***This is a MUST READ blog post from Amy Oliver over on our Energy Policy blog. Article re-posted entirely below:

A bill to repeal Colorado’s “phantom carbon tax” was heard today in the Republican-controlled House Agriculture, Livestock, and Natural Resources Committee. It’s the second time in as many years that State Representative Spencer Swalm (R-Centennial) has sponsored the pro-ratepayer legislation. Both times it was heard in the House Ag Committee. Last year, we documented how some Republicans in the committee voted to keep the carbon tax in tact, which is de facto support for the theory of man-made global warming.

The usual suspects, including Xcel Energy, the Colorado Department of Public Health and Environment (CDPHE), and the Public Utilities Commission (PUC), lined up against relief for ratepayers this year.

Fortunately for ratepayers, the Independence Institute stood by their side and against corporate welfare. As I stated in my testimony in support of HB 1172:

It’s true that the carbon tax is not a line item on a ratepayer’s bill, but is in included in the modeling of costs for resource acquisition. Costs dictate rates. The higher the costs, the higher the rates. The higher the rates, the more Xcel Energy makes.

The “phantom carbon tax,” as we call it, increases costs and therefore rates. Xcel customers pay Xcel for a tax that doesn’t exist. It is a redistribution of wealth from ratepayers to shareholders. (Full testimony is below)

Conventional political wisdom suggests that most Democrats would support carbon taxes while most Republicans would oppose them, especially in an election year, and that a party-line vote would have moved this bill out of committee. But after close to two hours of testimony, no vote was taken. Vice-Chairman Randy Baumgardner laid over HB 1172 until a later date. Colorado ratepayers will have to wait a little longer to see which lawmakers have the courage to provide relief from needlessly high electric rates.

Two members of the committee were absent from today’s hearing, Republican Chair Jerry Sonnenberg and Democrat Wes McKinley, which didn’t shift the balance of power. The bill still should have moved out of committee on a 6-5 vote, unless someone doesn’t want this bill to go to the floor of the House for an open debate.

So the real question is how will the House Ag Committee vote on HB 1172? Will some Republicans turn their backs on ratepayers and throw their support behind carbon taxes, the theory of man-made global warming, and corporate subsidies as they did last year? And if some do, which ones?

Republicans members of the House Agriculture, Livestock, and Natural Resources Committee:

• Jerry Sonnenberg, Chair
• Randy Baumgardner, Vice-Chair
• J. Paul Brown
• Don Coram
• Marsha Looper
• Ray Scott
• Glenn Vaad

Democrat members include:

• Randy Fischer
• Matt Jones
• Wes McKinley
• Su Ryden
• Edward Vigil
• Roger Wilson

Any guesses on how the vote will go?

Testimony on behalf of

HB 1172 No Imputed Carbon Tax

February 8, 2012

House Agriculture, Livestock and Natural Resource Committee

Mr. Chairman and Members of the Committee:

My name is Amy Oliver Cooke. I write on and direct the energy policy center for the Independence Institute, 727 E. 16^th Ave, Denver, CO 80203

Thank you for allowing me the opportunity to testify today on behalf of HB 1172.

At the Independence Institute, we are agnostic on energy resources. It is our strong belief that the choice of energy resources should come from the demands of the free market, and not from the preferences of policymakers, lobbyists, or special interest groups.

HB 1172 is simple in nature, unless a carbon tax is passed at the federal level, ratepayers should not be disadvantaged financially by paying the phantom carbon tax to an Investor Owned Utility such as Xcel Energy.

History

We haven’t been able to find any other state that has a carbon tax in statute. Colorado’s is based in HB08-1164, which says the Public Utilities Commission:

may give consideration to the likelihood of new environmental regulation and the risk of higher future costs associated with the emission of greenhouse gases such as carbon dioxide when it considers utility proposals to acquire resources.

HB 1172 would change the wording ever so slightly to the PUC

may give consideration to the existence of new environmental regulation and the costs imposed by current federal law or regulation on the emission of greenhouse gases such as carbon dioxide when it considers utility proposals to acquire resources.

When the 2008 bill passed, Colorado Conservation Voters explained it HB 1164 this way:

By giving the PUC the ability to use carbon as a value in resource planning decisions, HB 1164 represented the first time that the Colorado General Assembly took a substantive step forwards in giving regulators the tools they need to explicitly address global warming.

Three current members of this committee (Reps. Sonnenberg, Vaad, and Looper)  voted against that bill in 2008. I commend them for doing so. It is a selective, regressive tax – selective on resource (coal) and selective on customers (IOUs such as Xcel Energy), although pass through costs affect almost everyone in the state.

