UPDATED: This story has been updated to reflect an amendment to House Bill 1269
The energy conversation in Colorado was dominated this week by a lengthy debate in the legislature on raising the renewable energy requirement for rural electric cooperatives.
Senate Bill 252, sponsored by Senate President John Morse, D-Colorado Springs, and House Speaker Mark Ferrandino, D-Denver, would raise the state’s rural renewable energy standard to 25 percent.
Rural cooperatives are currently required to meet a 10 percent standard, implemented under a 2007 bill that requires the percentage by 2020. But Democrats believe it is time to bring rural cooperatives on board with a 25 percent statewide standard.
The measure would also increase opportunities to capture vented methane gas from active and inactive coalmines, as well as landfills. It adds two new sources to the renewable energy list, including coalmine methane and pyrolysis, which is burning trash without oxygen.
It would specifically target the Sedalia-based Intermountain Rural Electric Association, which serves ratepayers in counties south of Denver, as well as Westminster-based Tri-State Generation and Transmission Association, serving customers in 18 rural cooperatives across Colorado. Those coops have more than 100,000 meters and supply electricity on behalf of member cooperatives.
The legislation passed the Senate on Monday by a vote of 18-17. Every Republican rejected the measure, and two Democrats joined with them — Sens. Mary Hodge of Brighton and Lois Tochtrop of Thornton.
Despite the two dissenting Democrats, the party is largely in agreement on the measure.
“This bill will help clean our air while providing rural jobs,” Morse said following the vote. “Renewable energy prices are dropping consistently, while the cost of fossil fuels is unstable. We need to make this investment now to ensure that energy prices stay steady and we are not relying on dirty fossil fuels.”
Several Democrats on Monday night rose to speak in favor of the measure during the nearly three-hour third-reading debate. Sen. Linda Newell, D-Littleton, suggested that the measure is necessary for the future of Colorado.
“My special interests are not only my kids and my grandkids, but all the kids, so we can grow up in a beautiful state — or some of us grow older in a beautiful state — and also to keep the state beautiful to attract tourism… especially in rural Colorado,” stated Newell.
Sen. Jessie Ulibarri, D-Commerce City, attempted to address concerns that have been raised by opponents, who say the providers would have to spend billions of dollars in order to comply with the proposal. That, in turn, could be passed along to ratepayers, say opponents.
But Ulibarri said there is a greater good: “I’ve heard… concerns expressed by my colleagues about the impact of this bill on the poor… I’ve grappled with this issue…” he addressed his colleagues.
“But what’s the impact on our poor communities when we continue to use dirty energy?” Ulibarri continued. “I know what those impacts are. I’ve seen those kids go to hospital rooms because they can’t breathe air; choking on the air we’ve produced for them because we want to continue our dependence on dirty forms of energy.”
Democrats suggest that utility bills would not go up by more than 2 percent as a result of the measure. They say many utility bills would stay the same, or even decrease over time.
Pete Maysmith, executive director of Conservation Colorado, applauded the Democratic-led Senate for passage of the measure, suggesting that it would put the state on the right track toward energy independence.
“This legislation increases access of clean power to all of Colorado, expands local homegrown energy and opens up new generation markets in capturing methane and power from municipal solid waste,” attested Maysmith.
Fears over implementation and costs
But Republicans are emboldened by fears raised by the providers themselves. The utilities say they were never brought into “secretive” negotiations with bill sponsors.
Lee Boughey, spokesman for Tri-State Generation and Transmission Association, said rural providers are already moving forward to meet the requirements under the existing 2007 renewable energy standard for electric cooperatives.
“In 2007, the state’s electric cooperatives worked closely with the legislature and governor on the current standard, which recognized the difference between urban and rural communities and utilities,” said Boughey.
He believes Democratic leaders are rushing the bill through the legislature without input from all stakeholders. Considering the utilities would have less than seven years to implement the new standard, Boughey believes their input is vital.
“The bill’s six-and-one-half-year implementation timeframe to increase the standard by 150 percent is unprecedented, unachievable and irresponsible,” he declared. “This unworkable bill demonstrates the sponsors’ failure to engage those affected and shows a lack of understanding of electric utilities.”
Providers are also frustrated that there would be no cap on utility rate increases that could result from the use of fossil fuels, while the measure would impose a 2 percent cap on rate hikes from renewables.
“The cost cap is flawed,” opined Boughey. “The bill’s significant costs include not just the additional cost of renewables — most likely wind — but also the cost of natural gas generation to balance it and the transmission lines to connect it. There is no production credit available after this year, making the costs of wind power significantly higher.”
Former Sen. Mike Kopp, R-Littleton, who now serves as the manager of corporate affairs for the Intermountain Rural Electric Association, raised similar concerns.
“Senate Bill 252 really represents the worst possible kind of legislation for Colorado: The bill was secretly hatched behind closed doors and will profit a favored few,” attested Kopp.
