Coalition of Ratepayers

EVA Confirms Fears: Electric Vehicle Mandate NOT Likely to Benefit Colorado

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Colorado’s Air Quality Control Commission (AQCC) is more than likely to adopt the Zero Emission Vehicle Mandate (ZEV) at its Friday, August 16th meeting (today). Not only will this put Colorado further under California’s thumb, it’s also likely to impact our state’s air quality and economy negatively.

The Freedom to Drive Coalition commissioned Energy Venture Analysis (EVA), a renowned energy consulting firm, to analyze the Colorado Department of Public Health and Environment’s (CDPHE) initial economic impact analysis of ZEV. Although EVA’s conclusions didn’t shock us, they may surprise the AQCC. We’ve been making similar points for months, and while we hope both elected and non-elected officials listen, that is simply a hope and a prayer.

One of EVA’s key findings is that adopting ZEV will likely increase Colorado’s auto emissions. To isolate the impacts of the mandate from the adopted Low Emission Vehicle rule, EVA’s model assumed ZEV would raise the price of all vehicles by $500. The result of this is a decrease in new cars being purchased, and people either retaining their older, higher emitting vehicles or buying used ones. Although mandating the purchasing of electric vehicles (EV) will remove a significant portion of gas-powered cars from the road, those remaining plus the new EVs will emit more emissions than the gas-powered ones taken off.

In fact, EVA found that if Colorado does not adopt ZEV, annual auto emissions would actually be lower: “The result of the analysis is that the cumulative emissions of the Used, BEV, and PHEV vehicles is greater than those displaced ICE vehicles.”

There is also the loss of gas tax revenue. Over the next 25 years, the Colorado Department of Transportation (CDOT) expects to face a $25 billion-dollar spending gap. Removing gas-powered vehicles from the roads – and ultimately from the pumps – means that CDOT’s funding issue will get worse. According to EVA, over ZEV’s lifespan, the state will lose $1.3 million a year. All this comes at a time when CDOT already cannot pay for needed maintenance, and the Democrat-controlled legislature is unwilling to provide additional funding for Colorado roads and bridges.

Electric Ratepayers should also expect an increase in their bills as energy providers rate base the construction costs of EV charging stations – an action allowed by Senate Bill 77 – and as new substations are built to accommodate the expected spike in electricity demand from charging EVs in residential areas. Just because CDPHE chose to omit these costs in its projections does not mean they don’t exist. EVA purports ratepayers can expect a rate increase of 7 percent as a result.

And then there are batteries. According to EVA, it is impossible to guarantee the cost of batteries will remain the same, or in the best-case scenario, decrease. Of course, the CDPHE assumed prices would fall, but considering China controls a significant portion of both the upstream and downstream battery supply chain, it cannot be assumed with the ongoing trade war that the number of batteries available today will remain constant or improve. If the Sino-American relationship continues to fray, the amount of EV batteries on the market could shrink and prices may skyrocket.

ZEV will also burden farmers, ranchers, and all taxpayers. This last legislative session, the General Assembly extended Colorado’s EV tax credits through 2025. If CDPHE’s estimate that 17,600 electric vehicles will be sold in 2025 is correct, and if all those purchasers cash in on Colorado’s electric vehicle tax credit, the state will forgo $88 million in tax revenue that year. Moreover, EVA predicts the mandate will increase the price diesel in addition to electricity rates. As a result, Colorado’s farming and ranching community may see annual energy expenditures increase by as much as $22.6 million.

Effectively forcing people to purchase electric vehicles is risky business. While Denver and Boulder may be able to afford it, the rest of the state cannot. EVA’s findings are certainly a cause for concern, as they show ZEV is fiscally and environmentally irresponsible for Colorado.

The information contained in this post can be found in the Energy Venture Analysis study linked here: Energy Venture Analysis – Evaluation of the Colorado Zero Emission Vehicle Regulation (ZEV)

Electric Vehicle Mandate: An Expensive Policy that May Actually Increase Global GHG Emissions

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The Coalition of Ratepayers agrees with the Pacific Research Institute (PRI) that the initial economic impact analysis of the proposed electric vehicle (EV) mandate for Colorado contained flawed and overlooked critical assumptions.

