mandate on rural cooperative electric associations. These jumps will only increase the cost of electricity.

icon_op_edThe wind industry is “green” in the sense that it lines its pockets with taxpayer subsidies. The federal $12 billion wind production tax credit was increased to 2.3 cents per kilowatt-hour in 2013. Although Congress decided not to renew this particular form of corporate welfare, the Obama administration has decided to keep the welfare money flowing anyway. The Internal Revenue Service issued guidance that allowed projects under construction and generating electricity by Jan. 1, 2016, to also claim the tax credit, which lasts for 10 years.

How dependent is the wind industry on government subsidies? American Wind Energy Association CEO Tom Kiernan pointed to the steep declines in wind capacity installations when the production tax credit is allowed to lapse, as it was briefly at the end of 2012. Last year, total available wind energy output decreased 92 percent.

In other words, almost all the wind power construction today exists only because of taxpayer subsidies. Because the wind lobby has become addicted to corporate welfare, the wind welfare companies have failed to make the technological advances, which make wind power competitive in a free market. It’s easier to lobby Washington to get money extracted from the taxpayers, and to lobby Denver to force consumers to buy your product.

Besides being expensive, wind power is unreliable, as demonstrated by a near-record demand in Texas for home heating in early January, which put a strain on that state’s power grid. The Electric Reliability Council of Texas noted that planned maintenance and unexpected weather-related outages of power plants elsewhere nearly brought on rotating outages.

Proponents declared triumphantly that wind had saved the Texas grid. But in reality, wind had failed.

Put simply, wind energy was unable to fill the gap created by a sudden increase in demand from the cold and the drop in capacity due to the scheduled and unscheduled outages that occurred the morning of Jan. 6. Just as the state experienced a spike in overall energy demand, wind power began to plummet, according to analysis of the council’s data by the Independence Institute.

That morning, wind output fell below 20 percent of maximum capacity by 7 a.m., just as the other power plants went offline. As a percentage of council’s total output, wind fell to below 10 percent and remained there until 11 p.m.

The Institute for Energy Research confirmed that a mere 3.2 percent of the energy supplied to the Texas grid covered by council came from wind. At the moment Texas residents needed reliable power the most, 83 percent of Texas’ wind turbines were unavailable “during peak demand.”

The only thing that saved Texas that day was importing nearly 1,000 megawatts from the eastern power grid and Mexico.

The Comanche Peak 1 nuclear plant fell to 72 percent of capacity on Jan 6. Meanwhile, actual wind output in Texas failed to reach 70 percent during any one hour, and remained below 50 percent in at least 20 of the 24 hours that day.

So when the winter chill hit Texas residents, wind power nearly left them out in the cold. Coloradans would be wise to not endanger their safety in their homes, and their pocketbooks, by forced reliance on an intermittent, subsidy-dependent power source.

Michael Sandoval is an energy policy analyst for the Independence Institute, a free market think tank in Denver.

Fried Birds: Green Energy Involves Tradeoffs Too

February 17, 2014 by michael · Comments Off
Filed under: renewable energy, solar energy 

The Ivanpah solar plant went online last week, but the cost to wildlife–particularly birds–won’t be known for at least two more years.

Reports that the giant solar thermal array featuring more than 300,000 reflective panels and steam-driven turbine towers have been “killing and singeing” birds by heating the air to around 1,000 degrees Fahrenheit near the towers, according to reports.

You can view pictures of the deceased birds here.

All power sources involve tradeoffs, but to date, wind and solar have generally avoided discussing the topic, often quickly shifting to pointing out the costs of other energy sources in defending their own environmental impacts.

Policy directives aimed to support the technologies often override such environmental concerns, as they did with Ivanpah:

Ivanpah can be seen as a success story and a cautionary tale, highlighting the inevitable trade-offs between the need for cleaner power and the loss of fragile, open land. The California Energy Commission concluded that while the solar plant would impose “significant impacts on the environment … the benefits the project would provide override those impacts.”

The plant’s effects on birds is the subject of a current two-year study.

But the cost of electricity from solar sources is and will remain higher than other natural resources, like coal, for the foreseeable future, according to the Energy Information Administration:

The Energy Information Administration says that it will cost new solar thermal plants 161 percent more to generate one megawatt hour of power than it costs a coal plant to do in 2018 — despite the costs of solar power being driven downward.

