On Tuesday November 30, former Colorado Senator Tim Wirth wrote an op-ed for the Denver Post on Colorado’s “Clean Energy Economy.” The article, titled, “Leading the way to a sustainable energy future,” is mostly wrong.
To wit, he suggested that the 2010 Clean Air Clean Jobs Act (CACJA), legislation that effectively requires fuel switching from coal to natural gas, is a welcome alternative to “waiting for the EPA to mandate a plan to deal with air pollutants.” This is the same Big Brother bogeyman that the Ritter Administration used to push the bill through the General Assembly.
In fact, there is no federal crackdown. The CACJA furthers compliance with provisions of the Clean Air Act that afford Colorado great discretion in choosing pollution control strategies. As such, it was the Ritter administration’s choice to require ultra expensive coal fired controls. For political purposes, the Ritter administration pinned the blame for its onerous regulations on the federal government. This phantom federal threat, in turn, was the justification for fuel switching.
Senator Wirth got some things right. Twice he used the label “farsighted” as a description for Colorado’s clean energy policies. And he is correct: They are carefully crafted to postpone big costs well into the future, so as to protect the political well being of its proponents.
In Xcel’s preferred CACJA plan, for example, the large incremental increases in gas consumption don’t start until 2015. Sure, the legislation provides for a long-term gas contract, at a price likely three times that of coal, in order to guard against volatility. But in 2021, when the contract runs out, Colorado energy consumers will regret the CACJA (if not much sooner).
Consider as well HB 1001, a 2010 law requiring that utilities generate 30% of their electricity with renewable energy by 2020. This year, the costs seem manageable; in 2020, the price tag balloons to more than $700 million.
Then there’s smart grid. Already, the Boulder demonstration project costs more than $40 million, about three times more than originally estimated. The “Smart Grid City” serves a 1.5% of Xcel’s customers. Taking this policy state-wide is going to get very expensive.
The problem is that there is no accountability. By the time the true cost of these policies kick in, the governor and the General Assembly will be out of office. It is, therefore, ironic that Senator Wirth repeatedly stressed Colorado’s energy“”leadership,””a word he used six times. What kind of leader mortgages the future?
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.