Energy Policy Center Report: Electricity rates skyrocket across all Colorado sectors

Across all sectors of Colorado the cost of electricity has skyrocketed more than 67 percent between 2001 and 2014, easily exceeding median income growth and the expected rate of inflation for the same period, an extended analysis of government energy records by the Independence Institute has revealed.

Energy_Increase_AllSectors_Percent_a

Energy_Increase_AllSectors_kwh

For all sectors between 2001 and 2014, the cost per kilowatthour jumped from just over 6 cents to more than 10 cents, or 67.11 percent.

Data obtained by the Independence Institute from the Energy Information Administration and the U.S. Census Bureau showed an increase in electricity rates for residential, commercial, industrial, and transportation sectors throughout the state contributing to the across-the-board growth in prices. In November, the Energy Policy Center reported a staggering increase of 63 percent for residential customers in Colorado.

“Retail residential electricity rates increased from 7.47 cents per kilowatthour in 2001 to 12.18 cents per kilowatthour by 2014, a 63.1 percent hike. Coloradans’ median income, however, went up just 24.1 percent, from $49,397 to $61,303. Median income in Colorado actually declined between 2008 and 2012,” the report concluded. It also noted that the U.S. Bureau of Labor and Statistics projected just a 34 percent increase in inflation for the 14 year period, using the agency’s CPI inflation calculator.

And while the data for late 2015 from the BLS indicated a modest decline of 2.9 percent in electricity prices for the Denver-Boulder-Greeley census area, this drop in rates did not offset the 3.8 percent increase seen one year earlier. While global commodity prices have given Colorado energy consumers a brief respite (and wild fluctuations in prices), electricity generation and costs have proven less volatile.

“The energy index, which includes motor fuel and household fuels, decreased 19.0 percent from the second half of 2014 to the second half of 2015, following an increase of 0.3 percent in the same period one year ago. Falling prices for motor fuel (-26.0 percent), all of which occurred in the first half of the period, were largely responsible for the decline in the energy component. Lower prices for utility (piped) gas service (-18.9 percent) and electricity (-2.9 percent) also contributed to the decrease. During the same period one year ago, motor fuel costs declined 3.1 percent, while the indexes for utility (piped) gas service and electricity rose 5.8 and 3.8 percent, respectively,” the BLS report concluded.

Energy_Increase_Residential_Percent

Energy_Increase_Residential_kwh

Analysis from the earlier November report on residential electricity rates stands confirmed and, indeed, underscored:

It’s clear from the data that Coloradans’ income is not keeping pace with almost continuous electricity price increases over the past 15 years, consistently outpacing the rate of inflation. Colorado’s ratepayers have had to endure two economic recessions over that period, while feeling no relief from escalating energy prices driven by onerous regulations driving energy costs ever higher.

From fuel-switching and renewable mandates to other costly regulations imposed by state and federal agencies, Colorado’s ratepayers and taxpayers alike have been subject to policies that do not consider energy affordability or reliability as a primary concern. The most vulnerable communities–elderly, minorities, and the poor–are the most sensitive to even the smallest increases in energy costs.

Not to mention the state’s many business owners, including small business owners, who face the same hikes in energy costs that could force decisions like layoffs or relocation to nearby states, where energy costs are lower. This reduces job growth and harms the state’s economy twice, with increased business costs passed on to consumers–the same ratepayers who already are paying more at the meter.

Upshot: the data for the remaining sectors emphasizes the double impact that increased energy costs have in the form of rapidly escalating electricity rates on Colorado ratepayers, who see not only their own personal energy costs rise, but are hit a second time by commercial, industrial, and transportation charges that are “baked into” the cost of providing goods and services that are passed on to consumers.

William Yeatman, senior fellow of environmental policy and energy markets at the Competitive Enterprise Institute and author of the Independence Institute’s 2012 Cost Analysis of the New Energy Economy, said in the November report that given the current regulatory climate, things “could get much worse.”

