GOP utility regulator in Arizona defends Colorado PUC chairman, power overhaul

The Republican head of the Arizona Corporation Commission – the equivalent of the Colorado Public Utilities Commission (PUC) – recently told The Colorado Independent that coal and mining industry attacks against PUC Chairman Ron Binz are “not plausible.”

Binz drew considerable coal industry heat in the lead-up to last week’s ruling by the PUC on a plan by Xcel Energy to shut down several aging coal-fired power plants on Colorado’s Front Range, convert another one to natural gas and build a new natural gas-fired power plant.

Seven Republican state senators accused Binz of bias for helping to negotiate the Clean Air, Clean Jobs Act last legislative session. Colorado is a top 10 coal-producing state, but mining industry officials claim they were left out in the cold by the deal, which had the backing of the natural gas industry, environmentalists and some Republicans in gas-producing areas of the state.

Natural gas burns about 50 percent cleaner than coal, and Clean Air, Clean Jobs was billed by Democratic Gov. Bill Ritter as a way for Colorado to lead the nation ahead of looming U.S. Environmental Protection Agency (EPA) regulations aimed at clamping down on nitrogen oxide and other emissions.

Kristin Mayes, the Republican chairwoman of the Arizona Corporation Commission, says officials in her state and others around the nation are closely watching the Colorado process as a possible model for similar legislation and policies.

“It may not look exactly the same, but we need to have some kind of statewide dialogue about what to do with our aging coal plants that are increasingly in the gun sights of the EPA,” Mayes said. “We can’t just whistle Dixie past the grave here. There are certain realities that have to be faced, including that the EPA doesn’t seem to be going away on issues like mercury and coal ash.”

Seven Republican Colorado state senators last month fired off a letter (pdf) to Ritter citing CRS 40-6-123 (1) — which dictates the PUC’s code of conduct on matters of conflict of interest or the appearance of impropriety — urging the governor to remove Binz as chairman.

“I have difficulty seeing how Chairman Binz can be an impartial judge in adjudicating a case that stems from a bill he himself negotiated and drafted, in concert with the utility they purport to regulate. Even if one is acting with the most noble of intentions, the appearance of impropriety is so great in this case that it taints not only this proceeding but possibly future proceedings conducted by the Colorado PUC,” read the letter.

It was signed by state Sens. Al White, Ted Harvey, Kevin Lundberg, Shawn Mitchell, Dave Schultheis, Mark Scheffel and Scott Renfroe.

The ultimately unsuccessful effort was lauded (pdf) by the Colorado Mining Association and a group calling itself Affordable and Reliable Energy Colorado (AREC). Both AREC and representatives of the Colorado’s coal mining industry have promised to continue to fight Clean Air, Clean Jobs – both philosophically and legally.

“Ron Binz is a very fair, pragmatic commissioner,” Arizona’s Mayes said. “I find this criticism of him to be not plausible, and frankly, it strikes me that [his critics] are going after someone who is merely doing his job.

“I can tell you that from a national perspective he’s very much in the mainstream. He’s a leader on these issues and the rest of us are watching how they’re doing it fairly closely because we think that by and large it’s a good process.”

Mayes is in the final weeks of her second term on the Arizona Corporation Commission, an elected and constitutional five-member board in Arizona, with terms limits of two four-year terms. Colorado’s three PUC commissioners are appointed by the governor.

Critics of Clean Air, Clean Jobs say Colorado lawmakers unfairly sided with one energy industry (gas) over another (coal), which will ultimately cost the state high-paying coal mining jobs and hit low-income consumers hard during a weak economy. Xcel rates are expected to go up about 2.5 percent a month after the $1.4 billion plan is fully enacted in 2017.

But advocates for Colorado’s low-income energy consumers say that in the long run Clean Air, Clean Jobs may wind up saving money for the state’s poorest residents. EPA regulation of aging coal plants is expected to add huge costs in terms of scrubbing technology meant to make the facilities more compliant with federal clean air laws.

“It’s clear not only from what I heard at the commission, but also at the legislature, that a change needed to happen in the way electricity is generated in order to hold costs down in the long run because of clean air requirements that are either in place now or looming,” said Skip Arnold, who advocates for low-income energy consumers as executive director of nonprofit Energy Outreach Colorado.

“My experience with Chairman Binz is that he has been very sensitive to the needs of low-income citizens in Colorado when it comes to the cost of home energy. As much as anyone he raises that issue, he responds to that issue and he has done many positive things since he’s been on the commission.”

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