Put down the crayon and back away from the budget. That is Denver Post columnist Megan Schrader’s parental advice to the Independence Institute in a nutshell. It would take too long to deconstruct all that is wrong with Ms. Schrader’s editorial on our proposed ballot title “Fix Our Damn Roads,” but as head of our energy policy center, I will address what is glaringly wrong with her cursory review of HB17-1116 “concerning the continuation of energy-related assistance to low-income households” and our involvement with it.
For background, our initiative to “Fix Our Damn Roads” relies upon the Colorado legislature doing its job and prioritizing our state budget to put funding for roads and bridges ahead of other pet projects like rich guys getting money for Teslas and slasher movies.
Schrader suggests that just because roads are now “in the mix” things won’t change and “to pretend a different outcome…isn’t realistic.” As proof, she mentions HB17-1116, which extends funding to the Colorado Energy Office, an agency we suggest should be prioritized out of the state budget. The bill passed out of the Democrat-controlled House without – get this – “Caldara nor anyone else from the institute was at the Capitol to testify against HB 1116.”
It wouldn’t be the first time we decided better use of our resources was via voters rather than the legislature.
The biggest problem with Ms. Schrader’s analysis is that she misses the obvious. Why is the state legislature considering HB17-1116 in the first place? The answer is state lawmakers are trying to solve a problem – high electric bills – for which they are responsible! It’s legislative atonement for a 67 percent increase in electric rates, nearly twice the inflation rate and nearly three times the rise in median household income. Senior energy policy analyst Michael Sandoval reported Colorado’s skyrocketing electric rates about this time last year.
How did it happen? Four words: The new energy economy.
Over the last decade, the so-called “new energy economy”, a spate of 57 plus different pieces of legislation championed by former Governor Bill Ritter and continued with Governor John Hickenlooper, former PUC chairman Ron Binz, and a significant number of legislators, intentionally moved the state away from a least cost principle, enriched the state’s largest monopoly utility Xcel Energy, and drove low-income Coloradans into energy poverty. Essentially the state legislature incentivized utilities to drive up electricity rates through wind and solar mandates, demand side management programs, fuel switching, and building unnecessary capacity.
Our 2013 analysis showed in one year alone, the “new energy economy” cost one group, Xcel ratepayers, $484 million – more than 18 percent of Xcel’s total electricity sales. Based on 1.4 million ratepayers, that’s $345 per ratepayer in just one year. No wonder they need help paying their bills.
The legislature sends ratepayer dollars up to Xcel shareholders, then tries to atone for it by sending taxpayer nickels back down to low-income ratepayers. It’s perverted.
Pueblo consumers have been hurt the most. While people love to blame Black Hills, the real villains are elected officials and Xcel Energy.
Ask Sharon Garcia, a working mom in Pueblo, how the new energy economy and the legislature’s favoritism toward Xcel have treated her. If you haven’t read her story in the Washington Post, you should. Below is an excerpt:
PUEBLO, Colo. — Sharon Garcia is stumbling around her dining room in the dark, trying to find Post-It notes.
As she has for years, Garcia wants to affix the notes, marked with dollar signs, to light switches all around her house. The message to her five kids: Light is expensive.
“Why do you need to turn the lights off?” she asks her son, Mariano.
“Because otherwise there’s no money,” he answers, dutifully.
“And when there’s no money?”
“You can’t feed us or take us anywhere.”
It’s not just the light switches, though. Ever since her power was shut off in 2010, Garcia has adopted a Depression-era obsessiveness: She doesn’t use the oven in the summer, because it heats up the house, and uses only one small air conditioner. Even the aquarium goes dark when someone’s not in the room.
“If we’re not in here looking at the fish, it shouldn’t be on,” she says. Oh, and forget about machine-washed dishes; Garcia does them by hand (the battle is evident in the pile at the sink). The toaster and microwave bear sticky notes ordering the user to unplug them afterward, lest they continue drawing energy from the sockets. “You think turning it off is enough, and it’s not,” she admonishes.
And yet, no matter how much she rations and cuts, Garcia cannot keep ahead of the fast rise in rates. She runs a daycare out of her home, so her monthly bill of about $200 is already higher than average in Pueblo, where the residential rate per kilowatt hour has risen 26 percent since 2010 — and on a per-household basis, is now among the highest in the state (which seems odd, consider her rent for the house is only $850).
Garcia’s extreme frugality is, in part, the result of coal plants shutting down as Colorado transitions to renewable energy. But in Pueblo, it happened in a way that has left poor consumers gasping for relief.
To a wealthy community, skyrocketing electricity rates might not have much of an impact: When you have a decent-paying job, what’s a few more dollars a month on your utility bill?
Pueblo is not that kind of place.
Sharon Garcia and others are the result of intentional policy that came out of the state capitol, supported by Xcel. Instead of putting a taxpayer subsidized band-aid on legislatively induced energy poverty, we suggest the legislature not create energy poverty in the first place through legislative preferences enacted by the Public Utility Commission and exploited by the monopoly utility.
It’s not that Independence Institute doesn’t think low income Coloradans need help with their electricity bills, because we do based on what the state legislature has done to them. We just think the best solution is for the legislature to reverse its decade of bad policy that favored Xcel over ratepayers. Further, if we must fund assistance programs to low income Coloradans, the nickels that trickle down to ratepayers should come from Xcel shareholders’ dollars rather than taxpayers’ dimes.
Back to what spurred this discussion, our ballot title “Fix Our Damn Roads” that serves as a viable alternative to HB17-1242, which is an effort to raise the state’s sales tax by 21 percent. Once again, we see the legislature considering policy that hurts low and middle income Coloradans the most. Perhaps the next act of atonement will be the sales tax assistance program.