Expect drilling, Clean Power Plan bills, but green agenda in Colorado limited
by Allen Best
Legislation about how much say-so local governments have in drilling for oil and natural gas may be hashed out in the Colorado General Assembly this year. And expect to see bills that revolve around the Clean Power Plan.
But for those interested in advancing environmental goals, it will be a modest year. While Democrats have a majority in the House of Representatives, Republicans have a plurality in the Senate.
“Any big step we try to make is going to die in the Senate,” says Max Tyler, a Democrat who has carried significant environmental bills in past sessions, including the 2010 bill that boosted the renewable portfolio standard, or RPS, to 30 percent for Xcel Energy and Black Hills Energy, the two investor-owned utilities in Colorado.
With Republicans generally opposed to far-reaching environmental legislation, says Tyler, a small-business man from Lakewood, bills must meet at least one of two criteria: 1) They must advance a conversation in a way that people understand, even if the bill dies in the Senate. 2) The proposal must be something that Republicans can buy into, too.
“If you put out a bill that talks about feed-in tariffs, that bill wouldn’t go anywhere. Nobody knows what the heck a feed-in tariff is,” says Tyler of the subsidy device offered in some locations to encourage renewable energy. “So there’s not much of a message, and it won’t pass. Why waste your energy on that?”
Colorado’s fracking debate
Drilling, though, will undoubtedly return to the legislative chambers after a year’s hiatus. At issue is how much authority local governments should have in controlling where, when, and how drilling—including hydraulic fracturing—occurs. The state maintains that constitutionally it has authority, and Gov. John Hickenlooper points out this prickly fact: under Colorado law, minerals are considered private property.
But several cities along the northern Front Range have asserted they should have much greater authority—including the right to deny drilling within their borders.
Dueling constitutional amendments were being readied for the 2014 election ballots and TV advertising blitzes conceived when Hickenlooper got the warring camps to agree to let an ad hoc committee seek middle ground. By many accounts, the 21-member Colorado Oil and Gas Task Force made progress with its February 2015 report, but fell short of solutions that ameliorated concerns of local interests concerned about impacts.
Eight potential constitutional amendments about oil and gas drilling are reported to be in the wings for consideration by voters in November.
“It’s hard to say what to expect,” said Tyler in an interview with Mountain Town News just before Christmas.
Clean Power Plan
The Clean Power Plan will also spark a lot of bluster and perhaps bills. The plan issued by the U.S. Environmental Protection Agency requires greenhouse gas emissions associated with electrical production be reduced overall 32 percent by 2030.
While Colorado is considered to be in generally good shape to meet the requirements, environmental organizations agree it’s not enough—and also expect pushback.
“I think we will see things that try to make it really difficult to implement the plan,” says Becky Long of Conservation Colorado. “This is part of a national trend, pushing back against the EPA and framing regulations to protect our air and water quality as scary and awful.
Tyler expects legislation that essentially says that the plan is “a good start but not necessarily a finish.”
In his view, Colorado should take more of a leadership role, although it’s unclear what that means in practice.
Despite his success in 2010 in increasing the RPS for Xcel and Black Hills, Tyler says he doesn’t think there’s appetite for another increase in the RPS in this session. Instead, groups such as Western Resources Advocates say they’ll be on guard against efforts to retreat from existing goals. “We want to make sure it doesn’t get weakened,” says John Nielsen, energy program director for Western Resource Advocates.
(On Thursday, the Environment Foundation, an of the Aspen Skiing Co., announced a $10,000 grant to the Conservation Colorado Education Fund for an effort to increase the RPS in Colorado; another $5,000 was given by Aspen to Environmental Colorado to build support for effective implementation and defense of the Clean Power Plan in Colorado).
Tyler does see support for legislation that nibbles at the edges of carbon consumption in places that the Clean Power Plan does not, including heating homes and the transportation sector. He has met several times with major environmental groups, who offered about 30 ideas for consideration.
One possible tweak, for example, involves the tax credit for buying alternative fuels vehicles. Tyler used that credit when buying the all-electric Nissan Leaf. “But it was a real difficult process to claim that credit,” he says. He hopes for legislation that smooths the bump in that road.