Dr. Winegarden, a Ph.D. economist with PRI, criticized the economic analysis, which was presented to the Air Quality Control Commission, with California’s vehicle emissions standards and their negative impact on the state in mind. His assessment added to, seconded, and solidified our own fears regarding Colorado’s adoption of an EV mandate. One of his points was that there may be other routes to achieve a reduction in greenhouse gas (GHG) emissions, since they’re already declining in Colorado as newer, cleaner vehicles continue to be bought and driven on our roads. Making one wonder: Is the mandate really necessary?

Moreover, according to Winegarden, forcing Coloradans to drive electric vehicles is more likely to cause a net increase in emitted GHG. The manufacturing of EVs generates more emissions than producing gas-powered cars, resulting in a deficit that takes time to overcome – in Germany, it’s as high as ten years. Making matters worse, a conservative estimate of an EV battery’s lifespan is approximately eight years. Hence, if we are to assume Germany’s timeline is correct, the break-even point is unlikely to be achieved, and the result will actually be a net increase in greenhouse gas emissions.

Colorado’s power generation mix is still dominated by coal as well. Democrats hope to change that reality, but for the time being, EV owners are simply using what Democrats call “dirty coal” to charge their vehicles. Their tailpipes are simply outside of town.

Mandated switching to renewable energy sources will not be cheap either, and there is no guarantee it will be successful. Any attempt will impact low- and static-income ratepayers the most, and if the move towards renewables is unsuccessful, “the expected reduction in emissions will overstate the actual emissions reduction achieved.”

Electric vehicles also cost $7,000 more than gas-powered cars after calculating the down payment and loan repayment costs. Admittedly, they’re cheaper to operate annually by about $660, but EV owners, on average, need to own one for 11 years to make up the $7,000 difference. Considering batteries typically last eight years, saving money, or breaking even isn’t likely.

Before adopting an electric-vehicle mandate, Colorado’s elected and non-elected officials need to know that the initial economic impact analysis presented to the Air Quality Control Commission was faulty and failed to consider serious assumptions. Winegarden’s report gives a much clearer perspective on what will most likely be a costly and detrimental policy.

If he is correct, changing the minds of elected officials and AQCC members on the proposed EV mandate may be critical to lowering Colorado’s GHG emissions even further.

 

The information and data contained in this post can be foundin Dr. Winegarden’s Issue Brief. The link to which is below. 
Pacific Research Institute, Issue Breif, CO ZEV Mandate Analysis

 

The Coalition of Ratepayers Supports the Right of Self-Determination

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The Coalition of Ratepayers submitted the following letter to the Public Utilities Commission in support of the Delta-Montrose Electric Association’s decision to withdraw from the Tri-State Generation and Transmission Association, Inc. The link to the PDF version of the letter can be found at the bottom of the page.  

Commissioners,

The Coalition of Ratepayers submits this letter of support for Delta-Montrose Electric Association (DMEA) in its attempt to withdraw from Tri-State Generation and Transmission Association, Inc. Further, the Coalition urges the Public Utilities Commission to set a withdrawal rate that is fair to both Tri-State and DMEA.  

The Coalition urges the Commission to consider this request in light of Tri-State’s actions, which reject individual autonomy and self-determination, are prohibited by public utility law, and are discriminatory as well as a predatory. 

DMEA members understand what is at stake and take responsibility for the outcome that may result from breaking with Tri-State. For better or worse, DMEA and the communities it serves want the ability, nay the responsibility, to choose their generation portfolio. Member owned and operated, rural electric cooperatives are unique in that the individuals served ultimately make the business decisions. Tri-State’s refusal undermines and attacks not only DMEA’s personal and economic freedom, but the personal and economic freedom of all the rural-electric cooperatives it serves. 

Tri-State claims to support freedom of association with a “core principle” of “voluntary and open membership,” but in action, rejects it. Tri-State says, “everything we do is member-driven and member-focused.” If Tri-State actually held these beliefs, it would have voluntarily approved a fair exit charge and not have stated in its legal filings that members have “no affirmative right to withdraw.”

The Coalition believes public utilities law prohibits Tri-State’s actions and that it is being discriminatory and predatory. In 2016, Tri-State allowed one of its New Mexico cooperatives, which had the same power contract as DMEA, to withdraw after paying a “fair” exit charge. Three years later, Tri-State asserts it can prevent any withdrawal and is unilaterally setting abusive charges. 