Some of the costs already baked in to electricity prices came directly from policy initiatives undertaken in the last decade.

Yeatman analyzed 57 legislative items included in the push for a “New Energy Economy,” determining that as much as $484 million in additional costs were incurred by the state’s Xcel customers–an additional $345 per ratepayer.

“The best explanation for this confounding upward trend in utility bills nationwide is the Obama’s administration’s war on coal. Colorado, alas, was well ahead of the curve on the war on coal, which explains much of why the state’s rate increases are presently so much greater than the nationwide average,” Yeatman said.

Part of the war on coal, the Environmental Protection Agency finalized the Clean Power Plan in August 2015.

The policy battle over the EPA’s Clean Power Plan, and the future of Colorado’s electricity rates, rests upon multi-state legal challenges to the agency’s authority that just last week resulted in a stay from the U.S. Supreme Court. That decision was overshadowed, however, by the subsequent death of Justice Antonin Scalia days later, leaving the legal challenge in turmoil given the SCOTUS’ delicate and likely 4-4 ideological split and the contentious election year battle over nominations to replace Scalia.

Meanwhile, Governor John Hickenlooper remains committed to pushing for a “prudent” continuation of planning for Clean Power Plan implementation, with the Colorado Department of Public Health and Environment proceeding with its pre-stay timeline. Colorado Senate Republicans, however, called ignoring the court’s stay “unacceptable.” Legislation addressing CDPHE’s ability to proceed with CPP planning will likely be introduced before the end of the 2o16 Colorado legislative session.

The Independence Institute’s analysis of electricity costs, broken down by the other sectors, shows commercial electricity rates for Colorado have seen a 77.78 percent increase from 2001 to 2014, jumping from 5.67 cents per kilowatthour to 10.08 cents.

Energy_Increase_Commercial_Percent

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Industrial rates have tracked with the overall rate increase of approximately 67 percent, from 4.48 cents to 7.47 cents per kilowatthour.

Energy_Increase_Industrial_Percent_a

Energy_Increase_Industrial_kwh

Transportation figures from EIA data do not extend back to 2001. Instead, the trackable data begins in 2003, with a sharp decline by 2005, before prices more than doubled, from 5.01 cents to 10.79 cents per kilowatthour, or a 115 percent increase in the last full 10 years of EIA measurement.

Energy_Increase_Transportation_Percent_a

Energy_Increase_Transportation_kwh_a

Overall increases for comparison (with the adjustment for transportation noted):

Energy_Increase_Combined_Percent_a

For a complete description of EIA definitions of electricity consumers and data collection, click here.

Colorado’s skyrocketing electricity prices could get much worse

November 24, 2015 by michael · Comments Off
Filed under: Legislation, New Energy Economy, preferred energy, regulations, solar energy, wind energy 

The cost of electricity for Colorado residents skyrocketed 63 percent between 2001 and 2014, far outpacing median income in the state at just 24 percent over the same time period, according to Independence Institute analysis of electricity rates provided by the Energy Information Administration and census data from the U.S. Census Bureau.

Retail residential electricity rates increased from 7.47 cents per kilowatthour in 2001 to 12.18 cents per kilowatthour by 2014, a 63.1 percent hike. Coloradans’ median income, however, went up just 24.1 percent, from $49,397 to $61,303. Median income in Colorado actually declined between 2008 and 2012.

Percent_Increase_NRG_Income

In comparison, the U.S. Bureau of Labor and Statistics’ CPI inflation calculator returned an inflation measurement of 34 percent between 2001 and 2014.

Increase_Residential_Electricity

Increase_Median_Income

It’s clear from the data that Coloradans’ income is not keeping pace with almost continuous electricity price increases over the past 15 years, consistently outpacing the rate of inflation. Colorado’s ratepayers have had to endure two economic recessions over that period, while feeling no relief from escalating energy prices driven by onerous regulations driving energy costs ever higher.