On average, conventional coal plants cost $100 to make one megawatt hour, while solar thermal plants cost $261 for the same amount of power. This data, however, does not take into account the impact of federal, state or local subsidies and mandates on power costs.

The solar thermal installation built by BrightSource Energy received at $1.6 billion loan guarantee from the Department of Energy in 2011. That loan was secured in no small part due to political connections, according to The Heritage Foundation.

Higher electricity costs as a result of policy directives and crony capitalism, something the Solar Energy Industries Association was readily willing to admit:

Resch said a key issue for the industry will be maintaining government policies that encourage development, including tax credits for solar projects that are set to expire in 2016 and government loan guarantees. “The direct result of these policies is projects like Ivanpah,” he said.

Once again, however, the claim that solar energy is a “free” or “no cost” energy source has been upended. Another BrightSource project is receiving similar concerns:

In response to BrightSource’s blueprint for its second big solar farm in Riverside County, near Joshua Tree National Park, biologists working for the U.S. Fish and Wildlife Service told state regulators that they were concerned that heat produced by the project could kill golden eagles and other protected species.

“We’re trying to figure out how big the problem is and what we can do to minimize bird mortalities,” said Eric Davis, assistant regional director for migratory birds at the federal agency’s Sacramento office. “When you have new technologies, you don’t know what the impacts are going to be.”

Ivanpah may be the first large utility-scale solar thermal installation in California, and also the last:

Though Ivanpah is an engineering marvel, experts doubt more plants like it will be built in California. Other solar technologies are now far cheaper than solar thermal, federal guarantees for renewable energy projects have dried up, and natural gas-fired plants are much cheaper to build.

That means the private sector must fill the gap at a time when building a natural-gas fired power plant costs about $1,000 per megawatt, a fraction of the $5,500 per megawatt that Ivanpah cost.

“Our job was to kickstart the demonstration of these different technologies,” Energy Secretary Ernest Moniz said in an interview high up on one of the plant’s three towers.

The plant is projected to produce approximately 380 megawatts “during the peak hours of the day,” according to BrightSource.

A technology that costs 5.5 times more to build and that delivers electricity that is 161 percent more expensive than coal, and that secures it’s funding through political connections is not the job of the Department of Energy–or taxpayers’ dollars–nor to “kickstart the demonstration of these different technologies.”

Not when it produces just 0.24 percent of the electricity in the United States in November 2013, according to the EIA.

CO electric rates rise along with increase in preferred energy mandate

February 7, 2014 by Amy · Comments Off
Filed under: New Energy Economy, renewable energy, solar energy, wind energy 

In 1999 Colorado enjoyed some of the lowest electricity rates in the United States and the Mountain West. In 2004, Colorado voters approved Amendment 37, requiring investor owned utilities to provide 10 percent of the electricity sold to end users to come from the preferred sources wind and solar.

Since 2004, the Colorado state legislature has mandated increases in the renewable portfolio standard, more appropriately titled the preferred energy standard, from 10 to 20 to the current 30 percent by 2020. Only Maine (40 percent by 2017) and California (33 percent by 2020) have more aggressive mandates, and they also have higher electric rates than Colorado.

Last year the state legislature passed a 20 percent preferred portfolio standard on Colorado’s rural electric cooperatives.

As the mandate to produce more electricity from wind and solar has increased so have Colorado’s electricity rates.

  • In 1999 Colorado’s electric rates were 5.9 cents per Kilowatt hour (kWh) and were the 18th least expensive in the country.
  • In the 1990s Colorado’s population increased by 30 percent, electricity demand grew 26 percent, yet real prices fell 25 percent in the same period.
  • If electric rates simply kept pace with inflation, Coloradans would have paid 8.4 cents per kWh in 2013 instead of 9.83 cents per kWh.
  • In 2000, Colorado’s residential rates were 7.31 per kWh; adjusting for inflation that’s the equivalent of 9.89 cents in 2013. Instead Coloradans now pay 11.91 cents per kWh for residential electricity.
  • Colorado’s current electric rate for all sectors is 9.83 cents per kWh, nearly 7 percent higher than the Mountain West average of 9.21 cents per kWh.
  • Colorado’s electric rates increased 4.5 percent last year while U.S. electric rates increased only 2.4 percent last year.
  • At 11.91 cents per kWh, Colorado has the highest residential rates in the Mountain West.
  • Colorado residential electric rates are the 20th highest in the nation, with California, Alaska, and Hawaii being the only western states with higher residential rates.

