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Energy in 2012 GA: Legislators address HB 1365, tiered rates and the PUC

Two years after the passage of the fuel-switching bill HB 1365, Governor Bill Ritter’s “crown jewel” of the new energy economy, supporters would like the debate to go away. But like a nagging cough, it just won’t.

Several bills in the 2012 legislative session address issues raised surrounding the collusion to draft HB 1365, the cost recovery, and the role of the Public Utilities Commission (PUC).

Also legislators want the PUC to provide an annual report to the General Assembly and to prohibit tiered rates as a way to reduce monthly electric consumption.

Bill Summaries

HB12-1016 PUC Ex Parte Communications

House Sponsors: David Balmer (R-HD 39)

Senate Sponsors: None

This bill addresses conflicts of interest such as those that occurred with HB 1365 when PUC commissioners helped draft the language of the bill and then sat in judgment of it.  In November 2010, William Yeatman reported that several Colorado State Senators sent a letter to Governor Bill Ritter asking him to remove then Commissioner Ron Binz and Commissioner Matt Baker from deliberations on HB 1365.

The Colorado Mining Association (CMA) also requested that Binz and Baker recuse themselves because of the obvious conflict of interest but both men refused.  A disappointed CMA president Stuart Sanderson told the Denver Post:

[that he’s] not at all surprised by the ruling, which was made by the same commissioners who engaged in the back-room negotiations that led to both the enactment of (the clean-air act) and the plan to switch the Front Range generating stations from affordable coal to higher-cost natural gas.

William suggested in 2010 that this issue should be taken up by the General Assembly:

Of course, it is inappropriate for the PUC to be writing legislation in cahoots with the utility that it regulated, but that’s an issue for the State Legislature. More precisely, why did the General Assembly pass a law written in large part by a utility? That’s where the system failed.

With HB12-1016, it appears the General Assembly will at least have a conversation about it. According to the fiscal note:

The bill modifies the operations of the Public Utilities Commission  (PUC) in several ways. It specifies that the Colorado Code of Judicial Conduct applies to PUC commissioners and administrative laww judges (ALJ). It requires ex parte communication memoranda (private communications between a PUC commissioner or ALJ and an interested person) to be posted on the PUC website within five business days after it is filed. The records of communications between two or more commissioners concerning pending legislative proposals are made subject to disclosure in accordance with the “Colorado Open Records Act.”

When a party to a proceeding before the PUC has a good-faith belief that a commissioner or ALJ may not be impartial or has engaged in a prohibited communication, the party my file a motion to disqualify the commissioner of ALJ from the hearing. The PUC must immediately suspend the proceeding and rule upon the motion within ten business days. If the motion for disqualification is approved, and this results in the loss of a quorum, the decision rendered by a commissioner designated as a hearing officer or the ALJ is the final decision of the PUC.  Any appeal of this final decision may be taken directly to district court rather than be reconsidered by the PUC.

In other words, communication must be made public and the PUC can’t be the court of last resort.

HB12-1102 Cap Clean Air/Clean Jobs Electricity Rate Impact

House Sponsors: Spencer Swalm (R-HD 37), Balmer, Chris Holbert (R-HD 44), John Soper (D-HD 34)

Senate Sponsors: Lois Tochtrop (D-SD 24)

This bill caps requires the PUC “to establish a maximum retail rate impact of 1 percent of the annual total base rate electric bill for each customer” for the cost recovery of HB 1365.

The interesting part about this bill is its bi-partisan support in the House and an electric ratepayer advocate sponsor democrat Lois Tochtrop in the Senate.

Prediction: Leadership in both the House and Senate will provide cover for Xcel and environmentalists as they did last year. This won’t pass; too many special interest groups have too much invested.

HB12-1121 PUC Hearings Utilities Ratepayers’ Bill of Rights

House Sponsors: Ray Scott  (R-HD 54)

Senate Sponsors: None

This bill declares that the interests of ratepayers are not recognized at Public Utilities Commission (PUC) proceedings, therefore:

  • Investor Owned Utilities (IOU), such as Xcel Energy, must consider the interests of ratepayers as well those of shareholders.
  • The PUC must “require” IOUs to focus on the needs of consumers including “providing reasonable rates, improved customer service, and fair treatment.”
  • “Transparent and understandable” rate increase information including “using advanced-information processing capabilities” to estimate the cost to specific consumers rather than the hypothetical consumer average.
  • IOUs cannot pass along to ratepayers the cost of research and development.
  • IOUs cannot pass along to ratepayers the cost of complying with environmental regulations that have not been enacted by the federal government.
  • IOUs cannot pass along to ratepayers the cost of legal fees associated with pursuing rate increases.
  • PUC must protect ratepayers by adhering to a least cost principle for energy rates.