From fuel-switching and renewable mandates to other costly regulations imposed by state and federal agencies, Colorado’s ratepayers and taxpayers alike have been subject to policies that do not consider energy affordability or reliability as a primary concern. The most vulnerable communities–elderly, minorities, and the poor–are the most sensitive to even the smallest increases in energy costs.

Not to mention the state’s many business owners, including small business owners, who face the same hikes in energy costs that could force decisions like layoffs or relocation to nearby states, where energy costs are lower. This reduces job growth and harms the state’s economy twice, with increased business costs passed on to consumers–the same ratepayers who already are paying more at the meter.

“Colorado is an outlier in front of an unfortunate nationwide trend. According to federal data, average U.S. electricity prices in 2016 are projected to be about 4.5 percent greater than 2013 levels, despite decreasing overall demand, historically low natural gas prices, and plummeting oil,” said William Yeatman, senior fellow of environmental policy and energy markets at the Competitive Enterprise Institute and author of the Independence Institute’s 2012 Cost Analysis of the New Energy Economy.

“The best explanation for this confounding upward trend in utility bills nationwide is the Obama’s administration’s war on coal. Colorado, alas, was well ahead of the curve on the war on coal, which explains much of why the state’s rate increases are presently so much greater than the nationwide average,” he continued. “Governor Ritter and PUC Chairman Ron Binz were the primary players responsible for the creation of the so-called New Energy Economy, which is perhaps better labeled the Expensive Energy Economy. Theirs was a two-part policy. First, they shuttered a number of coal-fired power plants that were already paid for and that enjoyed among the lowest fuel costs on the state’s grid. To be clear: they shut down the cheapest sources of power. Second, they replaced this cheap power with expensive power. Instead of having power plants that were paid for, they required the construction of brand new gas power plants. And they required wind, much of which was “locked in” for long periods at exorbitant rates set on the price of natural gas 8 years ago. And they required solar, a program on which all ratepayers have paid hundreds of millions of dollars to subsidize the installation of solar panels for the relatively few. Ritter and Binz are well out of office, but Coloradans now shoulder the burden of their misguided policies,” Yeatman concluded.

Yeatman’s analysis of 57 legislative items guided by Governor Ritter’s New Energy Economy push yielded $484 million in additional costs by 2012 to the state’s Xcel customers alone, or an additional $345 for every ratepayer.

But even these costs might not be all that’s in store for Colorado’s pressured electricity consumer.

“The saddest part of all is that it’s as yet uncertain whether any of Colorado’s rateshock would help stave off the worst of the Obama administration’s climate initiative, were that regulation to survive judicial review. That means that it could get much worse,” Yeatman said.

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.

Xcel admits what “clean energy” advocates won’t

August 29, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Normally reading an energy compliance plan is about as exciting as watching low VOC paint dry.  But Xcel Energy’s 2012 Renewable Energy Standard Compliance Plan, filed with the Public Utilities Commission in May 2011, has some pretty powerful stuff in it including admissions about Colorado’s “phantom carbon tax” and the cost effectiveness of renewable energy.

In Section 7 — Retail Rate Impact and Budget, Xcel acknowledges that my testimony in front of the Agriculture Committee on HB 1240 (the bill explained here and here) in February 2011 was correct. No national carbon tax in the near future.

The carbon assumptions approved by the Commission in Docket No. 07A-447E assumed carbon regulation would be enacted in 2010; such regulation was not enacted and the prospects for near term carbon regulation appear to be slim.

Passage of a national carbon tax under Cap and Trade was the underlying assumption when HB 1164 passed the state legislature in 2008. With no carbon tax at the national level and virtually no chance of one passing any time soon, why does Colorado still have one? Good question. Lawmakers on both sides of the aisle capitulated to special interests, including Xcel, and voted to kill HB 1240, which would have repealed the controversial “phantom” tax.

Because Xcel assumes there will be no carbon tax in the near future, it presents a cost model that excludes the carbon tax and another model that does include the tax but not until 2014.

