Guest Column: Colorado’s cruel preferred-energy policies
March 10, 2014
Environmental doomsday prophet Dr. Paul Ehrlich wrote in 1975 that, “Giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun.”
That’s a cruel statement directed at people who simply want electric lights so their children can read at night, a refrigerator to keep food from spoiling or a heater to keep their homes warm during the winter.
Yet it seems to be the approach of Colorado’s environmental left. Part of the problem is progressive leaders’ extremely narrow definition of “clean” energy that limits resource choices to more costly and unreliable wind and solar.
In 2004, Colorado voters approved Amendment 37, requiring Xcel Energy and other investor-owned utilities to use renewable (or preferred) sources such as wind and solar for 10 percent of the electricity sold to end users.
Since then, the legislature has mandated increases in the renewable energy standard, to 20 and the current 30 percent by 2020. Only Maine (40 percent by 2017) and California (33 percent by 2020) have more aggressive mandates. They also have higher electric rates than Colorado.
Last year, the legislature passed a 20 percent preferred energy standard on Colorado’s rural electric cooperatives. Now nearly the entire state must pay for a significant percentage of electricity produced predominantly from preferred “clean” sources, wind and solar.
Since producing electricity from wind and solar is more expensive, Colorado’s electric rates have gone up. Not too long ago, our state had some of the cheapest electricity in the United States. In 2000, Colorado’s residential rates were 7.31 cents per kilowatt hour, equivalent to 9.89 cents in 2013 dollars. Coloradans now pay 11.91 cents per kilowatt hour for residential electricity, the highest rate in the Mountain West. California, Alaska and Hawaii are the only Western states with higher rates.
Colorado’s electric rates are rising significantly faster than most states. Last year, rates nation wide increased 2.4 percent, compared to a 4.5 percent jump in Colorado.
These high rates couldn’t come at a worse time. The Denver Post recently reported Colorado’s labor participation rate has fallen 6 percentage points since 2006, to its lowest level (67.3 percent) since 1976. And the number of Coloradans on food stamps continues to mark all-time highs, Complete Colorado reports. The second week of February saw a 42 percent increase in Coloradans asking government to help pay their heating bills, according to 9News.
The legislature had an opportunity to modestly improve the situation. Rep. Lori Saine, R-Dacono, introduced a bill that would have added hydroelectricity to “clean” energy. Despite bipartisan sponsorship, lobbying from the wind and solar industries and their advocates in the environmental nonprofit world doomed Saine’s bill in committee.
Many states, including those in the eco-friendly Pacific Northwest, the Center for American Progress, the Environmental Protection Agency and our own Colorado Energy Office all consider hydro to be a clean, renewable source. Our state’s extremely narrow definition begs the question of whether progressive lawmakers simply seek to protect the wind and solar industry at the expense of ratepayers.
A 2012 Independence Institute study showed Xcel Energy ratepayers spent $343 million to comply with the preferred energy mandate, much of which ended up as surplus, because supply exceeded demand. That’s $245 per ratepayer — nearly two months of average Colorado electricity bills — for electricity they didn’t use.
Affordable power is not mutually exclusive of clean power. Colorado should expand the definition to include clean coal, natural gas, hydroelectric and nuclear. We also should encourage a least-cost principle and let consumers decide.
Anything else is just cruel.
Amy Oliver Cooke is the executive vice president and director of the Energy Policy Center at the Independence Institute, a free market think tank in Denver.