Most information available at the U.S. Energy Information Administration, Table of “Average Retail Price of Electricity to Ultimate Customer by End-Use Sector.”

Legislative Preview: 2014 Energy Bills

January 24, 2014 by michael · Comments Off
Filed under: Archive, Hydraulic Fracturing, Legislation, renewable energy 

Current through January 24, 2014

Reform defeated: SB14-035 Renewable Energy Standard Repeal *postponed indefinitely*

Senate Bill 35, introduced by State Sen. Ted Harvey, would have repealed “substantially all of the provision enacted by Senate Bill 13-252″ by returning the renewable portfolio standard to 10 percent from 20 percent for rural cooperative electric associations, among other cuts.

The bill, sent to the State, Veterans and Military Affairs committee was killed Wednesday on a 3-2 party line vote. The SVMA committee has been dubbed the “kill committee” by the minority party, where bills are sent to receive a quick despatch.

Comment: As this bill has been killed, the Independence Institute will examine a similar bill, proposed by State Sen. Ray Scott on Wednesday that would reduce the RPS requirement from 20 percent to 15 percent.

SB14-011 Colorado Energy Research Authority

Among other provisions housekeeping provisions, SB 11 “substitutes ‘clean energy’ for ‘renewable energy’” and authorizes additional monies in the amount of $2 million to create an “energy research cash fund” (ERCF) for the next five fiscal years.

Comment: Substituting “clean” for “renewable” energy is noteworthy. The fiscal note estimates a cost of $2,000,000 annually for the next five years for the ERCF from the state General Fund.

SB14-028 Expand Electric Vehicle Charging Station Grants *Passed Senate second reading with amendments*

SB 14 “expands the existing list of persons and entities that are eligible to receive moneys from the electric vehicle grant fund, administered by the Colorado energy office (CEO), by adding private businesses and nonprofits and allowing the CEO to consider the extent to which grant applicants’ proposed charging locations serve existing vehicles or encourages the acquisition of new vehicles.”

Comment: The bill’s fiscal note estimates that the impact will be “minimal” with grant monies collected under HB13-1110 providing the resource stream. Funding will go to as many stations as possible, but could include fulling funding those installations “in a location that is especially advantageous for support of the electric vehicle market.”

SB14-082 Renewable Energy Standard Adjustment for Cooperative Electric Associations

SB82: “In the section of the renewable energy standard statute setting aside a specific portion of electric generating capacity that cooperative electric associations must meet through distributed generation, the bill:
• Eliminates the disparity between cooperative electric associations serving fewer than 10,000 meters and those serving 10,000 or more meters;
• Establishes a uniform 0.5% of total retail electricity sales as the target percentage for distributed generation; and
• Allows the 0.5% to be measured collectively among these associations as a group rather than individually.”

Comment: Fiscal note estimates minimal impact.

SB14-103 Phase In High-Efficiency Water Fixture Options

SB103 “prohibits the sale of lavatory faucets, shower heads, flushing urinals, tank-type toilets, and tank-type water closets on and after September 1, 2016, unless they are a watersense-listed plumbing
fixture.”

Comment: No fiscal note. The bill defines a “watersense-listed plumbing fixture” as:

• Tested by an accredited third-party certifying body or laboratory in accordance with the federal environmental protection agency’s WaterSense program;
• Certified by such body or laboratory as meeting the performance and efficiency requirements of the program; and
• Authorized by the program to use its label.

The bill would expand the current requirements for “water-efficient indoor plumbing fixtures” which apply currently to builders of new homes, new state buildings, and new and renovated residential, office, and commercial buildings, but at a much lower and “less stringent” standard than the one defined by WaterSense.