To tax or not to tax?

While it’s prudent for the PUC to consider the risks of Congress passing a cap-and-trade scheme that would put a price on carbon, it is, in equal measure, rash to include the cost of a federal carbon tax in resource planning that covers a time frame in which these costs don’t exist.

To its credit, the PUC staff registered second thoughts about the application of a carbon tax. Alluding to the $20 ton carbon tax during hearings for Xcel’s 2010 renewable energy compliance plan, PUC staff witness William Dalton expressed concern about “including costs that do not exist.”

Even Xcel Energy doesn’t believe that a carbon tax will be passed at the federal level any time soon.

As early as June 2010, Xcel petitioned the PUC for permission to renege on a commitment to build a 250 megawatt solar thermal power plant due to “changed circumstances,” among which the utility cited “the expectation that carbon legislation won’t be enacted for several years,” which would, “erode the economics of solar thermal” [Direct Testimony James F Hill, Xcel Witness, 4 June 2010, Docket 10A-377E]

In the 2012 Renewable Energy Compliance Plan, In Section 7 — Retail Rate Impact and Budget, Xcel acknowledges that I was correct in February 2011 when I testified in front of this committee on HB 1240, there would be no national carbon tax in the near future:

The carbon assumptions approved by the Commission in Docket No. 07A-447E assumed carbon regulation would be enacted in 2010; such regulation was not enacted and the prospects for near term carbon regulation appear to be slim.

Because Xcel assumes there will be no carbon tax in the near future, it presents a cost model that excludes the carbon tax and another model that does include the tax but not until 2014:

Due to the uncertainties related to the timing associated with possible carbon emission regulation, the Company did not include any carbon cost imputations in the model runs and other calculations set forth on Table 7-3. However, as discussed later, Public Service also presents with this Compliance Plan, as Table 7-4, a sensitivity case that assumes the same carbon imputation costs ($20 per ton, escalating at 7% annually) as approved in the 2007 Colorado Resource Plan but on a delayed implementation schedule of 2014.

The cost differences are substantial.

Colorado Legislative Council Staff wrote in the fiscal note for HB 1164, “the bill will not affect state or local revenue or expenditures, and is assessed as having no fiscal impact.” But including a non-existent $20 per ton carbon tax that adds millions of dollars to the cost of otherwise inexpensive fuels such as coal, has an impact on ratepayers. Currently, according to DOE statistics Colorado has the highest electric costs of any neighboring state, second highest in the Rocky Mountain West.

Conclusion

It’s true that the carbon tax is not a line item on a ratepayer’s bill, but is in included in the modeling of costs for resource acquisition. Costs dictate rates. The higher the costs, the higher the rates. The higher the rates, the more Xcel Energy makes. The “phantom carbon tax,” as we call it, increases costs and therefore rates. Xcel customers pay Xcel for a tax that doesn’t exist. It is a redistribution of wealth from ratepayers to shareholders.

If the state legislature wants to tax Coloradans to pay for global warming, they should make their case to voters  — all voters – and not just penalize Xcel Energy ratepayers, who have no other place to go, no recourse.

As I stated at the beginning it is the strong belief of the Independence Institute that the choice of energy resources should come from the demands of the free market, and not from the preferences of policymakers, lobbyists, or special interest groups and we believe that HB 1172 is consistent with that principle.

I remarked the other day that Amy Oliver and Michael Sandoval of our Energy Policy Center have been doing some fantastic work lately. Not sure why energy policy doesn’t get as much play as other policy areas but I certainly think energy is sexy. Their latest article scrutinizes the Obama administration’s love affair with China. The relationship is not simply a trade friendly “I give you something, you give me something” type of deal. It has more to do with China’s rare earth minerals and the ability of said minerals to produce “renewable” energy – which Amy and Michael once again prove is anything but green (and often times deadly).

We just released a new Issue Paper that tackles the perennial question: how much are we taxed here in Colorado? Many on the Left presume it’s not enough. When our researcher Anthony Gonzalez really dug into it and looked at the whole picture (state AND local taxation), Colorado it turns out sits right in the middle of the nation at 26th. Take a look at our first Issue Paper of 2012, How Colorado’s Tax Burdens Rank Nationally.

In his latest blog post, our Constitutional scholar Rob Natelson shares his thoughts on the recently signed into law National Defense Authorization Act (NDAA). Many believe the NDAA codifies the Executive Branch’s ability to indefinitely detain American citizens without trial. What does Rob think? Check it out here.

