(Image Credit: Michael Sandoval)

The Independence Institute’s Energy Policy Analyst Michael Sandoval delivered this statement to the Environmental Protection Agency’s November 16 hearing in Denver, Colorado on the agency’s proposed federal plan and model trading rules for the Clean Power Plan:

In its December 2014 comments, the Colorado Department of Public Health and Environment, the Colorado Public Utilities Commission, and the Colorado Energy Office all maintained that ‘In Colorado, the PUC has exclusive statutory authority to regulate the IOUs and associated electric resource decisions’ and that ‘depending upon the plan elements proposed by Colorado, legislation may be needed to clarify or direct state agencies on their respective roles and authorities’.

In a proposed mass-based emissions allocation trading market to trade eligible resource credits (ERCs), who is the market maker? It would appear to require institutional apparatus of some sort–what enabling legislation in Colorado is required? In other states? If no legislation at this level is required, why not?

Markets are complex and difficulty in trading–what are the rules? how are the rules established? Who handles disputes and is the ultimate arbiter? How are the credits created in the trading mechanism?

The Independence Institute is a free market think tank interested in promoting the free market in energy resources, but as nice or well-intentioned a trading market for ERCs sounds at first glance, it becomes evident that government-created “markets” are simply picking energy winners and losers, often arbitrarily, often without actual considerations of cost or impact, but rather to self-serving goals contained within a given policy, such as the Clean Power Plan. When those transactional costs of trading ERCs rise, who will pay them? The inefficiencies won’t be borne at the administrative or even generating level, but by the ratepayers and taxpayers, not all of whom will be prepared for the rising costs of the Clean Power Plan itself, much less in terms of wealth transfers from state to state as the trading scheme expands.

So far, as with much else from the rollout of the Clean Power Plan, the timeline for market creation is heavily compacted. Information from CDPHE in September on question of trading was light and unhelpful. As it appear now it is a scribbling of generalities, and it is difficult to comment because it appears to be more like a make-up-as-you-go, details to be sketched in later program that will prove harder, more expensive, and more nuanced than any central planning or federal trading scheme could possibly account for ahead of time.

These comments, of course, fall into the requisite acknowledgement of the ongoing legal, technical, and other shortcomings of the overall Clean Power Plan. Proposing a FIP and trading scheme would appear to be adopting a one-size-fits-all scheme to hasty environmental and electric generation planning at federal and state levels, and an expansion of EPA control over generation, distribution, and energy choice at the state level.

Compressing the timeline in 2016 will leave states scrambling without guidance ahead of their initial state plan submissions in 2016. Complicated mechanisms like a credit trading scheme, besides being legally or technically burdensome, surely deserve a measured approach. Concerns about the CPP or a credit trading system will continue with retards to electric reliability and electricity prices, something the state of Colorado has indicated is a foremost consideration, should we be able to take the state’s agencies and political establishment at their word.

Finally, all portions of the CPP must and should address the regressive nature of raising electricity prices on the nations’ poor, minority, elderly, and other vulnerable communities.

Thank you.

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The Denver Business Journal captured some other responses at Monday’s EPA Clean Power Plan hearing:

Kim Stevens, Environment Colorado:
“We’re already seeing the impacts of climate change here in Colorado, from drought to floods, and these extreme weather events will only get worse without bold action to slash carbon pollution.”

Laura Comer, the Sierra Club’s Beyond Coal campaign:
“The Clean Power Plan shows that the United States has a real, enforceable plan to curb dangerous carbon pollution and that we are truly to committed to combating climate disruption. We cannot let attacks from big polluters and their allies lessen our chances of a strong international agreement and undermine the safety of our communities.”

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More reaction in the Denver Post:

“The EPA regulations will cost Colorado jobs, will cause electricity prices to soar and threaten the reliability of the electrical grid by mandating a wholesale restructuring of our electricity system for no appreciable benefit to the climate,” Colorado Mining Association president Stuart Sanderson said.

Sanderson and National Mining Association officials pointed to industry-backed studies saying power costs for residents of Colorado and other states would increase by around 30 percent between 2022 and 2030.

The plan leaves it to states to implement changes subject to EPA approval. EPA officials have said they will take into account each state’s current energy mix. If a state fails to act, federal officials would impose “an implementation plan” on that state.