HB14-1012 Advanced Industry Investment Income Tax Credit

HB1012 “repeals the Colorado innovation investment tax credit and replaces it with the advanced industry investment tax credit.” The tax credit would be available through the end of 2017 for “an equity investment in a qualified small business from the advanced industries, which consists of advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, information technology, and infrastructure engineering.” The tax credit would equal 25 percent of the investment and up to 30 percent if the business “is located in a rural area or economically distressed area.” Maximum tax credit would be $50,000 for a single tax credit, and up to $2 million per calendar year, with rollover.

Comment: No fiscal note at the present time.

HB14-1030 Hydroelectric Generation Incentive

HB1030 would “promote the construction and operation of hydroelectric facilities in Colorado” by providing incentives for additional installation and elevating community hydroelectric energy facilities “into the community solar garden statute.”

Comment: The bill’s fiscal note estimates a cost of less than $2,500 per year. The hydroelectric power in question would be targeted at those “small hydropower projects of 30 megawatts or less” sited in “streams, diversion ditches for irrigation, or existing dams.”

HB14-1064 Severance Tax Distribution To A Local Government That Limits Oil And Gas Extraction *postponed indefinitely*

HB1064 “prohibits any local government that has a moratorium or permanent prohibition on the extraction of oil and gas from receiving more direct distributions or grants and loans than the local government received in the fiscal year during which the moratorium or permanent prohibition was enacted.”

Comment: The restriction would be lifted in the following fiscal year if a county or municipality rescinds the moratorium or permanent prohibition. In the meantime, the “moneys that would otherwise have been distributed to the county or municipality are redistributed on a pro rata basis to all other eligible counties and municipalities.” The fiscal note puts a total price tag of approximately $40,000 over the next two fiscal years.

In other words, the bill would properly restore balance between counties and municipalities who choose to limit oil and gas extraction and those that do not, as the localities instituting prohibitions should not benefit from increased activities elsewhere by matching severance tax revenues to activities permitted.

**Bill postponed indefinitely, 7-6 party line vote:

Jonathan Singer, D-Longmont, said. “My community is downstream and downwind from oil and gas operations and we feel the public health impacts of fracking regardless of existing fracking bans.”

Sonnenberg presented his proposal as a measure of fairness, ensuring that cities don’t benefit financially from a practice they’ve banned and that those communities that do allow fracking benefit from more of the severance tax revenue.

“Passing this bill would have directed a higher percentage of severance tax funds to communities that help provide for the energy needs of our state,” said Sonnenberg.

“I am disappointed the Democrats failed to see the importance of providing these communities additional revenue to support the oil and gas industry.”

HB14-1067 Renewable Energy Electric Standard REAs Move to 2025

This renewable reform bill, HB1067, “changes the target date to achieve the renewable component of the energy generation portfolio of retail cooperative electric associations [CEA] serving 100,000 or more customers, and qualifying wholesale utilities” from 2020 to 2025.

Comment: The fiscal note indicates a minimal impact. CEAs required to comply with the 20 percent renewable energy standard by 2020 would need to meet step-change adjustments that increase from 6 percent in 2015-2019 to 20 percent in 2020 would see a five year extension for meeting requirements. Measures available to comply with the requirement include development of “eligible generation facilities,” entering into power purchase agreements with “an eligible energy generation facility,” or purchasing “existing renewable energy credits”–each of which, the fiscal note determined, would  involve “additional costs” for the CEA.

The Independence Institute will also examine any additional energy bills introduced this session as they become available. This bill survey, completed on January 10, did not indicate any bills on hydraulic fracturing.

HB14-1113 Electric Renewable Energy Standard Reduction

HB1113 orders the public utilities commission to establish electric resource standards, or minimum percentages of electricity that electric service providers “must generate or cause to be generated from recycled energy and renewable energy resources.” This bill moves the current required minimums from 20 to 15 percent until 2019, and from 30 to 15 percent for 2020 and subsequent years. It also reduces the required minimum for rural electric coops to be reduced from 20 to 15 percent for 2020 and in the years following.

Comment: No fiscal note. This bill looks to challenge provisions from last year’s SB252, while also leveling all required electricity standards to be a flat 15 percent for both investor-owned and rural electric cooperative associations from 2020 and thereafter. Step-increases mandated by earlier bills are voided and returned to a standard 15 percent.