The Coalition stands by DMEA and its members’ right to self-determination in electric generation and hopes the Commission will set an exit charge that is fair to both parties. 

Moreover, the Coalition of Ratepayers supports the city of Boulder’s efforts at municipalization.

According to the city’s website, it decided to consider and explore the option of creating a local electric utility because of its “carbon-intensive” power supply. Although the Coalition of Ratepayers will refrain from commenting on Boulder’s reasoning, it does support the city’s desire for autonomy and self-determination — much like how it supports Delta-Montrose’s decision to withdraw from Tri-State.

Whether it’s member or voter-approved, the Coalition of Ratepayers will support the efforts of those who want the freedom to choose their energy mix.

Coalition of Ratepayers LetterDownload

Ratepayers need a voice; elect PUC commissioners

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The following article was written by Amy Cooke in response to the Public Utilities Commission’s ruling regarding the Coalition of Ratepayers’ request for attorney and expert witness fees.

While disappointed, the Coalition of Ratepayers isn’t surprised that the commissioners at the Colorado Public Utilities Commission denied us any and all financial relief even though the Coalition clearly met all criteria and was the only entity in the Colorado Energy Plan proceeding that seriously challenged Xcel’s “too good to be true” promise of new renewable energy at no cost to ratepayers.  

The Coalition is incredibly proud of the work we did and the information we brought forward on behalf of ratepayers. Had it not been for the Coalition, Xcel Energy electricity ratepayers would have been sold the false promise of new energy resources at no additional cost to ratepayers or even below-cost – a claim that Xcel ultimately could not prove and was unable to persuade the Commission was true.  Not only did the Coalition bring to light the numerous hidden costs of the Colorado Energy Plan, it also found an additional $87 million in errors that neither PUC staff nor the Office of Consumer Counsel (OCC) found in their analysis of the CEP. 

Regulatory proceedings are expensive, exclusive, and opaque. The PUC seems to want to keep it that way. The decision to deny ratepayers relief in their efforts to challenge the Xcel’s misleading claims will have a chilling effect going forward, all to the benefit of monopoly utilities.  In light of our experience as outsiders defending ratepayers in the regulatory process, it’s clear that these proceedings are more like Kabuki Theater with predetermined outcomes at ratepayers’ expense. Ratepayers have no voice and no choice. 

No unelected commission of three should have the kind of power the PUC has without some kind of voter say. In order to restore integrity in the process and allow ratepayers a voice, we believe it is in the best interest of Coloradans that they elect their commissioners. Further, since the OCC is no longer interested in representing ratepayers, it should be stripped of that authority or consider an elected ombudsman who acts on behalf of ratepayers. 

Going forward, it will be the Coalition’s goal to reform Colorado’s PUC making it more assessible and welcoming to all ratepayers, regardless of their ability to pay the high cost of entry, and to reshape the OCC so that ratepayers rather than monopolies are its focus.

Imagine 1500 feet of (electrical) freedom…

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By Brit Naas and Amy Cooke

What if we could break free from the massive transmission lines and power plants and the utility-scale wind farms that are hundreds of miles away? It’s not impossible. From cryptocurrency to ride and home sharing companies, decentralized and sharing economy platforms are altering sectors in a way that was unfathomable twenty years ago. 

We at the Independence Institute believe the power industry is about to see a similar renaissance, as companies like LO3 Energy work to make residential microgrids a reality – where neighbor-to-neighbor transactions occur with regularity. 

As with any change – whether cultural or economic – movement away from the status quo usually doesn’t happen overnight. This is especially true for the power industry. For nearly a century, private, for-profit regulated monopolies have dominated the electricity sector, reaping in billions of dollars for their shareholders courtesy of captive ratepayers.  

Theoretically, Colorado’s Public Utilities Commission and our state legislature serve as watchdogs over these for-profit monopolies. Publicly traded monopoly corporations are guaranteed a profit for their “just and reasonable” rates to provide service to ratepayers, who have no choice in their electricity providers. Monthly utility bills, sometimes larded up with additional fees for unnecessary corporate expansion, have become more of a wealth transfer system between captive customers and corporations’ shareholders. 

