Public Hearing for Performance-Based Ratemaking

Tell the House Committee that Utilities Should be Rewarded (or Penalized) Based on their Carbon Emissions
March, 25th, 1:30 pm
Colorado State Capitol, Room 0112
200 E. Colfax Ave, Denver

The Colorado House Transportation and Energy Committee will decide whether to move forward with HB 15-1250, which seeks to initiate an investigation into performance-based ratemaking. Tell the legislature that performance-based ratemaking should reward the utilities for reducing their carbon emissions.

Currently, most utilities’ profits are determined by how much capital they deploy, plus their allowed rate of return on that capital. In other words, the more they spend on their infrastructure, the more they are able to make. The idea behind performance-based ratemaking is to regulate the utilities’ profits according to how well they meet goals that we set for them. The goals or metrics can range from increasing reliability of the grid to reducing costs to increasing energy efficiency to reducing carbon emissions.

Once the metrics are determined, the utility either gets rewarded or penalized based on how well they adhere to the goals, as opposed to how much capital they deploy. The tricky part is making sure the goals explicitly include things that are important to us, like reducing their carbon emissions.

Colorado State Representative Max Tyler has introduced a bill that would require the PUC to investigate performance-based ratemaking based on a variety of metrics, including reducing carbon emissions.  We are happy to see that reducing carbon emissions is included in the list of metrics. It is crucial that minimizing carbon emissions remains a top priority.

If this bill passes, it will be the beginning of a process that can integrate metrics beyond short-term costs into the ratemaking process, including climate.

Tell the committee that regardless of whether or not they go forward with this bill, we need to integrate climate and public heath impacts into our electricity planning.

If you can’t make it to the hearing, please email the committee members:

max@maxtyler.us, diane.mitschbush.house@state.co.us, perrybuck49@gmail.com, jon.becker.house@state.co.us, terri.carver.house@state.co.us, don.coram.house@state.co.us, daneya.esgar.house@state.co.us, reptracy29@gmail.com, jovan.melton.house@state.co.us, dominick.moreno.house@state.co.us, patrick.neville.house@state.co.us, dan.nordberg.house@state.co.us, faith.winter.house@state.co.us

Want to learn more about performance-based ratemaking?

Tell Colorado to Regulate Downstream Fugitive Methane

Don’t Let Colorado AQCC Pass This Gas!

9:30AM Thursday, March 19th, 2015
Sabin Room, Colorado Dept. of Public Health & Environment

4300 Cherry Creek Drive South,
Denver, CO (map)
RSVP on Facebook

This Thursday, March 19th the Colorado state Air Quality Control Commission (AQCC) will be considering whether or not to regulate climate-changing downstream fugitive methane emissions.  Right now they’re only hearing from the oil and gas industry.  We need them to hear from citizens that care about stabilizing the climate too!

AQCC needs to hear from you NOW!

They will decide Thursday whether downstream fugitive methane warrants further study. If they say no, then this opportunity is lost, perhaps for a long time.

The meeting will begin at 9:00 AM, in the Sabin Room at the Colorado Department of Public Health and Environment, 4300 Cherry Creek Drive South in Denver. This agenda item will likely begin at 9:30 AM. There will be an opportunity for public comment after the staff presentation.  Add your name to our petition!

Tell Colorado to Regulate Downstream Fugitive Methane

Dear Commissioners,

I believe that reducing fugitive methane emissions from our downstream natural gas infrastructure is a modest but worthwhile strategy for reducing the climate impacts of our energy system. Measures to reduce fugitive methane emissions can and should be aggressively pursued by the state of Colorado, in order to reduce the climate impacts of producing and delivering natural gas.

I am pleased that the AQCC adopted rules to control emissions from upstream operations last February. When the AQCC handed down those rules, it directed staff to investigate what measures would be appropriate to take in minimizing downstream fugitive methane emissions. I am concerned that much of the information coming before you this week appears to be sourced directly from the industry we are asking you to regulate. I urge the AQCC to move forward with a comprehensive and independent plan to control downstream emissions.

We need strong oversight of the oil and gas industry throughout the supply chain, and we need to set a precedent of regulating their emissions specifically because of their climate impact. We need the AQCC to initiate an independent assessment of the emissions control options on the table, through its own investigatory and rule-making processes.

Thank you for your consideration.

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Climate Lobby Day

Speak up for the Climate on Capitol Hill

Thursday, April 30th
Colorado State Capitol
200 E. Colfax Ave, Denver, 80203

Join fellow Coloradans at the state capitol to lobby for bold action on climate change. We’ll start the day with a climate lobbying training, followed by speeches from legislators and climate advocates. Come tell your elected official why addressing climate change matters to you and why they should act boldly and swiftly.

More details will be announced soon. This event is hosted by 350 Colorado. Photo courtesy of Mark Danielson.

CEA Explains: What is a Carbon Budget?

Our civilization seems to be in the denial stage on that climate change thing. Even the folks that know there is a problem don’t seem to realize the speed at which we need to act to have a decent chance of avoiding some of the catastrophic effects of climate change. A good way to think about the emissions reductions required is by examining our global carbon budget, or the total remaining CO2 our civilization can emit. Listen in as we attempt to explain carbon budgets.