HB14-1138 Renewable Energy Standard Add Hydroelectric to Eligible

HB1138 “amends the definition of ‘renewable energy resources’ that can be used to  meet the state’s renewable energy standard to include hydroelectricity and pumped hydroelectricity.”

Comment: Fiscal note indicates minimal impact. The impact on state policy, however, could be quite large. Adding hydroelectric and pumped hydroelectric electricity to be added to the state’s list of eligible energy resources for meeting Colorado’s renewable energy standard “reduces the amount of energy required to be generated from other eligible resources (principally wind),” according to the bill’s fiscal note. This could affect not only state agency and local government electricity rates, but those of ratepayers statewide as well.

HB14-1150 State and Local Government and Federal Land Coordination

HB1150: “The bill creates the division of federal land coordination in the department of local affairs to address federal land decisions in Colorado that affect the state and local governments. The chief coordinator is the head of the division and is required to form a federal land coordination task force to study certain federal land decisions. The department of agriculture, the department of natural resources, the Colorado tourism office, the Colorado energy office, and the office of economic development are required to assist the division at the request of the chief coordinator. Based on task force findings, the chief coordinator may recommend that a local government receive a grant for research and analysis to form a coordinated response to a federal land decision.”

Comment: No fiscal note.

HB14-1159 Biogas System Components Sales and Use Tax Exemption

HB1159: “The bill exempts from state sales and use tax components used in biogas production systems. Local governments that currently impose sales or use tax on such components may either continue to do so or may exempt them from their sales or use taxes.”

Comment: The fiscal notes estimates a reduction in state tax revenues of up to $635,000.

This bill creates a sales and use tax exemption, or carve out, for capturing biogas to be used as a renewable natural gas, or for equipment used to create electricity from the biogas. Biogas “is
a natural by-product that is released as manure, food waste, and other organic compounds
breakdown.” This bill appears targeted to one project in Weld County, the Heartland Biogas Project, a 20 MW “anaerobic digester and renewable natural gas (RNG) facility” set to come online as soon as April 2014.

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.

Obama Administration Ramps Up Renewables, Extends Wind Energy ‘Takings’ On Eagles

December 10, 2013 by michael · Comments Off
Filed under: renewable energy, wind energy 

A pair of energy policy moves made by the Obama administration at the end of 2013 could have an impact far beyond the end of second term, drawing criticism from natural resource proponents and environmentalists alike.

Last week, the White House issued a memorandum targeting a requirement of 20 percent of all energy consumed by Federal agencies to come from renewables:

Section 1. Renewable Energy Target. (a) By fiscal year 2020, to the extent economically feasible and technically practicable, 20 percent of the total amount of electric energy consumed by each agency during any fiscal year shall be renewable energy.

(b) Agencies shall seek to achieve the renewable energy consumption target set forth in subsection (a) of this section by, where possible, taking the following actions, which are listed in order of priority:

(i) installing agency-funded renewable energy on-site at Federal facilities and retain renewable energy certificates;

(ii) contracting for energy that includes the installation of a renewable energy project on-site at a Federal facility or off-site from a Federal facility and the retention of renewable energy certificates for the term of the contract;

(iii) purchasing electricity and corresponding renewable energy certificates; and

(iv) purchasing renewable energy certificates.

The memorandum details a stepped approach, with year-over-year minimum targets to reach the 20 percent benchmark:

(i) not less than 10 percent in fiscal year 2015;

(ii) not less than 15 percent in fiscal years 2016 and 2017;

(iii) not less than 17.5 percent in fiscal years 2018 and 2019; and

(iv) not less than 20 percent in fiscal year 2020 and each fiscal year thereafter.

Naturally, the President’s move has drawn opposition. The mandate will put pressure on the markets for both traditional energy sources and renewables , and could put consumers on the hook for higher energy costs with the Federal government picking energy winners and losers, according to The Daily Caller.

But a move to extend the life of one renewable energy source–in this case, wind–by granting a six-fold extension to ‘takings’ permits issued to wind farms that allow the accidental killing of bald and golden eagles has united opponents normally at odds: Senator David Vitter (R-LA) and groups like the National Audubon Society and Natural Resources Defense Council.

A sampling, from Politico:

It’s baldly un-American, Vitter said Friday.