Due to the uncertainties related to the timing associated with possible carbon emission regulation, the Company did not include any carbon cost imputations in the model runs and other calculations set forth on Table 7-3. However, as discussed later, Public Service also presents with this Compliance Plan, as Table 7-4, a sensitivity case that assumes the same carbon imputation costs ($20 per ton, escalating at 7% annually) as approved in the 2007 Colorado Resource Plan but on a delayed implementation schedule of 2014.

One wonders if the the carbon tax supporters feel a bit betrayed by Xcel’s admission.

For those of you searching for the “carbon tax” on your Xcel bill, stop looking. It does not show up as a line item, but as my colleague William Yeatman and I have written before, “the tax is used in the models, and the models dictate spending. It leaps from the computers to your wallet, like the worst sort of virtual reality.”

The carbon tax is just one way that the PUC allows Xcel to greenwash the real cost of Colorado’s renewable energy, which must be 30 percent of Xcel’s electricity portfolio by 2020.  In spite of a legislatively-mandated two percent rate cap, Yeatman documented how Colorado’s New Energy Economy will cost Xcel ratepayers an additional 8 percent this year alone.

Which leads to this gem about the economic viability of renewable energy. Xcel says it just isn’t cost effective unless it is taxpayer subsidized.

Going forward, it is very questionable if new renewable resources can be cost effective if they do not get the benefit of the Federal Production Tax Credit. Currently the production tax credit for wind is set to expire at the end of 2012 and at the end of 2016 for solar resources.

This is interesting because former Governor Bill Ritter said recently in a debate titled “Clean energy can drive America’s economic recovery” that both he and “the utility” can increase renewable energy for the same price. (Read the entire debate transcript here)

In fact, last year, the utility and I, after talking with each other said, you know what? We can get to 30 percent [renewable] with the same rate cap in place. So, as a state, we’ve got a 30 percent renewable energy standard.

This is where the financial shell game tricks ratepayers. The rate cap is a sham. The real cost of renewable energy is recovered elsewhere on ratepayers’ bills, as we have explained in the past. The American Enterprise Institute’s Steven Hayword, one of Bill Ritter’s opponents in that debate, stated what should be clear economically unless one’s judgment is clouded by green energy infatuation.

the basic problem with so-called clean energy is that nearly every form of it is more expensive than the fossil fuel energy it seeks to displace. Now, I know of no economic theory that says the economy benefits by reducing the purchasing power of consumers.

Representative Max Tyler also claimed an economic fantasy in a Denver Post opinion editorial, “Raising the RES [Renewable Energy Standard] will not raise utility rates.” Writing that rates won’t go up, does not make it true. Rates will go up as we have demonstrated, and now Xcel says that unless taxpayers subsidize renewable energy sources, they just aren’t cost effective — certainly not for ratepayers or taxpayers.

The PUC will decide on Xcel’s Compliance Plan in October 2012. While Xcel seems to accept the reality of no national carbon tax and that renewable energy is an economic fairy tale, it remains to be seen if the PUC, lawmakers and special interest groups will have the same eco-epiphany.

Oops! No EPA threat over SIP

June 21, 2011 by Amy · Comments Off
Filed under: Archive, CDPHE, HB 1365 

Lawmakers (including those in leadership on both sides of the aisle), Xcel Energy, environmentalists, Colorado Department of Public Health and Environment, the Public Utilities Commission and any other group that championed Colorado’s needlessly expensive, likely illegal Regional Haze State Implementation Plan (SIP) have A LOT of explaining to do.  We were told repeatedly that if we did not implement our own SIP via HB 1291, the Environmental Protection Agency will do it for us. Here’s just one example:

Consider this HB 1365 direct testimony from Ritter administration air quality official Paul Tourangeau (p 3), director of the Air Pollution Control Division,

Q: What if the Regional Haze SIP is not submitted to EPA by January 2011?

