Despite close to seven hours of testimony on SB13-252, a bill to raise the renewable energy mandate 150 percent on rural electric co-ops, it is very clear that the bill’s prime sponsors Senate President John Morse (D-Colorado Springs) and Senator Gail Schwartz (D-Snowmass) do not understand their own bill and didn’t bother to consult those who can comprehend the complexity of this legislation.  It passed out of committee on a party line vote.

The bill was heard yesterday in the Senate State, Veterans, and Military Affairs Committee. Members include:

• Senator Angela Giron, Chair, (D-Pueblo) and a bill sponsor
• Senator Matt Jones, Vice-Chair, (D-Louisville) and a bill sponsor
• Senator Ted Harvey, (R-Highlands Ranch)
• Senator Evie Hudak (D-Westminster)
• Senator Larry Crowder (R-Alamosa)

What the sponsors say it will do:

• Imposes a mandate on rural electric co-ops forcing them to get 25 percent of the electricity they supply to members from government-selected “renewable” sources, such as wind and solar by 2020.
• Removes the in-state preference for the 1.25 kilowatt-hour multiplier.
• Expands the “renewable” sources to include coal-mine methane and municipal waste.
• Increases the retail rate impact from 1 to 2 percent, which Sen. Giron calls “acceptable.”

What the bill really will do:

• Despite no projected fiscal impact to state government, it will cost co-op members anywhere from $2 billion to 4 billion, more than $8,000 per meter, including those in 10 of Colorado’s poorest counties.
• Removes the in-state multiplier because current law is unconstitutional. The state is being sued over it and doesn’t want to lose, which would force the state to pay attorney’s fees.
• Drive jobs out of the state because of high electricity costs.
• “Blow up the electric co-operative business model.”
• Likely force the state to spend taxpayer money defending this new law in court.
• Devastate rural economies.
• Drive up the cost of business for Colorado’s farmers and ranchers at the same time they are suffering through a devastating drought.
• Force co-ops to try to comply with a law that well could be a “physical impossibility.”

General observations

• So many people showed up to testify that the hearing had to moved to a larger room, and still an over-flow room was needed to accommodate the crowd
• Neither Senator Morse nor Schwartz could answer basic questions about the rate cap and indicated the committee would hear from “experts” who could answer questions.
• All three Moffat County Commissioners showed up to testify against the bill.
• Tri-State Generation, wholesale power supplier owned by co-ops, and every electric co-op that testified stated they were not consulted at all regarding the bill despite their repeated attempts to engage with sponsors once they heard legislation would be coming.
• Bi-partisan opposition
• Partisan support
• Senator Harvey was the best-prepared legislator.

Below are highlights and lowlights of SB252 testimony.

Forced to admit:

Senator Harvey asked Senator Morse if the electric cooperatives were ever consulted regarding SB 252. Morse couldn’t say, “yes,” so he answered with a long-winded “no.”

Former Public Utilities Commission (PUC) Chairman Ron Binz, who resigned under the cloud of an ethics complaint, acknowledged that Xcel Energy may well benefit by selling “renewable energy credits” (RECs) to Colorado’s rural co-ops in order for them to comply with this law.

Senator Ted Harvey asked several supporters of SB 252 if they would support the 150 percent mandate increase if they didn’t benefit directly from the bill. The answer: “No.”

Senator John Morse stated if the “market” wanted a renewable mandate we would have one. But since the market doesn’t, government must force it.

Supporter and former state representative Buffy McFadden, current Pueblo County Commissioner, said she wasn’t sure if renewable energy would “go to market” if government didn’t force it.

“Two percent rate cap” comes under fire:

Senator Harvey asked sponsors to explain the two percent rate cap. They couldn’t.

Under pressure from Senator Ted Harvey, PUC Executive Director Doug Dean struggled to explain the total cost of the Colorado’s renewable energy mandate and the two percent rate cap. Dean finally acknowledged that the two percent rate cap only applies to “incremental costs,” and followed up with “it’s pretty complicated.”

Binz perpetuates the 2 percent rate cap myth. Says in testimony, “as an officer of the state,” the PUC and Xcel do not mislead the public on the cost of renewable energy.

Four hours later, Independence Institute energy policy analyst William Yeatman directly addresses Binz’s misleading characterization of how Xcel recovers the total cost of the renewable energy mandate. Yeatman clarifies using real numbers: two percent of Xcel’s retail electric sales in 2012 was $53 million, which was captured in the Residential Electric Standard Adjustment (RESA). Another $291 million, not subject to the rate cap, was captured through the Electric Commodity Adjustment for a total of $343 million or 13 percent of retail sales.

Senator Harvey asked Yeatman to explain how the PUC allows this. Yeatman responded that the budgetary trick was likely the result of a dichotomy between PUC staff that acknowledges the public may be “laboring under the misapprehension of a two percent rate cap” and the Commissioners who allow it to occur.

Good points:

Rich Wilson, CEO of Southeast Colorado Power Association, to bill sponsors: “you just blew apart the non-profit electric cooperative model.”

International Brotherhood of Electrical Workers pleads with the committee “don’t pass this bill.”

Kent Singer, Executive Director of Colorado Rural Electric Association (CREA), to bill sponsors and supporters, “even after five hours of testimony, I don’t think you have a clear picture of how this [SB252] works.”

Singer continues, had sponsors come to us, we could have explained it, but they NEVER did.

Singer: two percent rate cap is far more complicated than Ron Binz would lead you to believe.

Dan Hodges, Executive Director of Colorado Association of Municipal Utilities, responding to inquires about why Senator Morse would exclude his own utility owned by the city of Colorado Springs:  the state constitution excludes municipal utilities from state regulation because they are owned by their citizens. “it’s unconstitutional” to draw municipals into this…”I don’t think it is appropriate for rural electric cooperatives to be drawn in either” because they are owned by their members.

Disgrace:

Binz belittles non-profits cooperatives and their members: “Tri-State [Generation] doesn’t have the state’s interest in mind.” Tri-State is owned by electric cooperatives, which, in turn, are owned by members. Most of those members are rural Coloradans.

Senator Gail Schwartz said her neighbors in Aspen and Snowmass want more options for and access to renewables such as solar panels.  My question: Why don’t they just pay for it?

Justifiably irritated:

Dave Lock, Senior manager, government relations for Tri-State, addresses Binz, “you can be damn sure Tri-State cares about Colorado.”

Lock responding to Binz’s disbelief about Tri-State’s $2-4billion analysis. “We only had five days,” which included a weekend because we were never allowed at the table.

Classic:

Moffat County Commissioner Tom Mathers, “I own a bar. I’d like to mandate that everyone drink 25 percent more.”

John Kinkaid of Moffat County “we aren’t contributing to your [Denver’s] brown cloud.”

War on Rural Colorado:

All three Moffat County Commissioners John Kinkaid, Tom Mathers, and Chuck Grobe echoed the theme that SB 252 is an assault on rural ratepayers and equivalent to “war on rural Colorado.”

Sad:

Norma Lou Murr, a Walsenburg senior citizen on a fixed income, waited patiently for hours to testify. When her turn finally came, she asked the committee “to look very seriously” before raising her electric rates.

The way the state legislative Democrats are handling this legislation is similar to how they handled gun control – leave those most impacted out of the conversation and then completely ignore their concerns during testimony.