“It fits in the category of something that could get bipartisan support and pass through both the House and the Senate,” says Will Toor, director of the Southwest Energy Efficiency Project’s transportation program.
A “green bank” revolving fund, similar to something already in place in California and New York state, to provide assistance in making energy efficiency improvements, was also mentioned by Tyler and several groups.
New York’s Green Bank website describes it as a “state-sponsored, specialized financial entity working in partnership with the private sector to increase investments into New York’s clean energy markets, creating a more efficient, reliable and sustainable energy system.”
It could be coupled with the refinements in the property assessment programs pioneered in Boulder and now expanded to various counties, including several mountain communities: Eagle, Pitkin, and Gunnison.
An alternative to the green bank, says Tyler, is increased tax credits for energy efficiency improvements.
Also expect legislation that addresses where solar gardens can be erected. The impetus comes from a case in Weld County, which has been considering legislation that would allow solar gardens only on land that is zoned for industrial uses. “That would limit the range pretty substantially,” notes Tyler. As the Greeley Tribune reported in December, that would preclude about 75 percent of Weld County. Oil-and-gas activities, however, are permitted on agriculture lands.
Groups, such as Rocky Mountain Institute, would also like Xcel and other utilities to be required to embrace more solar gardens.
You may also expect to see another bill – as proposed last year by Sen. Kerry Donovan, a Democrat from Edwards, to provide aid for Colorado’s coal miners. Demand for coal has declined to the lowest point in 30 years, partly because of competition from low-priced natural gas and, increasingly, renewables, but also because of environmental considerations.
“We should be working on retraining those workers,” says Tyler. Donovan’s bill last year was defeated by a party-line vote in a Senate committee.
But a number of proposals probably won’t get introduced. Tyler last year introduced a bill that proposed to modify how investor-owned utilities are regulated. This “utility of the future” bill was approved by the committee he chairs on a party-line vote, but got no further.
However, discussion about how regulation of electrical utilities should be reformed continues. Many experts, including Ron Lehr and Ron Binz, both of them former chairmen of the Colorado Public Utilities Commission, believe in the need for fundamental reform and have been involved in something called the America’s Power Plan.
“The fundamental recommendation that we made is that regulation needs to spend more time looking forward and less time looking back,” says Lehr.
The model of the past century has been that the more the meters of customers spin, the more the utility earns. That has been amended in many ways in recent years through incentive programs, but the two former PUC chairmen argue that a fundamental decoupling of profits with volume needs to occur.
Tyler expects discussions in the next months with Xcel that would nudge Colorado to a model adopted by Minnesota. There, Xcel agreed to step toward performance-based regulation.
Some environmental groups have been thinking deeply about the dense realm of utility reform. Nielsen, from Western Resource Advocates, says he doesn’t believe there is need for broad, overarching overhaul of the statutory framework for regulation by the Colorado Public Utilities Commission. “I think there’s enough authority that the PUC can start to introduce some of these ideas on its own,” he says.
Nielsen would like to see more performance-based regulation of utilities, introducing more deliberately clean energy investment as part of the rate-making progress.
Dan Cross-Call, manager of RMI’s electricity practice, hopes to see more transparency of operations of the electrical grid at the distribution level, to help identify opportunities for cost reduction—and ultimately programs that yield reductions in demand with no loss in services.
With a national purview, Cross-Call and others from RMI think a lot about reform of PUC regulation. It’s needed, says Cross-Call, “but changes come from a lot of different corners,” and not just legislative action. “It can also come from the governor and from the commissioners themselves,” he says.
Environmental groups will also be pushing back against some proposals. Toor, of SWEEP, expects another proposal this year that would earmark a substantial portion of the Colorado Department of Transportation budget with the intent of building additional highway capacity, particularly along I-25 north of Denver.
Adding highway lanes when C-DOT is hard-pressed to maintain what already exists would be unwise, says Toor. And SWEEP also wants to see alternatives to highways. “I think it is a big mistake to think we will solve traffic problems by adding highways lanes,” he says. “The only way we solve traffic problems is by giving people options, and by pricing and new technology, not by adding more lanes to our highway.”