A: If the Regional Haze is not submitted to EPA on time, EPA will take over the Department’s regional haze program and regulate utilities and other large sources of nitrogen oxides and sulfur dioxide in the state through an EPA-promulgated Federal Implementation Plan. An EPA FIP would impose federal mandates on the large NOx and SO2 sources in the state, including Xcel facilities.

Turns out that wasn’t true as energy expert William Yeatman exposes in a recent post:

Last Wednesday, the lawyers were proven wrong, when the EPA announced that it would get around to deciding on Colorado’s RHSIP…in March 2012. Thanks to the lies peddled by special interests, Colorado ratepayers are $120 million poorer.

We hate to say “we told you so” but truly we did.

Legislature provides cover for Xcel Energy

April 12, 2011 by Amy · 8 Comments
Filed under: Archive, CDPHE, New Energy Economy 

Xcel Energy enjoys great success at the state Capitol. It seems that whatever Xcel wants legislatively, Xcel gets. Relief for ratepayers is met with opposition.

According to the Secretary of State’s online lobbying information, through March 2011, the utility company has taken positions on 28 different bills this year: opposing 14, supporting 3 and “amending” or “monitoring” 11.  So far, bills the utility company supports have either passed or are making their way through the General Assembly.

Most interesting are the 14 bills Xcel opposes, including pro-consumer legislation such as transparency on ratepayers’ energy bills and reducing energy costs through utilization of a “least cost principle.”

Under the leadership of Speaker Frank McNulty (R-Highlands Ranch), the House has done its part by killing all seven bills Xcel opposed in that chamber, including HB 1240 which would have repealed Colorado’s carbon tax and restricted Xcel’s rate of return on capital construction.  The “phantom carbon tax,” as my colleague William Yeatman and I have labeled it, is:

a central component of his [Governor Bill Ritter] New Energy Economy…a big, hidden energy tax that makes customers pay for the controversial theory of global warming.

In order to make Ritter’s New Energy Economy appear affordable, the Public Utilities Commission (PUC) allows Xcel Energy to incorporate at least a $20-per-ton carbon tax into the economic models the utility uses to make resource acquisition decisions.  The tax is used in the models, and the models dictate spending.

Ritter’s carbon tax is the worst kind of virtual reality because it leaps from the computers to your wallet.

Representative Spencer Swalm garnered bi-partisan support for the repeal, but Republicans killed it in the House Agriculture Committee with “NO” votes from Representatives Glenn Vaad (Greeley), Ray Scott (Grand Junction), and Committee Chairman Jerry Sonnenberg (Sterling). Sonnenberg and Scott were even listed as sponsors of the legislation.

The all-Republican Weld County Board of Commissioners also joined the Ag Committee Republicans, going on record as supporters of Colorado’s phantom carbon tax.  Commissioner and Chairwoman Barbara Kirkmeyer, testified that her “entire board” opposed HB 1240 and thus opposed the repeal of the phantom carbon that is so costly to ratepayers.

Furthermore, in 2008, Vaad, Sonnenberg and McNulty opposed the initial legislation that enabled the carbon tax that they now support.

The State Senate, under the leadership of Senate President Brandon Shaffer, also has done its part to appease Xcel. So far, it has killed five Xcel-opposed bills, including the “least cost principle,” and two more are languishing in committee.

Monday the House continued its anti-ratepayer policy with passage of HB 1291, which would approve Colorado’s State Implementation Plan (SIP) for regional haze costing ratepayers an additional $1 billion according to Xcel’s 2010 annual report. The plan is both expensive and likely illegal. The $1 billion price tag is of little concern to Xcel because it recovers the entire cost from ratepayers. Xcel customers can thank Representatives David Balmer, Don Beezley, Kathleen Conti, Don Coram, Robert Ramirez and Spencer Swalm for their courageous “NO” vote.

Mr. Yeatman, our energy policy analyst, has written extensively on the SIP. In particular, he has detailed the plan’s unnecessary inclusion “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 Projection Agency.”

