Our state’s electricity ratepayers have barely begun to pick up the tab for sweeping, new air mandates fast-tracked into law by the General Assembly in 2010. The Clean Air Clean Jobs Act, which in part compelled the conversion of some power plants to costlier fuels, was ushered in without any meaningful debate to assess the likely impact on consumers.
Our own effort to project those costs—working with economists to forecast the state’s economic performance in light of the 2010 mandate—found in part that steadily rising power rates triggered by the act will eventually cost Coloradans $508 million in lost household income and result in more than 6,400 lost jobs over the next 10 years.
Now, consider that however high the toll ultimately rises for the 2010 state law, it likely will pale in the wake of pending new federal air standards. The U.S. Environmental Protection Agency’s Clean Power Plan threatens every type of consumer—residential, small business, agricultural and industrial—in every community in Colorado. That includes consumers served by public utilities, municipal providers and rural cooperatives. And the changes to Colorado’s statewide power generation contemplated by the EPA’s mandates may ultimately cost many billions of dollars.
In the legislative session that just concluded earlier this month, Colorado lawmakers had a chance to make up for their inattention in 2010 and get it right this time—at least, as far as implementing the impending federal standards. Unfortunately, lawmakers let that opportunity slip away.
What could they have done? While there is little likelihood that Congress will at this point be able to substantially rework the mandate at the federal level—notably, to make it more responsive to consumer interests—Colorado’s policy makers could have cushioned our state from the coming blow. Their best bet for doing so was Senate Bill 258, which unfortunately was derailed at the behest of the state House leadership.
The bill would have gone a long way toward assuring our state’s rank-and-file ratepayers a much-needed voice—a voice they don’t have under the status quo—in shaping the specific plan Colorado eventually will submit to federal authorities for ushering in the new EPA standards. While the federal rules are rigid and impose troubling expectations on states, Colorado at least had a shot at crafting a specific implementation plan that attempted to address its consumers’ wide-ranging concerns.
Among other provisions, SB258 would have allowed our state’s foremost authority on rates and reliability of electricity, the Public Utilities Commission, to review the draft plan and assess its impacts. Importantly, it also would have let the General Assembly review, amend and vote on the plan before submitting it back to Washington.
In other words, the legislation, which passed the Senate before facing summary execution in a House committee, would have introduced a badly needed dose of transparency and accountability into a process that currently is estranged from the very consumers who will bear the brunt of the new federal rules.
Time is now short to head off the current implementation approach, which largely will be directed in a vacuum by one state agency, the Department of Health and Environment. Despite the setback in this year’s legislature, the Colorado Consumer Coalition will continue to work with the broad and diverse range of groups that supported SB258 to try to ensure that the process for developing a state plan includes a consumer voice.
There was one bright spot for power consumers in this year’s session. The General Assembly agreed to move the Office of Consumer Counsel—a decades-old advocate for ratepayers—forward into the modern era with a more focused mission. Senate Bill 271, now on its way to the governor, would largely free the office from involvement in the telecommunications market while leaving intact the office’s advocacy for power and gas ratepayers.
Electricity and natural gas service in Colorado remain very much tethered to the regulated-utility-based delivery system. The PUC—and the Office of Consumer Counsel—remain the most effective tools for shielding consumers from rate hikes. Accordingly, that’s where the consumer counsel should be training its sights.
In other words, the core mission of the office is as important now as it ever was, but the priorities for carrying out its mission must evolve. That is why the office should concentrate its efforts on Colorado’s electricity ratepayers, who face much steeper price increases on their electricity bills than their telephone bills.
There’s no indication yet whether Gov. John Hickenlooper will sign the proposal. We urge his support.