Obviously, monopoly utilities do not yield this privileged position voluntarily. From Tri-State Generation and Transmission to Xcel Energy, they are notorious for their efforts to resist change that could lower or even eliminate their guaranteed profit margins.  

Delta-Montrose, a rural electric cooperative that services Montrose, Delta, and Gunnison counties, is currently trying to withdraw from Tri-State because its members want the freedom to determine the type of sources that generate their electricity. It had hoped the process would have been nonconfrontational and fair for both parties, but Tri-State is resisting and has asserted that the co-op cannot withdraw. Not only is Tri-State’s position most likely illegal, it is also subversive to Delta-Montrose’s members’ autonomy and self-determination. 

Xcel, Colorado’s largest electric utility, is the glaring case study of how our centralized electricity generation and distribution business model is a disservice to customers and a financial windfall to the monopoly. 

It has been wildly successful at lining its shareholder’s pockets by appealing to the renewables-at-any-cost crowd. Self-described environmentalists such as the Sierra Club, Western Resource Advocates, and Conservation Colorado have formed an unholy alliance with Xcel. 

These special interest groups with their own deep pockets and a myopic view of utility-scale wind and solar have aided and abetted Xcel’s unjust enrichment at the expense of innovation, free markets, the environment, and most importantly – those of us paying the bills, otherwise known as ratepayers. 

Protected by an army of lobbyists, government officials, and entrenched interest groups, any hint of reform with the potential to threaten Xcel’s stranglehold on its 1.4 million captive ratepayers is met with open hostility and blatant lies. Despite the plethora of money-saving pledges, have your rates gone down? Furthermore, Xcel has used the “unholy alliance” to strengthen its financial and monopoly position. 

Depending on need and political will, Xcel has used its position either to circumvent the Public Utilities Commission by going directly to the state legislature, or to circumvent the state legislature by going directly to the Public Utilities Commission. 

It’s a clever strategy but not fool-proof for Xcel and its sycophants. Not all legislators are enamored with Xcel’s lying and bullying to protect its financial gravy train. In the 2018 session, a bipartisan group of legislators led by Senator Steve Fenberg (D-Boulder) showed a willingness to chip away at the monopoly’s stranglehold as one of the first states to pass a “right to store” bill (SB18-009). With Governor John Hickenlooper’s signature, Xcel residential customers now have an option to store their own electricity free from the monopoly’s interference.  

This brings us back to the idea of 1500 feet of freedom. We urge those same courageous lawmakers to craft and pass legislation that will allow individuals to buy or sell power produced and/or stored within 1500 feet of them without regulatory and monopoly interference. 

Let’s say a business owns a mini solar garden or a natural gas generator, but it doesn’t need all of the power it can produce. That business could contract with a neighboring business to sell its excess power. Assuming they comply with all local building codes, the contract is between the two businesses free from PUC or Xcel interference. This would also work for neighbors. One neighbor may invest in solar panels while the next-door neighbor invests in battery storage. They decide to share the power and capital costs. All of this happens without regulatory or utility meddling. 

We believe a commercial or residential customer should be able to use the electricity they’re producing and storing as they see fit. This could mean using it themselves or selling it to those within 1500 feet of them.

As evidenced by an experiment conducted by the Brooklyn Microgrid in 2016, we have the technological ability to trade electricity via a peer-to-peer model. Three years ago, two participants in the Brooklyn Microgrid completed the project’s first peer-to-peer, or in this case, neighbor-to-neighbor transaction. One had solar panels that produced excess energy, the other wanted to purchase that excess energy. There was no middleman, just two neighbors who agreed upon a price and completed the deal.  

According to the Brooklyn Microgrid’s website, this first transaction was a “sandbox experiment.” However, this year, the Brooklyn Microgrid is going live, and both the sellers and buyers are going to experience energy choice. 

The technology is there, and 1500 feet of freedom puts innovation over regulation. It could reduce the need for behemoth-sized power plants and the hundreds of miles of transmission lines that go along with them. It could put money in individuals’ pockets rather than just corporate executives and shareholders. And it would put individuals in charge of power production and usage. 

Now is the time to unshackle ratepayers from the confines of a centralized grid and monopoly utility and propel the power industry into the twenty-first century.