Environmentalists differ on bill to speed closing of coal plants
A bill that seeks to give Colorado communities with coal-powered plants a soft landing if the plants are retired early got panned last week at a legislative committee hearing by some of the communities in northwest Colorado that it seeks to help.
Representatives from communities with coal-fired power plants said they feared the measure might provide an incentive for utilities to prematurely close their plants, accelerating the harm to local tax bases and economies.
The bill, the Colorado Energy Impact Assistance Act, also drew rebukes from one of Colorado’s most vigilant anti-coal activists, Leslie Glustrom.
The measure would apply mainly to Xcel Energy and would allow investor-owned utilities closing aging coal-fired plants to add special fees to the bills of customers to refinance the closed plants at lower costs. The fees would kick in when a closing plant still has “stranded” assets on its books that ratepayers must pay back. It would give the utility the authority to use the fees to back low-cost bonds.
“Utilities can reinvest these dollars in much more productive new investments, like (Xcel Energy’s new) Rush Creek wind farm. Consumers pay back the bonds at much lower interest rates, so they save a lot,” explained Ron Lehr, a former Colorado Public Utilities Commission chairman and a proponent of the bill in an e-mail after the hearing.
Lehr, a former regional director of the American Wind Energy Association, teamed with Ron Binz, also a former PUC chairman also active in renewable energy, and several others to push the bill.
Xcel has at least a minority stake in a large fleet of aging coal-fired power plants in Colorado: two units at Hayden, three at Craig, three at Comanche in Pueblo, Pawnee at Brush, plus units at both Valmont in Boulder and Cherokee north of downtown Denver. Valmont exhausted its coal earlier this year, and the final unit at Cherokee is transitioning to natural gas, a process expected to be completed by the end of 2017. All except for Comanche 3, which was completed in 2010, were built between the late 1950s and early 1980s.
The bill could, in theory, also apply to Colorado’s other investor-owned utility, Black Hills Energy, but Black Hills does not have aging power plants in Colorado.
A co-sponsor in the House, Rep. Chris Hansen, assured members of the House Transportation and Energy Committee last week that the bill was neutral about plant closings and technologies.
“It is not a statement about whether they should or should not,” said Hansen, a Democrat who represents Denver’s Washington Park neighborhood. “It’s not picking winners and losers.”
The bill would also set aside 15 percent of the savings achieved by refinancing to assist communities that lose their coal-fired power plants. Half of the property taxes collected for the Moffat County School District, in northwest Colorado, come from the three coal-fired power plants at Craig and the associated coal mines. One of the three plants is scheduled to close in 2025 to help Colorado improve air quality currently out of compliance with federal laws governing regional haze.
Testimony at the hearing suggested a traditional coal vs. renewables fracture line. It was echoed in the party-line split, Democrats with yeahs and Republicans with nays both in the committee hearing and later in the House vote. It is now before the Colorado Senate, where Republicans are in a majority. As such, the proposal is expected to die.
At the committee hearing, Diana Orf, representing the Colorado Mining Association, said the bill didn’t deserve forward movement.
Her son, Richard Orf, representing the Associated Governments of Northwest Colorado where several major coal-fired power plants are located at Hayden and Craig, did acknowledge the intent of the bill to provide a portion of the money to towns impacted by closing of plants through provisions to retain workers and help provide money lost to local schools and other districts. But he said the local governments he represents fear the bill will lead to premature retirement of coal-fired power plants and loss of jobs.
Colorado had 1,086 coal miners as of December, according to the Colorado Division of Reclamation Mining & Safety. The bill, however, only addresses power plants, not mining. The federal Bureau of Labor Statistics reported, 6,603 employees in power generation and supply in 2015. That would also include natural gas plants as well as wind farms.
While emphasizing that the solar industry now employs more than 6,000 people in Colorado, Rebecca Cantwell, of the Colorado Solar Energy Industries Association, described the bill as seeking to provide flexibility in the transition of energy sources.
Union representatives, including individuals who had worked at power plants, offered support for the bill—and implicitly the energy transition to renewables.
Environmental groups endorsed the bill. Theresa Conley, advocacy director of Conservation Colorado, said the bonding capacity would move Colorado toward a “clean, renewable energy future in a smart and well-planned way.” Ron Larson from the Colorado Renewable Energy Society credited the proposal for its effort to train workers for new jobs with good wages.
But Glustrom and two others from Boulder vigorously panned the bill. Glustrom explained that she has intervened in cases before the Public Utilities Commission for 15 years. In 2004, she was an outspoken dissident as main-line environmental groups in Colorado were fashioning compromises with Xcel Energy, Colorado’s largest power provider, that allowed Xcel to build the Comanche 3 power plant.
Glustrom charged that the bill “shifts all the responsibilities of the investor-owned utility to the ratepayers.” She also said urged distrust of the bill’s proposal to give the Colorado PUC purview of the process. She charged that the state agency has allowed utility “profits to soar” even while authorizing the utility—obviously a reference to Xcel Energy—to build excess capacity.
“Any parent knows you don’t let a child get away with making bad decisions,” she said.
She described the bill as fish bait. “Please don’t take this worm off the hook,” she told the committee members.
They did anyway, at least the eight Democrats. But Rep. Terri Carver said she would oppose it unless she could be assured that the state government wouldn’t be the ultimate financial backstop. A Republican from Colorado Springs, she apparently wasn’t satisfied with the explanation Hansen gave, as she went along with the four other Republicans in opposing it.
That same partisan dividing line was apparent on Monday when the full House gave its approval. The bill is being heard this afternoon in the Senate State, Veterans and Military Affairs Committee, where it is expected to die.
Photo of Xcel’s Comanche generating station by Allen Best
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