House Bill 1365 pits state's coal and natural gas industries

The Clean Air - Clean Jobs Act is causing the coal industry to burn

By Ashley Chase Sinclair

A bill in the state Legislature which aims to clean up Colorado’s air has muddied up the political landscape for two of the state’s preeminent fuel industries — coal and natural gas.

House Bill 1365, sponsored by Reps. Judy Solano, D-Brighton, and Ellen Roberts, R-Durango, would assist Xcel Energy, the state’s largest utility, in switching three front-range coal-fired power generation plants to natural gas by 2018.

Dubbed the Clean Air-Clean Jobs Act by backers, the bill — supported by Gov. Bill Ritter — is viewed as a solution to the challenge of addressing harmful pollution from aging, high-emitting coal-burning power plants. The bill has already cleared the Colorado House of Representatives by a vote of 53-12.

But the Colorado Mining Association says the bill, which has been on the fast track and is now being considered by the senate, was crafted in secret. Stuart Sanderson, president of CMA, says that his organization was “blindsided” by the legislation which he contends would severely reduce the use of affordable coal-based electricity on Colorado’s Front Range, thereby causing a massive spike in energy prices for Colorado families and businesses.

“This bill is the unseemly product of backroom deals cut by lawmakers and lobbyists that actually gives electric utilities the ability to charge Coloradans more to cover the cost of modifying power plants to switch from coal to more expensive natural gas,” says the mining organization.

In fact, Sanderson says, Colorado gets 65 percent of its electricity from coal, and as a result pays an average of 8.6¢ per kilowatt hour for electricity as opposed to the national average of 9.9¢ per kilowatt hour. The cost of producing electricity from natural gas combined cycle plants could be as high as 300 percent more expensive than electricity produced from existing coal plants.

Xcel Energy acknowledges that customer rates could increase 4 to 6 percent because of restrictions on haze, ozone and mercury levels, but the utility points out that its comprehensive plan to combat the effects of pollutants could be less costly.

Sanderson says that the bill threatens jobs in Colorado’s coal industry.

The royalties and taxes paid by the coal industry exceeded $150 million in 2008, which supported public schools state, and local governments, Sanderson points out.

The legislation could reduce utilities coal fleet by 50 percent, which would dramatically reduce these revenues.

“Colorado is one of the largest coal-producing states in the nation. More than 43,000 jobs that pay an average of $65,000 are supported by coal mining in Colorado. Many of these jobs will be wiped out by HB 1365,” reads a memo from The National Mining Association in its lobbying efforts against the bill.

Since electricity is the cost of doing business for many small businesses in Colorado, this legislation, according to the mining industry, would also have a huge impact on the state’s future economic growth.

Sanderson’s proposal? More study is needed on the issue before passing any legislation.

What has transpired, Sanderson says, “is an effort to ram a bill through in ten days without real debate or inquiry into fuel switching.”

Sanderson adds that it is an obvious attempt to “push the anti-coal agenda before the elections” and he furthermore insists that the gas industry “is looking for (increased) shares of the market without having to compete for it.”

Colorado is quickly becoming a battleground state in this emerging feud among the different fuel industries, Sanderson says.

“Why harm one industry to benefit another? Energy policy should not be a zero-sum game like Ritter wants.”

Backers of The Clean Air-Clean Jobs Act point out that the Environmental Protection Agency plans to impose tougher rules for air quality and that the state must act now to avoid penalties and sanctions from the federal government.

Over the next several years, federal air quality standards are being updated to reflect findings from medical research that show — according to supporters of the legislation — “harmful health effects of pollution at levels below even current standards.” In anticipation that these air quality regulations will soon be more protective, the Clean Air-Clean Jobs Act puts Colorado far ahead of the curve so that the state will not be caught flat-footed, say proponents.

“If Colorado does not act soon, the federal government can and will step in,” predicts bill sponsor Solano. “We are sending a message to Washington. We’re not going to sit back and wait for looming federal mandates and we’re not going to wait for the feds to force us to pay hefty fines.”

Solano added that the proposed legislation will allow investor-owned utilities like Xcel Energy to help craft their own plans for how to meet new regional haze guidelines, as well as new mandates for ozone, mercury and carbon dioxide in one comprehensive analysis that will minimize costs and maximize emissions reductions.

Passage of HB 1365 is an opportunity to make significant reductions in harmful pollutants such as soot, haze and ozone that have devastating health impacts, particularly on the very young, supporters say.