The putative mission of HB 1365 is for Colorado to address “reasonably foreseeable” federal air quality regulations in a holistic fashion, which is supposedly more cost-effective than a piece-meal approach. When it rolled out the legislation, the Ritter administration told the PUC that there were eleven “current and foreseeable air quality requirements (see slides 13 and 14).” As is explained here, this was a gross misrepresentation; in fact, there were in fact only two such regulations in the federal pipeline: “regional haze” and ozone.
Make that one. Yesterday, the EPA again delayed a decision on whether to tighten the National Ambient Air Quality Standard for ozone. A rulemaking was expected this month, but the EPA said it needs more time to ensure that they are relying on the best science possible, and it suggested that it won’t act until July. This is the third time that the EPA has delayed this determination since HB 1365 was enacted.
The prevailing interpretation of the delay is that President Obama is tacking right economically in the wake of last month’s shellacking at the polls. As such, it is almost inconceivable that the EPA won’t kick the ozone can further down the road, at least through the next election cycle, unless the President decides against running for reelection in 2012.
The upshot is that a tightened ozone standard is no longer “reasonably foreseeable.” This means that HB 1365, in practice, calls for a $1.3+ billion electric resource plan in order to head off a single pending regulation, regional haze. Without a doubt, this would be the most expensive regional haze implementation strategy in the country, which would seem to contravene HB 1365’s stated purpose of being cost-effective.
This is the sort debacle that is likely to occur whenever legislation is passed under false pretenses, like HB 1365. When gas companies first pitched fuel switching to Governor Ritter on July 27, 2009, their power point presentation stressed that the goal was compliance with the Governor’s Climate Action Plan, because natural gas is about half as carbon intensive as coal.
The original impetus for HB 1365, therefore, was climate change mitigation. However, the political winds at the time were unfavorable to climate legislation. In late June 2009, the U.S. House of Representatives narrowly passed a cap-and-trade bill; a month later (the same month that gas companies pitched fuel switching to the Governor), the national news cycle was dominated by hostile “townhall” meetings held by Members of Congress, during which angry constituents railed against federal policies, including cap-and-trade.
In the face of this cap-and-trade backlash in the summer of 2009, fuel switching proponents knew that climate legislation would be a dead letter in Colorado General Assembly, so they re-framed the imperative. Instead of taking on global warming, HB 1365 was advertised as a remedy for Big Brother. The legislation was sold as a necessary evil in the face of a supposedly imminent EPA crackdown on coal.
Of course, there was one problem—Big Brother wasn’t so big. The regulatory threat posed by the federal government was vastly overblown. Unfortunately, Coloradans are finding this out only after the fact.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.