Yeatman notes:

  • Costs of the plan exceed benefits by a 40:1 ratio.
  • Even the EPA concedes that the chosen technology, Selective Catalytic Reduction (SCR), is not cost effective for smaller plants such as Hayden 1 and Hayden 2.
  • Utah determined that SCR is not cost effective.
  • Evidence suggests that the Colorado Department of Public Health and Environment grossly overestimated visibility benefits.
  • The threat of a federal takeover if the plan was not submitted by January 2011 was greatly exaggerated, rushing the deliberative process.
  • Under Colorado law (§25-7-105.1(1) C.R.S.), a SIP cannot impose emissions controls that are more stringent than what the EPA requires.

HB 1291 must be important because the Colorado Oil and Gas Association (COGA) is saturating television and radio with ads encouraging Republicans to approve it. Leaving nothing to chance, sponsorship includes two heavy hitters – Speaker McNulty and Senate Majority Leader John Morse – essentially guaranteeing passage at the expense of ratepayers.

The prevailing paradigm on Colorado’s energy policy is that industry, the utility, politicians, environmentalists and bureaucrats have come together to forge a united “clean energy” path for Coloradans. However, there’s one group that has been noticeably absent – ratepayers, those fools who actually pay the bill.

Yeatman conservatively estimates that the four most prominent aspects of the New Energy Economy will cost Colorado ratepayers an additional $212.3 million in 2011 alone.  Add millions more for the SIP that the Colorado General Assembly does not have the courage to challenge along with tiered seasonal rates, and Colorado ratepayers are in for an expensive 2011.

There is good news.  Two State Senators Kevin Lundberg (R-Berthoud) and Lois Tochtrop (D-Adams County) are challenging leadership and providing a voice for consumers.  Senator Lundberg introduced SB 237 to require state to consider the cost-effectiveness of the SIP and be more energy-neutral.

According to the Colorado News Agency, Tochtrop’s bill SB 236 would replace “a key provision of the PUC-backed” SIP with “what Tochtrop says is less costly approach.”

Energy experts say that either Lundberg’s or Tochtrop’s bills likely would save ratepayers between $100-200 million dollars, which means they probably don’t have a chance in this state legislature.

While it’s not surprising that an investor-owned, state-sanctioned monopoly would seek favor with the legislature, it is surprising that elected officials expected to represent the interests of their constituents would simply rubber-stamp Xcel’s political and financial agenda.

But with this General Assembly, Xcel gets its way.

Renewable energy mandates unconstitutional?

April 4, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

We know they are costly but are renewable energy mandates such as Colorado’s 30 percent mandate unconstitutional as well? Yes according to the American Tradition Institute, which “filed a complaint in a U.S. district court that contends Colorado’s RES should be declared unconstitutional because they violate the Commerce Clause, which grants only Congress the authority to regulate interstate trade.”

Paul Chesser of  ATI explains in a Washington Times op-ed:

Colorado’s law mandates that 30 percent of its electricity come from renewable sources by the year 2020. That discriminates – by mandating the purchase and use of renewables – against other legal, less costly, less polluting, safer and more reliable in-state and out-of-state sources of electricity.

Specifically:

For example, the law places a greater value upon alternative energy initiated within its borders but not outside them. This falls under the federal government’s regulatory powers, not Colorado’s.

Our own William Yeatman is providing expert energy testimony in the case. Go here for the entire original complaint.

Phantom carbon tax still haunts ratepayers

February 21, 2011 by Amy · 2 Comments
Filed under: Archive 

Xcel Energy testified today in the House Agriculture Committee that its resource acquisition projections DO include a $20 per ton “phantom carbon tax” as allowed under language from HB 08-1164, but the tax DOES NOT affect ratepayers.  The Denver Business Journal reports:

But Karen Hyde, Xcel vice president of rates and regulatory affairs, said the potential carbon tax has not increased her company’s rates. And, she said, the transition from old coal-fired plants to new gas-powered plants will help to avert larger future rate hikes because the money that would be needed to upgrade and continue running the old plants would have been significant, she said.