“It sticks the Coloradans who were left out, forgotten, and can least afford it with a huge bill; it doesn’t give Coloradans anything they don’t already have; the subject matter itself has been so obviously and grossly misunderstood and misrepresented by key supporters that even fairness in debate has gone by the wayside; and worst of all, it cynically insulates those from the sponsors’ districts from its economic impacts,” the outspoken former Senate minority leader continued.
Republicans echoed many of the concerns raised by the utilities, suggesting that Democrats are trying to ram the legislation through in the waning days of the legislature.
“This bill hurts the poor, the farmers, the elderly and those on fixed incomes,” said Sen. Steve King, R-Grand Junction, who led an eight-hour filibuster of the bill on April 12 during second reading. “By dictating to utilities and customer-owned cooperatives in rural Colorado that they must increase their renewable standard, middle-class families who can’t afford another $20 increase in their monthly utility bills get hurt.”
Sen. Ted Harvey, R-Highlands Ranch, lashed out at Democrats during floor debate on Monday: “We can talk about how this is a jobs bill, we can talk about how this is going to help Colorado’s environment — but the only jobs we’re going to create are by the huge multi-national renewable energy companies outside of the state of Colorado. That’s not going to help our environment …” exclaimed Harvey. “I hope you’re proud of yourself.”
Hodge, who is a member of the Rural Electric Association, said she could not bring herself to back the measure, and so she joined with the other side of the aisle in opposing it.
“I think it’s too much too fast,” said Hodge, who pointed out that many of the rural providers already have renewable projects underway. “I’m worried about costs, I’m worried about how fast they’re demanding it happen when it’s happening in the real world anyway.”
The measure now heads to the House for debate.
Other energy bills moving
An increased renewable energy standard wasn’t the only energy measure to move through the legislature this week. Lawmakers also debated bills that would increase oil and gas well inspections, increase fines on the industry and create more stringent standards for reporting spills.
Senate Bill 202, sponsored by Sen. Matt Jones, D-Louisville, would require the Colorado Oil and Gas Conservation Commission to use a risk-based strategy for inspecting well sites, and have enough inspectors to inspect each location once per year.
The measure passed the Senate Wednesday by a vote of 22-11, with two lawmakers excused. Republican Sens. Greg Brophy of Wray and King joined with Democrats in backing the measure.
“Our priority should be protecting the health of Coloradoans and our environment, over maximizing oil and gas production,” said Jones.
His Boulder County has been resistant to increased oil and gas activity, including the controversial hydraulic fracturing process. Longmont voters supported a ban on the practice, which is currently being challenged in court.
“One only has to look at Longmont’s Rider well, which had cancer-causing benzene in shallow groundwater almost 100 times the state standard, to know that state inspectors are not looking closely enough at well equipment,” Jones continued. “This bill helps us achieve our No. 1 priority, which is to keep Coloradans safe.”
Brophy broke with his party because he believes the intent of the bill is productive, despite having voted against the measure when it was up in the Senate Agriculture, Natural Resources and Energy Committee. He said the bill now has a focus on using a risk-based strategy, which caused him to change his vote.
“The effective part of the bill was to develop a risk-based strategy for inspection. I thought that was a good idea,” he said. “I’m anxious for them to do that… at this point it becomes a good idea.”
SB 202 now heads to the House for debate.
Meanwhile, the lower chamber on Monday approved House Bill 1267, which would increase industry maximum fines from $1,000 per day to $15,000 per day, and set a minimum fine of $5,000 per violation per day. The measure would also repeal the current maximum total fine cap of $10,000.
The House backed the measure by a Democratic party-line vote of 35-27, with three lawmakers excused. The measure now moves to the Senate for debate.
“This bill will help us hold irresponsible oil and gas operators accountable,” explained the bill’s sponsor, Rep. Mike Foote, D-Lafayette. “It will protect Colorado jobs. It will also protect public health and safety and the state’s clean air and water.”
The House on Friday also backed House Bill 1278 on a vote of 39-24. The legislation would require an oil and gas operator to report an oil or waste spill of one barrel or more within 24 hours. Rep. Diane Mitsch Bush, D-Steamboat Springs, sponsored the measure.
Other energy bills moving through the legislature include :
• House Bill 1269, sponsored by Foote and Jones, which would have originally prohibited a newly appointed COGCC commissioner from being employed by an oil and gas operator. The measure has been amended to allow a COGCC commissioner to be employed by the oil and gas industry, but would tighten rules on the disclosure of such relationships. The measure has passed the House and is awaiting debate in the Senate; and
• House Bill 1268, sponsored by Rep. Dominick Moreno, D-Commerce City, which would require sellers of real estate to disclose any mineral rights associated with the property. The measure unanimously passed the House and is awaiting debate in the Senate.
One last oil and gas bill, House Bill 1275, sponsored by Rep. Joann Ginal, D-Fort Collins, did not make it through committee. The measure would have authorized a review of health data related to the effects of oil and gas operations in Larimer, Weld, Boulder and Arapahoe counties. The measure was killed on April 11 in the House Health, Insurance and Environment Committee.