Losing at Monopoly: Big Money Will Go Up In Smoke On Stranded Coal Plants **PETITION**

Sign Here To Tell Colorado Decision Makers That Investing In Coal Now Is a NO-GO!

Xcel Energy plans to spend $400 million in upgrading two coal plants. As the US coal industry has taken an ominous nosedive, Colorado will face financial risk if these plants cannot be run. Renewables are cost-competitive with coal and natural gas and we know coal plants don’t balance well with renewables on the grid. In addition, coal plants need millions of gallons of water for cooling and climate change will not wait. It’s unconscionable.

STOP POURING MONEY INTO COAL PLANTS IN COLORADO

Dear Decision Makers:

First, thank you for your public service. However, I want to let you know that I strongly object to further investments in coal fired electricity, as Xcel Energy is currently attempting to do in Colorado!

Energy markets are undergoing tremendous change with the US coal industry nearing collapse while renewable energy prices continue to plummet. Above all, time is running out for us to address climate change.

Colorado needs to prepare for a bright future, not double down on the dirty energy of days gone by.

Xcel Energy’s plan to spend $400 million upgrading two coal plants, Pawnee and Hayden, is unacceptable. As the coal industry continues its decline those upgraded coal plants will become STRANDED ASSETS to be paid off with MY money and YOURS. These investments are chasing sunk costs, throwing good money after bad, when we should be working to move beyond coal as quickly as possible.

Energy efficiency, clean renewable power and electricity storage consume no fuel or water, are already cost-competitive, and should be favored by the PUC whenever the opportunity arises. The coal fired generation on Xcel's system cannot easily be used to balance with renewables on the grid, so further investment in coal impedes the integration of more renewable energy into our grid.

Again, we need to plan for the future, not pretend we're in the past. Please cancel Xcel's plans to upgrade Pawnee and Hayden.

Thank you for your consideration.

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For more background, see this searing review in the Denver Post by Leslie Glustrom, CEA’s co-founder:

Will coal investments become stranded assets?

A machine that no rational person wants to build is one that generates stranded assets — assets that become non-functional long before they have been paid for.

Unfortunately, customers of Colorado’s largest utility, Xcel, are bound to just such a “stranded asset machine,” given the poor decisions that the Public Utilities Commission is allowing Xcel to make.

Since the turn of this century, Xcel has spent about $1 billion on the Comanche 3 coal plant in Pueblo to serve the Denver-Boulder area, and now the Public Utilities Commission is turning a blind eye, yet again, while Xcel spends hundreds of millions of dollars on old Colorado coal plants in 2014 and 2015.

Under the current system, Xcel fully expects its customers to not only pay for these coal plant expenditures, but to also provide Xcel a return of between 7 percent and 8 percent on the money. In addition, Xcel will pass 100 percent of future coal costs through to customers under the Electric Commodity Adjustment mechanism.

This risk-free way of generating profit is good business as long as you can get the PUC to agree to it — which the PUC routinely does.

The financial world is abuzz with discussions of “unburnable carbon” and the need to avoid investments in fossil fuel assets that are likely to become stranded given the urgency of addressing the climate crisis.

None of this is being discussed as the Colorado PUC stands ready to approve hundreds of millions of dollars of expenditures on old Colorado coal plants as part of the ongoing Xcel rate case.

The PUC seems to have an unspoken rule that when you walk through the doors of the commission, all discussion and concerns about the planet and unburnable carbon will be left at the door.

In the 21st century, that is not only unconscionable, it is also leading Colorado into a very risky economic situation.

Even if there were no concerns about climate change, ocean acidification, boiling off Colorado’s precious water supplies to produce electricity, or the copious amounts of air, water and coal ash pollution created by coal plants, it still would be a bad idea to allow large investments in coal plants in the 21st century.

First of all, as the costs for wind and solar plummet and storage technologies evolve rapidly, the opportunity to move beyond coal for purely financial reasons becomes ever more viable.

Second, resources built in this century should be extremely flexible in their operation to match the variable nature of the wind and solar that Colorado is so blessed with. Flexible is precisely what baseload coal plants are not — and we shouldn’t be investing in them.

Finally, coal plants need a supply of coal to operate and the truth about coal is that most of the U.S. coal that can be mined at a profit is gone. The U.S. coal industry is running seriously in the red, stock prices have cratered, the largest companies are facing billions of dollars of debt and Wall Street has largely left the U.S. coal industry for dead. (For more depth, see here, and here, and here and here.)

Consequently, it is completely unclear who will be mining U.S. coal in the coming years and decades — what’s less for the five more decades that Xcel’s Comanche 3 coal plant is scheduled to operate.

Spending money on coal plants in light of these harsh realities is the height of economic (to say nothing of planetary) folly — but that is exactly what the Colorado PUC is letting Colorado’s largest utility do.

While the PUC is firmly keeping its eyes covered and its ears plugged to the realities of the 21st century, it is long past time that the state’s economic and political leaders took a hard look at the facts that the PUC is ignoring and put an end to Colorado’s stranded asset machine.

Accelerating the transition from fossil fuels to a clean energy economy