The Colorado Energy Office continues to show some irregularities in its spending and handling of tens of millions of dollars, according to a newly released performance audit.
A 2011 Independence Institute investigation of the CEO, formerly the Governor’s Energy Office, sparked the call for a 2012 audit by the Office of the State Auditor that found the agency was unable to demonstrate that $252 million in spending between 2007 and 2012 was done cost-effectively. It called for more transparency and accountability for the agency, which had been tasked, in part, to distribute millions of dollars sent to the state through the American Recovery and Reinvestment Act.
The December 2016 follow up to the original audit by OSA found that, “although the Colorado Energy Office (CEO) has made significant improvements in several key areas related to its core functions since the 2012 performance audit, additional improvements could be made to better ensure expenditures are properly approved and supported and contract monitoring activities provide maximum value to the State.”
The agency, established in 1977 and expanded in 1999 and 2005 by executive order, and codified by the General Assembly in 2008, was reorganized and renamed in 2012, with legislation that “secured, or guaranteed, state funding for the office for 5 years, through Fiscal Year 2017” with the Clean and Renewable Energy Fund and the Innovative Energy Fund that both sunset three weeks ago.
The expiration of funding beginning on January 1, 2017 and the new audit findings will likely prompt another round of legislation and conversation about the role of the office in Colorado going forward.
That conversation should include the eventual sunset or reduction in the agency’s scope. A regular dose of sunshine simply does not go far enough in addressing the proper role of an office given so much latitude and fed by taxpayer dollars. Fiscal year 2016 revenue for CEO included 52 percent from federal coffers, monies that the OSA audit said would eventually be depleted alongside the authorized funding streams from the 2012 reorganization.
As such, the office should not simply be a place for channeling federal slush funding, whether small, as it is now, or large, as it was under the stimulus funding of 2010-12. Nor should it be a place for regulators to manipulate the free market in energy or energy efficiencies based on professed beneficial regulatory intentions.
The CEO’s mission includes a call “[to] improve the effective use of all of Colorado’s energy resources and the efficient consumption of energy in all economic sectors, through providing technical guidance, financial support, policy advocacy and public communications.” That includes a vision to “help Coloradans live more prosperous and healthy lives by promoting innovative energy production and efficient energy consumption practices that are beneficial to the economic and environmental health of the state.”
The state already has other state-level agencies that duplicate many of the services the CEO defines as within its mission and vision. The Colorado Department of Public Health and Environment’s ostensible purpose is to protect the “environmental health of the state,” while other entities, like the Public Utilities Commission is tasked with regulating utilities and the state’s energy mix, including measures easily seen under “innovative energy production” and “effective use of all of Colorado’s energy resources.”