The bill does a couple of good things including forcing Xcel and the PUC to acknowledge how much energy policies will cost actual consumers rather than the nebulous “average ratepayer.” Also, it will prohibit Xcel from collecting costs of imposing regulations such as the “phantom carbon tax” that aren’t actual federal environmental regulations. We’ve written about the insidiousness of the carbon tax in detail here and here.

Prediction: Xcel, natural gas, House leadership, and new energy economy advocates will oppose HB 1121. Therefore, it won’t get out of the House Ag Committee, but we hope we are wrong.

HB12-1123 PUC Report to the General Assembly on Rate Case Hearings

House Sponsors: Kathleen Conti (R-HD 38), Jon Becker (R-HD 63), Paul Brown (R-HD 59), Brian DelGrosso (R-HD 51), Holbert, Carole Murray (R-HD 45), BJ Nikkel (R-HD 49), Robert Ramirez (R-HD 29), Scott, Ken Summers (R-HD 22), Swalm, and Libby Szabo (R-HD 27).

Senate Sponsors: None

This bill requires the Director of the PUC or his designee to report annually to the joint House and Senate transportation committee regarding public information on rate cases decided by the PUC during the previous two years. Also to be included in the report, the economic impact on ratepayers.

Prediction: It will pass the House because it has good support from Republicans including leadership with Rep Nikkel, House Majority Whip, as a co-sponsor. The Senate will be more interesting because the green-at-all-cost lobby enjoys a majority and doesn’t want anyone questioning the PUC about costs of the new energy economy. The debate will be transparency versus environmentalists. Leaning toward enviros but being an election year, anything could happen.

HB12-1172 Electric Rates in Connection with Greenhouse Gas Emissions

House Sponsors: Swalm and Conti

Senate Sponsors: None

This bill does two things. First, it prohibits the “phantom carbon tax” unless imposed at the federal level.

The enabling legislation passed in 2008 despite overwhelming Republicans opposition. Fast forward to 2011, the first time that Rep Swalm tried to repeal Colorado’s $20 per ton carbon tax, and some Republicans now embrace a carbon tax as we exposed when covering the vote on Swalm’s HB 1240.

Second, the bill prohibits an IOU from imposing tiered rates based on monthly consumption.

Tiered rates are anti-family and anti-consumer. With Xcel asking for an interim rate increase due to TOO MUCH energy and not enough demand, tiered rates are also hypocritical as I wrote several days ago.

Prediction: This bill is too pro-consumer, pro-ratepayer to pass. The HB 1365 lobby likes the carbon tax and Xcel Energy. Both will make sure it gets killed.

Several Final Points

After last year’s legislative session, we said that the unreported story of Colorado energy policy was that a few brave legislators had the courage to go on the offensive against anti-consumer energy policies. Judging from the bills above, this year will see more legislators joining the fight. We’ve written before that it is easy to get angry with special interest groups and Xcel Energy, but the responsibility really lies with elected officials and the PUC. It appears that some legislators have sensed the outrage and look to address problems we’ve been reporting for the last two years.

With his name on three of the five bills, Spencer Swalm emerges as the champion of Colorado ratepayers.  He stood up to leadership in his own party last year, and with more legislation this year Swalm proves he is willing to stand up again on behalf of ratepayers who have no voice in the new energy economy. Representatives Kathleen Conti and David Balmer get honorable mention.

What’s missing from the 2012 legislative session? A discussion over whether or not the PUC should be elected or appointed. Rep Conti introduced legislation last year that was killed in the House transportation commission. Based on how the PUC commissioners have politicized themselves by crafting legislation rather than sitting as objective regulators, it might be time for Colorado voters to determine the direction of the PUC.

Check back to the energy policy blog. We’ll keep track of these bills so you don’t have to.