The feds held the hearings on implementing the plan in Pittsburgh last week and, after Denver, will hear from residents in Atlanta and Washington D.C. A second day of comments are scheduled to continue Tuesday morning in Denver.

Sanderson called the Clean Power Plan a “stealth energy tax” for Coloradans.***

Many folks who push for clean energy or regulations like the EPA’s Clean Power Plan say that these programs will create jobs–but they never seem to remember the jobs these anti-energy choice mandates end up killing, like the more than 200 jobs Union Pacific will likely slash due to decreases in coal transportation in Colorado:

Union Pacific this week notified workers it will shutter its Burnham Shop repair yard in central Denver, putting more than 200 jobs on the line and darkening a piece of Colorado history.

Operations at Burnham will halt Feb. 14, the Omaha-based railroad said.

“The well-documented decline in the coal carloadings in Colorado — a result of natural gas prices and regulatory pressure — has diminished the need for locomotive repairs and overhauls in the Denver area,” Calli B. Hite, a Union Pacific spokeswoman, said in an e-mail to The Denver Post.

Loaded coal trains originating in Colorado have decreased 80 percent since 2005, Hite wrote.

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Earlier this week, the Colorado Oil and Gas Conservation Commission held hearings on new fracking rules, including limiting hours for fracking operations and setbacks for development:

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The Bureau of Land Management has stirred up controversy over 65 existing oil and gas leases with a new environmental impact statement that puts nearly half at risk:

The Bureau of Land Management released a draft environmental impact statement (EIS) Wednesday that put 65 existing oil and gas leases on White River National Forest land under the microscope. The agency found that 25 leases in the controversial Thompson Divide area must be either wholly or partially cancelled.

This long-awaited decision was embraced by conservation groups, and panned by the oil and gas industry.

The rub was over the legality of these leases, which are owned by Houston-based energy companies SG Interests and Ursa Resources, and have been scrutinized for years. Many conservation groups have said that the leases were issued without undergoing the proper environmental evaluations.

The BLM draft EIS backs that position, and now a 49-day public comment period will begin on Nov. 20 and will run through Jan. 8, 2016.

“We appreciate the effort of the local community in this discussion,” said BLM Colorado State Director Ruth Welch in a prepared statement. “We will continue to work toward finding a path forward that balances energy development and conservation, while recognizing the White River National Forest’s planning efforts.”

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The Sierra Club Rocky Mountain Chapter would like the entire state of Colorado to be 100% renewable, beginning with Denver. Becky English, the executive committee chair for the Sierra Club, responded to an email about a sustainability summit scheduled for early December in Denver:

I would have liked to share that the Sierra Club national board has declared a goal of powering the electric sector by 100% renewable energy nationwide, and that the Rocky Mountain Chapter has adopted the goal for Colorado. I will approach you offline about how best to work toward this goal in Denver.

The “Sustainable Denver Summit” on December 3rd will feature Denver Mayor Michael Hancock:

Sustainable Denver Summit Program
AGENDA:

8:00 – 9:00 a.m. – Registration, Continential Breakfast, and Exhibition Space

9:00 – 10:00 a.m. – Opening plenary session – Remarks from Keynote Speaker and Mayor Michael B. Hancock

10:00 a.m. – Breakout Sessions –

• Energy – Focusing on issues of energy efficiency, renewable energy, use of energy in mobility, and air quality and greenhouse gas reduction

• Water – Focusing on both water quantity and water quality, including climate change resilience

• Materials – Focusing on cradle-to-cradle materials management issues, including environmentally preferable purchasing, recycling, composting and by-product synergy

• Mobility – Focusing on providing multiple interconnected mobility modes that are cleaner, safer, cheaper and more efficient than the current system

12:30 – 1:30 p.m. – Luncheon and Sustainability Awards – Awards will be presented to the 2015 Sustainable Denver Award winners

1:45 – 3:45 p.m. – Breakout Sessions Reconvene

4:00 – 5:00 p.m. – Closing Plenary Session – Report out on commitments

They should probably also feature a breakout session on how these programs will make the city of Denver–not to mention the entire state of Colorado under the Sierra Club’s plan–less affordable for low income and minority populations.