ENERGY BILL IS A TROJAN HORSE FOR HIGHER RATES, UNEMPLOYMENT
House Bill 1365, the so-called Clean Energy and Jobs Act, made its way through the legislature in record time; the result of a closed door deal brokered by oil and gas lobbyists, Xcel Energy, and the Governor. Anyone who might have voiced a concern about this bill – other utilities, electricity consumers, labor, and the business community, were deliberately shut out. We need to pass this bill immediately, state officials say, or the sky will fall.
Such false claims of urgency were simply a pretext to ram a bill through the legislature before the public could discover all of its flaws. As Coloradans will soon find out, HB 1365 is a Trojan Horse for higher unemployment and dramatically higher electricity rates from natural gas, which costs 300% more than coal. It also won’t deliver what it promises, a reasonable solution to Colorado’s air quality problems because it fails to examine readily available lower cost alternatives.
Speaking of the Trojan Horse, the mythical underpinnings of HB 1365 are set out below.
Myth Number 1 – “We need to convert coal power plants to natural gas in order to deal with oxides of nitrogen (NOx) emissions.” According to a study by Thomas Hewson just released by the American Coalition for Clean Coal Electricity, switching to natural gas will cost Colorado energy consumers $2.3 billion during the period 2015-2020; retrofitting the existing power stations with additional NOx controls while continuing to use coal would cost less than $134 million. That’s a difference of $2 billion!
Myth Number 2 – “Pass the bill or the Environmental Protection Agency (EPA) will slap us with emissions controls and fines from Hell.” Only they don’t tell you what these emissions controls are likely to be, and that is because the federal government has not yet adopted new stricter standards for ozone, just to name one example. Meanwhile, emissions contributing to regional haze have declined in Colorado, according to the Colorado Department of Public Health and Environment. Even if EPA intervenes, at most Colorado might have to submit a compliance plan. That’s it; no fines, no fire and brimstone. Colorado is not alone; 36 other states are facing the same challenge and none are proposing such radical changes in energy policy.
Myth Number 3 – “Cutting out coal use along the Front Range will solve our air quality problems.” But Colorado must address emissions from mobile sources like automobiles. Don’t think for a minute that EPA will let Colorado off the hook just because it ends coal use.
Myth Number 4 – “Colorado’s coal industry won’t be hurt because the plants only burn Wyoming coal.” Not true. The Cherokee and Valmont stations burn almost exclusively Colorado coal, about 2.6 million tons annually. Can we make this up on the export market? No way. Colorado’s export coal market has declined by more than 20% in the past five years. It doesn’t take an expert to figure out you can’t sell that amount of coal into a down market. And Xcel’s new plant, Comanche 3, will only use coal from Wyoming.
Myth Number 5 – “The bill will only require the Public Utilities Commission to study alternatives and is not an anti-coal bill.” If that were true, then Xcel could have accomplished its objectives without legislation. By tilting the playing field in favor of natural gas, the legislation allows Xcel to stick ratepayers with all of the increased energy costs.
Myth Number 6 – “Passage of this bill will add “clean energy” jobs in the gas industry in Colorado.” But at what cost? According to the Hewson study, the retirement of the coal plants would result in a net loss of 523 jobs at the mines, the railroads and the power plants. The bill robs Peter to pay Paul, eliminating good mining jobs in the process that pay wages and benefits in excess of $96,000 annually. And, by the way, there is no guarantee that the gas jobs or production will come from Colorado. Why do you think the American Natural Gas Alliance – an organization headquartered in Washington, DC – ran all of those ads urging HB 1365’s passage?
Colorado’s electricity consumers are among the biggest losers. Converting the plants to natural gas will cause rates to increase substantially, possibly as high as $14 per megawatt hour (MWh), according to the Hewson study. Retrofitting existing stations with NOx controls would cost less than $2 per MWh. Isn’t that reason enough to study this matter further? But a solution will only emerge if Colorado lawmakers and the Governor let the public have a say, not just the special interests that will reap the windfall that this Trojan Horse will create.
Stuart Sanderson, President
Colorado Mining Association
