Empire Electric opposes SB 252
I am very concerned with special interests in Denver collaborating with primarily urban legislators to ram through legislation Empire's members do not agree with. Senate Bill 13-252 imposes draconian renewable energy mandates on Empire that will raise electric rates.
It is sponsored by Senate President John Morse (D-Colorado Springs), Senator Gail Schwartz (D-Snowmass), Speaker of the House Mark Ferrandino (D-Denver) and Representative Crisanta Duran (D-Denver). The bill was introduced April 3 and had its first committee hearing April 8, only five days later. In contrast, SB 13-001, a much less controversial bill on tax credits for working families, was introduced January 9 and had its first hearing April 3, three months later.
This gave the electric co-ops no time to review the bill, which was written behind closed doors by special interests and legislators, or to thoroughly understand all of its affects and costs for members. It is important to remember that electric cooperatives supported a bill in 2007 to impose a 10 percent renewable energy standard on ourselves. This bill was not imposed lightly - cooperatives worked with legislators, the Governor's Office, renewable-energy advocates and environmentalists to craft workable legislation that achieved goals we all agreed on.
But this bill is now being rushed through the legislative process without the benefit of an open and honest dialogue. Instead of being referred to the Senate Energy Committee, which has some familiarity with energy issues and electric cooperatives, it was sent to the Senate State Affairs Committee. This is the committee handpicked by Senator Morse to approve controversial bills at his direction.
SB 252 directs Tri-State Generation and Transmission to generate 25 percent of the electricity it sells in Colorado from defined renewable resources. It adds two new sources to the approved list, methane captured from coal mines and electricity generated from landfill waste using a process known as pyrolysis. While it is a good idea to utilize these new technologies, neither of those new resources have a significant availability in Colorado at this time. The bill also requires cooperatives to achieve at least 1 percent of their retail sales from expensive distributed generation.
Defenders of the bill claim that rural consumers shouldn't be concerned about higher electricity costs because there is a rate cap to protect them. However, President Morse couldn't accurately explain how the cap works in the hearing and later amended the bill to clarify that it would actually compound over the six years the cooperatives have to comply. In fact, even he acknowledged the increase will be well over the 2 percent he stated at the beginning of the hearing.
Given the very short time frame it had, Tri-State ran the requirements of the bill through some standard industry models to estimate rate impacts. It estimates the bill will cost rural consumers $8,000 per meter, on average. How do they arrive at this figure? Tri-State will have to buy or build new renewable resources. It will have to also retire existing coal plants early that still have years of useful life. Why? Because at this point Tri-State has more than enough generation resources to meet its members demands. Tri-State will be paying twice for the same amount of generation. But wait, because renewable resources are intermittent, meaning they only produce power when the wind blows or the sun shines, Tri-State will have to purchase or build additional gas generation to back up the new renewables. So, in effect Tri-State will be paying three times for the same amount of electric capacity.
Under the bill, Tri-State must pass these costs to only their Colorado member systems, because the bill prevents the expenses from being divided among all 44 of Tri-State's member owners, which includes cooperatives in New Mexico, Wyoming and Nebraska. Tri-State estimates the total cost of SB 252 to be between $2.9 billion and $4 billion. That is a lot of money, folks.
All of this was done without consulting with the rural cooperatives that have to implement this mandate or the rural consumers required to pay for it. Why not consult with our consumers and directors? One member of Senate leadership recently told NPR that she had more important thing to do than consider the needs of rural special interests.
As a co-op director from the Eastern Plains said during the hearing, "No bill should be passed without a thorough understanding of its consequences to all parties involved." Both the substance of SB 252 and the questionable "back-room deal" manner in which it was introduced are reasons enough to oppose it.
Finally, responses to Empire's last member survey revealed that while 8 percent said to not exceed the state mandate, 77 percent said to not raise rates to exceed it. It was clear direction to the board to stay the course at a 10 percent mandate from renewable resources by 2020, not 25 percent.
Contact your legislator and let them know your opinion (pro or con), but you better hurry. SB 252 is on a fast track and could be law by the time you read this.Neal Stephens is general manager of Empire Electric Association, Inc.