“Permits to kill eagles just seem unpatriotic, and 30 years is a long time for some of these projects to accrue a high death rate,” said the Louisiana senator, who is the top Republican on the Senate Environment and Public Works Committee and one of Congress’s most outspoken critics of wind.

Sounding a similar theme, National Audubon Society CEO David Yarnold said it’s “outrageous that the government is sanctioning the killing of America’s symbol, the bald eagle.” He indicated his group may sue the administration.

The rule also drew criticism from Frances Beinecke, president of the Natural Resources Defense Council, who said it “sets up a false choice that we intend to fight to reverse.”

“This rule could lead to many unnecessary deaths of eagles. And that’s a wrong-headed approach,” she said. “We can, and must, protect wildlife as we promote clean, renewable energy. The Fish and Wildlife Service missed an opportunity to issue a rule that would do just that.”

Secretary of the Interior Sally Jewell defended the rule change.

“Renewable energy development is vitally important to our nation’s future, but it has to be done in the right way. The changes in this permitting program will help the renewable energy industry and others develop projects that can operate in the longer term, while ensuring bald and golden eagles continue to thrive for future generations,” Jewell said.

The National Wildlife Federation and the American Bird Conservancy also criticized the move. Conservationists had also hoped to postpone the takings ruling earlier this year when they lobbied the White House, asking for more time to learn more about the way wind energy interacted with wildlife, and particularly, birds and bats.

“The question is what is the science telling us about how to prevent eagle takings, and we’re still waiting for the science to tell us how that works,” Defender of WIldlife’s Julie Falkner told The Hill in August.

At least 67 eagles of both types have been killed by wind turbines since 2008, according to government biologists. One wind site in California sees approximately 60 eagle deaths per year, the AP found, and a new site in Wyoming could register the same death toll each year once it is up and running. A proposed Maryland wind farm could see 20 fatalities a year, and developers have pulled back temporarily, citing the need to study the impact on eagles in the area before completing the project.

A 2012 peer-reviewed study estimated that Federal statistics provided in 2009 of 440,000 birds killed per year may have been off by as much as 30 percent, putting the figure closer to 575,000 birds and nearly 900,000 bats killed annually with current installed wind capacity.

Those deaths were kept quiet, and the push for the rule change came as much from corporate pressure as it did from an administration willing to accept energy tradeoffs, according to the Associated Press’s Dina Capiello:

An investigation by The Associated Press earlier this year documented the illegal killing of eagles around wind farms, the Obama administration’s reluctance to prosecute such cases and its willingness to help keep the scope of the eagle deaths secret. President Barack Obama has championed the pollution-free energy, nearly doubling America’s wind power in his first term as a way to tackle global warming.

But all energy has costs, and the administration has been forced to accept the not-so-green sides of green energy as a means to an end.

Want open space? Don’t go wind or solar!

August 2, 2013 by Amy · Comments Off
Filed under: Archive, New Energy Economy, renewable energy 

By Robert Applegate

Amid the National Renewable Energy Laboratory’s (NREL) latest report1 on the land requirements of solar power generation, others are taking a look at what is really required to power homes using solar and wind and comparing that to another carbon free source, nuclear power generation.

A nuclear power plant, the biggest reactors currently available would take up less than 2 square miles and produce 3200MW of power.2 To achieve this same power output from solar would require 292 square miles, 146 times the amount of land required for a nuclear plant.2 A wind farm would need to be 832 square miles, or 416 times the land to create the same amount of power of the nuclear plant.2 To put this into perspective, the land footprints are shown over the backdrop of the state of Rhode Island, where the blue is a nuclear plant, the yellow a solar farm, and the green a wind farm all of equal capacity.

Land footprint comparisons

Land footprints of a nuclear plant (blue), solar array (yellow), and a wind farm (green) all of equal capacity (3200MW), over the backdrop of the state of Rhode Island.2

__________________

1      NREL Report Firms Up Land-Use Requirements of Solar. Study shows solar for 1,000 homes would require 32 acres. July 30, 2013.  http://www.nrel.gov/news/press/2013/2269.html

2      What Does Renewable Energy Look Like? Clean Energy Insight, 10 Apr, 2010. http://www.cleanenergyinsight.org/energy-insights/what-does-renewable-energy-look-like/

Next Page »