Now that is both mind boggling and confusing. It’s true that the tax does not show up as a line item on ratepayers’ bills, but as William Yeatman wrote in an earlier post, “The tax is used in the models, and the models dictate spending. It leaps from the computers to your wallet, like the worst sort of virtual reality.”

The Denver Post recently reported that Xcel rates are up 21 percent (two times greater than inflation) over the last few years and projected to go up another 20 percent in the next six, “as the utility adds renewable energy, builds transmission lines and passes fuel costs through to consumers.”

Read more

Review of November 3 PUC Hearing on HB 1365: Xcel Axes Coal, Environmentalist Plans

November 3, 2010 by williamyeatman · Comments Off
Filed under: Archive 

Review of November 3 PUC Hearing on HB 1365

Primer on the Many Implementation Plans that the PUC Is Considering
Primer on HB 1365
Timeline of Implementation Plans
Study on the Dubious Foundations of HB 1365
Archive of HB 1365 Posts
Oped Last Week in Denver Daily News: Ritter’s Phantom Carbon Tax

Xcel Identifies Which Plans It Would Accept

As I noted this morning, HB 1365 gives Xcel the power to veto any of the twelve implementation plans being considered by the PUC. This afternoon, Xcel Vice President of Rates and Regulatory Affairs Karen Hyde identified those plans that are “off the table.”

Here are the plans that have been dropped.

  • Plans 2A & 4C: Ms. Hyde said that Xcel would not consider these two plans because they both would install top of the line nitrogen oxides pollution controls on the 152 megawatt Cherokee 3 coal fired power plant northwest of Denver, instead of closing the plant down. According to Xcel, the pollution controls are less cost-effective than shuttering the plant. This is malarkey. The real reason that Xcel rejected Plans 2A and 4 C is that they only allow for 314 megawatts of replacement electricity generation powered by natural gas.  The utility wants to build at least 650 megawatts of replacement generation, so that it can increase its share of the wholesale electricity market, at the expense of independent power producers.
  • Benchmark Plan 1: This is the plan endorsed by coal interests. It would install pollution controls at eight coal fired power plants. Xcel has long indicated that it finds Benchmark Plan 1 unacceptable.
  • Benchmark Plan 1.1: This is a version of Benchmark 1. It would install pollution controls at five coal fired power plants.
  • Plan 6H: This is Western Resource Advocates’ plan. I discussed this plan in Saturday’s update. Like Benchmark Plan 1, Xcel has long indicated that it would reject WRA’s plan, due to reliability concerns.

Read more

Preview of November 2 PUC Hearing on HB 1365: Big Decisions Due

November 2, 2010 by williamyeatman · Comments Off
Filed under: Archive 

Primer on the Many Implementation Plans that the PUC Is Considering
Primer on HB 1365
Timeline of Implementation Plans
Study on the Dubious Foundations of HB 1365
Archive of HB 1365 Posts
Oped Last Week in Denver Daily News: Ritter’s Phantom Carbon Tax

As of this post [10:08 AM], the PUC has yet to post a written copy of the Department of Public Health and Environment’s determination whether Xcel’s two new fuel switching plans meet “reasonably foreseeable” federal and state air regulations. Yesterday, Chairman Ron Binz said that the CDPHE’s filing was due last evening at 5 PM. If the CDPHE finds that the two fuel switching plans do not meet “readily foreseeable” air quality regulations, then they must be discarded. The CDPHE ruling will likely be the first topic of discussion at the hearing this morning.

After the PUC considers the CDPHE determination, Chairman Binz has promised to revisit his “tentative” decision to allow Xcel to put forth an accelerated version of its preferred plan, despite strong opposition from the PUC Staff. The two fuel switching plans and the accelerated version of the preferred plan were proposed by the utility last week.

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

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