Time is ticking on the EPA’s clock as the federal agency prepares sweeping new mandates that will significantly impact Colorado consumers and our state’s economy.
The EPA’s rulemaking is starting to get more attention across Colorado and was mentioned by Governor Hickenlooper during a recent presentation to the prominent West Slope advocacy group Club 20. As reported by the Durango Herald:
…Hickenlooper said Colorado is well-prepared for the new rules, which are expected to be issued this summer.
“We’ve done so much already that, once all the dust settles, we should be pretty close to in compliance without having to do a whole lot more,” Hickenlooper said. “Our attention is focused on making sure that we get credit for all that we’ve already done.”
Unfortunately, the Colorado Consumer Coalition does not fully share the governor’s optimism for our state’s compliance with the “Clean Power Plan” under Section 111(d) of the federal Clean Air Act. We would like to be that hopeful, but consumers in Colorado have been on the outside—looking in—on far too many policy decisions impacting electricity rates. That underscores the importance of ensuring there’s a deliberative public process when deciding how Colorado will comply with the EPA’s mandates.
Many of the fears about 111(d) are substantive. So little is known, and so little appears to have been thought through, about this massive federal mandate for draconian action that the government is seemingly bent on imposing regardless of the consequences.
Just for starters, there’s the “credit” that some anticipate Colorado might receive under the federal mandate for all of the heavy lifting the state previously did in developing cleaner air standards of its own. Alas, that likely will pale in the face of the federal Juggernaut, 90 percent of whose arbitrarily elevated standards would have to be imposed by 2020.
Even the largest electric utility operating in Colorado, Xcel Energy, has said for the public record that the federal expectations on such a timeline are unattainable. And that’s even if the Minneapolis-based conglomerate gets full federal credit for all of its substantial investment in new plant and equipment in recent years in compliance with the previously enacted Colorado law.
And, speaking of that prior effort by our state to adopt stricter standards in anticipation of the federal mandate—as it turns out, it has profound implications for the oncoming federal mandate. As our coalition stated not long ago in a letter to EPA chief Gina McCarthy, that earlier effort, the Clean Air Clean Jobs Act of 2010, adopted by the General Assembly, is just now starting to take its toll:
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…
Make no mistake, the proposed federal mandate will impact every type of consumer—residential, small business, agricultural and industrial—in every community in Colorado. That includes consumers served by public utilities, municipal providers and rural cooperatives. And the changes to Colorado’s statewide power generation contemplated by the EPA’s mandates may ultimately cost many billions of dollars.
What, if anything, can Colorado do? Time may not be on our side in the long run, but in the near term, there may be hope. State regulators are already drafting proposals for compliance with the EPA’s forthcoming mandates. The EPA will most likely require a draft state plan by 2016, with a final plan for EPA consideration by 2017.
Though it hardly constitutes a silver lining, that timeline does afford our state’s policy makers a chance to create a process that allows for an open, statewide process to develop, review and debate Colorado’s plan. This is no small consideration because the previous mandates imposed by our own lawmakers and regulators on power consumers lacked transparency and statewide input. Colorado’s economy and consumers simply cannot afford more back room deals that hurt Colorado energy consumers.
That’s why any new process in advance of the federal rules should include provisions allowing the Colorado Public Utilities Commission to review any plans developed by state agencies, looking especially at rate impacts on consumers and reliability. Finally, and most importantly, the General Assembly must be able to debate and then vote on Colorado’s submission to the EPA. PUC review and approval allows for proper technical and economic review of the plan, and most importantly, the legislative process will ensure citizen involvement and direct communication with ratepayers before submittal to EPA.
If the EPA makes substantive revisions, the PUC and the legislature should once again be able to review and accept or reject federal changes to make sure that Colorado’s plan serves all of Colorado’s energy consumers.
Several other states have processes for regulatory and legislative review of air plans; this policy change would simply ensure that Colorado consumers have a similar open and deliberative process.
Implementing such a review process is the least we can do as a state to try and buffer ourselves against the coming blow. As our coalition summed up the predicament in our letter to the EPA:
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 to be trumped by an untested, one-size-fits-all national mandate that barely can account for state-level and regional differences.
Given the long-term impact to Colorado consumers from the EPA’s mandate, we must put in place a process that ensures proper review, debate and scrutiny of Colorado’s plan. Without that oversight in place, there’s just no telling what our state’s energy future might look like.