Colorado Pays Business to Replace Cost-Effective Coal Power Plants

Published June 13, 2010

Colorado Governor Bill Ritter (D) has signed House Bill 1365, dubbed the Clean Air-Clean Jobs Act, which directs taxpayer dollars to convert power plants from inexpensive coal fuel to more expensive natural gas. The new law is sparking strong emotions among consumers, who will now be facing higher electricity bills.

Backroom Deals Alleged
House Bill 1365 commits the state to pay Xcel Energy, the state’s largest utility, to help convert three of its coal-fired energy generation plants to natural gas by 2018. Supported by Ritter and the natural gas industry, the bill is coming under fire from mining groups for what is perceived as backroom dealings that led to its passage.

The Colorado Mining Association says it was “blindsided” by the bill and had little chance to present legislators with information regarding higher electricity costs now facing homeowners and businesses.

Electricity Costs Will Rise
“This bill,” said Colorado Mining Association president Stuart Sanderson in a press statement, “is the unseemly product of backroom deals cut by lawmakers and lobbyists that actually gives electric utilities the ability to charge Coloradans more to cover the cost of modifying power plants to switch from coal to more expensive natural gas.”

Moreover, according to the National Mining Association, Colorado could lose 43,000 high-paying coal-industry jobs.

“I think the proponents of this new law have totally ignored any reasonable analysis of costs,” Colorado State Rep. Kent Lambert said.

Different Language, Same Result
Lambert noted the bill contained strong, controversial global warming assertions to justify the switch from coal to natural gas—before public pressure forced political leaders to remove the global warming language and related regulations. Even without the warming assertions and regulations, however, Lambert notes the final version imposes the same costly energy restrictions.

“It’s totally irrational exuberance that will, in the long run, increase prices, including distribution costs, the rate of extraction, and costs to consumers,” Lambert said.

Supporters of the bill said part of the reason behind it was to offset the chance for federal regulators, like the Environmental Protection Agency, to come into Colorado and mandate strict controls over energy production. Lambert, however, finds that argument weak.

“You heard from supporters that voted for this that they did so because it was really a states’ rights issue,” Lambert said. “I said, ‘Come on, that’s like the Dutch boy sticking his finger in the dike while the tsunami goes over the top of the dike.’ … This was just a bad bill, and for Republicans [who supported it], it was a lot of compromising on principles.”

Cheryl K. Chumley ([email protected]) writes from Northern Virginia.