(FORBES BLOGS) – A Colorado Senate committee is in the process of discussing and debating a bill to roll back renewable power mandates enacted just last year.
by James Taylor
Because Democrats hold a narrow majority in the Colorado Senate, it will be a surprise if the bill makes its way through the state legislature’s upper chamber. Nevertheless, the bill highlights rapidly rising electricity prices in the Centennial State and illustrates how voters and legislators are growing increasingly weary of paying these higher prices for renewable power.
Late last decade, momentum favored those who support mandatory quotas for expensive renewable power. Currently, 30 states have renewable power mandates, with most of the mandates enacted between 2004 and 2008. Colorado was an early player in the renewable mandates game, with a 2004 voter referendum first implementing the state’s mandates, and the state legislature toughening the mandates in 2007, 2010 and 2013.
The mandates are taking a painful toll on Colorado’s economy and consumers’ pocketbooks. Since first imposing renewable power mandates in 2004, Colorado electricity prices have risen much faster than the national average. Prices have risen 20 percent faster than the national average since 2004, and have risen more than double the national average since the legislature began ratcheting up the mandates in 2007.
Had Colorado electricity prices risen at merely the national average since 2007, Colorado electricity consumers would have saved $4.2 billion in electricity costs. Averaged out over Colorado’s nearly 2 million households, the average Colorado household has already paid an extra $2,100 in electricity costs (more than $350 per household per year) beyond what each household would have paid if the state’s electricity prices rose merely at the same pace as the national average since 2007.
Colorado Republican legislators are rightfully asking voters, “What would you do with an extra $2,100 this year?” Very few are answering, “Why, I’d joyfully hand it over to the renewable power industry, of course!”
With electricity prices rising dramatically in states with renewable power mandates, momentum has shifted in Colorado and throughout the nation. Only two states have enacted renewable power mandates since 2008, and none have done so since 2009. Several states considered bills last year to roll back their renewable power mandates, with states like Kansas, North Carolina and Ohio coming close to approving such rollbacks.
Now it is Colorado’s turn. Just last spring, with Senate Democrats holding a 20-15 advantage and Senate and House leadership assigning a high priority to ratcheting up the state’s renewable power mandates, the legislature passed SB 252, forcing rural Coloradans to purchase still more of their power from renewable sources. Coloradans took their revenge in the November elections, recalling Senate President and SB 252 sponsor John Morse, along with Sen. Angela Giron, who made the renewable power mandates one of her signature issues.
Colorado affordable energy proponents are feeling emboldened, and supporters of renewable power quotas are suddenly playing defense. Coming less than a year after Democrats pounded tougher mandates down Republicans’ throats, this is quite a development.
Renewable mandate supporters claim consumers are protected by language saying the renewable power mandates cannot add more than 2 percent to the cost of consumers’ electricity bills; up from a 1-percent cap prior to 2013. However, the asserted cap’s many loopholes and questionable definitions make Swiss cheese look like impenetrable sheet rock by comparison. Here are a few of the reasons why:
Does the legislation provide an objective formula for determining what portion of electricity price hikes are due to the renewable power mandates? – No.
Does the legislation designate an objective panel of nonpartisan economists to determine what portion of electricity price hikes are due to the renewable power mandates? – No.
By what means are price hikes traced back, or not traced back, to the renewable price mandates? – Political appointees of Gov. John Hickenlooper, an ardent supporter of renewable power mandates, make a subjective determination.
How well was the 1-percent cap enforced? – Since 2007 Colorado electricity prices have risen 27 percent, while U.S. prices have risen just 10 percent.
How well is the recently expanded 2-percent cap being enforced? – Colorado electricity prices rose 5 percent during the first 10 months of 2013 (October is the latest month for which the U.S. Energy Information Administration has published price data), while U.S. prices rose just 2 percent during that same span.
These price increases are predictable, indeed inevitable, when government forces consumers to purchase ever-increasing amounts of expensive renewable power.
I suspect that after this November’s elections, legislative rollback of the onerous renewable power mandates will be just as predictable, and just as inevitable, as the mandates’ painful toll on Colorado electricity customers.