Caught between the compounding costs of our state’s controversial Clean Air Clean Jobs Act of 2010 and sweeping new federal air standards soon to be imposed by the U.S. Environmental Protection Agency, Coloradans could be facing an acute case of sticker shock on their power bills in the not-too-distant future.
And there is an inescapable irony in the combined jab and uppercut that the two measures pose to Colorado ratepayers: Instead of learning from the folly of Colorado policy makers who had rushed headlong into uncharted waters, their federal counterparts appear doomed to repeat it.
Our concern all along with the Colorado law was that it dictated a major shift in fuel sources among regulated-monopoly public utilities operating in the state—with far too little regard for the near- and long-term impact on rank-and-file ratepayers. And it did so without questioning if the costs justify the purported benefits. In the politically driven flight to leave carbon-based energy sources behind entirely, the sheer cost of moving away from reliable, plentiful fossil fuels seems to have been dismissed by Colorado’s General Assembly and Public Utilities Commission.
Now, as a new battery of federal mandates—the Clean Power Plan under Section 111(d) of the Clean Air Act—hurtles down the pike and heads directly toward us, it appears politics is trumping consumer protection once again.
Last week, our coalition took the step of formally filing these concerns with federal environmental regulators as the public-hearings process to take input on the impending federal law gets underway. In a letter directed to EPA Administrator Gina McCarthy on behalf of Colorado’s hard-pressed electricity ratepayers, the coalition expresses “serious concerns,” foremost among them being, “the unknown consequences of an energy policy that has almost no comparison in implementation at the regional or state level.”
As the coalition’s letter to McCarthy points out:
Colorado’s Clean Air Clean Jobs Act…could provide an example of the perils of adopting a sweeping energy-policy experiment with minimal forethought concerning the policy’s economic consequences. CACJA, enacted in 2010, required Xcel Energy—which serves more than 1.4 million Colorado customers—and Black Hills Energy to move away from lower-cost coal and to shutter existing, not-yet-depreciated power facilities in favor of the construction of more than $2 billion in new power generation.
…For Xcel customers, the first significant rate impact is just now being debated, with the Colorado Public Utilities Commission right now considering the company’s request for an annual rate hike of $157 million—primarily to cover the cost of CACJA mandates.
Our comments to the EPA also note that preliminary economic analyses looking to the longer run are even more alarming:
Although the full rate impact is many years from being implemented…the Colorado Consumer Coalition worked with respected Colorado State University economists Harvey Cutler and Martin Shields to forecast the state’s economic performance in light of the sweeping new power generation and clean-air standards mandated by CACJA.
…The economists found that steadily rising power rates triggered by CACJA will eventually cost Coloradans $508 million in lost household income and result in more than 6,400 lost jobs over the next 10 years. The study also concluded that tax revenue to local and state governments will drop by $30 million due to higher electric rates.
And as insult to injury, the coalition letter reminds us:
…much of the power-generation conversions and clean-air regulations mandated by CACJA apparently will not count under the EPA’s current 111(d) draft. With 111(d), Colorado ratepayers are now staring at a double-barrel mandate: A state-level power-conversion program in its infancy, with unknown costs or benefits, soon be trumped by an untested, one-size-fits-all national mandate that barely can account for state-level and regional differences.
The costs could turn out to be enormous, with a punishing effect on an array of everyday Coloradans, from the employers who create our jobs to households on limited or fixed income that struggle to pay their utility bills.
Actually, it’s not so much insult to injury as it is one injury visited upon another. Our own state’s policy makers didn’t heed consumer concerns in 2010. Is there a chance federal regulators will think twice? We’re not hopeful at this point, but we won’t give up the fight.