Keep your eyes on this developing story: Democratic lawmakers are putting RTD’s toes to the fire on building out the Northwest corridor. RTD made a promise many years ago and the folks up in the Longmont area have been paying for a rail system that has yet to be delivered. How long can RTD hold out? How long will the Northwest corridor take it? Time will tell…

Finally, there is a really cool economics fundamentals class being held at our building this Saturday the 11th. I encourage all of you to take a look at the details here. For those still not on Facebook, here is some information:

Are you a liberty activist who loves free markets, capitalism and limited government – but have a difficult time describing its myriad benefits and merits when talking with others?

Then this is the educational training course for you!

Liberty on the Rocks is looking for leaders in the liberty movement (current or future) who are interested in obtaining insights into the basic fundamental principles of free market economics by attending a half-day educational course in Denver. **Tickets to attend are $10**

On Saturday, February 11th from 1:30-6:30pm, Liberty on the Rocks will present an exclusive hands-on, discussion and activity-driven economics session. During this half-day course, attendees will learn and/or better understand:

-The role economics plays in the advancement of liberty

-How to make the case for freedom from an economic and philosophical perspective

-How prices work in a market place

-Different ways of looking at public policy from an economic perspective

-The essential arguments for why socialism can’t work

RSVP today by purchasing tickets at: http://denver.libertyontherocks.org/economic-freedom-session/

Email Amanda Muell for even more info.

“Hey Jon, what’s going on with energy policy these days?

Oh hey there! I’m glad you asked. Our Energy Policy Center director Amy Oliver has been hitting the energy and environment issues hard lately. You should take a look at our Energy Policy Center’s webpage to stay on top of Amy and Michael Sandoval’s work. For example, when President Obama came to town to talk about his “comprehensive” view of energy, Amy and Michael put together a nice article translating his rhetoric into real life language – that real people speak! Additionally, Amy sat down with my main minion Justin Longo to discuss Obama’s energy policies and figure out how his “green” energy favoritism gets twisted into an “all of the above” approach he claims to have. You can hear Amy translate and discuss Obama’s energy policies here on iVoices.org.

Let’s bring energy policy even closer to home shall we? Amy and Michael also tackled the upcoming energy legislation before our Colorado representatives in this year’s legislative session. What’s some of the good? What’s some of the bad? And you know there’s going to be some downright ugly when it comes to energy policy in Colorado… so what’s that all about this year? Amy gives a run down of some of the more important legislation in this iVoices.org podcast with Justin. You might be surprised at how great some of the good stuff is. (Hint: Rep. Spencer Swalm is on an energy tear this year!) Likewise, the bad will bad and the ugly… expensive.

Our good friends over at Americans for Prosperity (AFP) have a great new project called Monkey Wrenching America. I encourage you to check it out, as it’s the first effort I’ve seen focused entirely on exposing the professional “green” energy agenda. Many groups are taking up the cause of free markets in energy. AFP however is going to tackle exposing the well-paid left-wing groups who use the media, the court of public opinion, actual courts, and the hammer of government to destroy our already beaten down domestic “dirty” energy industries. Here’s how AFP describes their project against monkeying with our energy industry:

Monkey-Wrenching America was created to document the danger professional green extremists pose to America’s economy, limited government ideals and freedom-oriented way of life. The economic, fiscal, judicial and human costs of green monkey-wrenching activities aren’t as well-documented as they should be, because the establishment media becomes an unabashed cheerleader where the environmental movement is concerned. This website, and the stories and reports it hosts, will help document these excesses and bring some balance and reason to the public debate about environmental issues.

Be sure to check out their Wall of Shame. It’s going to be a great way to document the special interest groups who oppose low energy costs.

A massive medical privacy invasion in Colorado, another lame attempt to control the Internet by Congress, and the case in favor of fracking are all topics of recently published works by Independence Institute writers.

First Independence Institute intern and president of the Denver chapter of Liberty on the Rocks Donovan Schafer explains why hydraulic fracturing (fracking) is nothing to panic over. Writes Donovan:

In a recent report, the EPA linked groundwater contamination in Pavillion, Wyoming to the controversial practice of hydraulic fracturing (“fracking”) used to extract oil and gas. You can almost hear the collective “Hooray!” from anti-fracking advocates. But the actual data in the EPA report make it clear that fracking is safe.

Check out the whole thing here in the Colorado Springs Gazette.

Also be sure and check out II’s Amy Oliver Cooke and Linda Gorman in the Summit Daily as they point out the huge threat to medical privacy from Colorado’s “All-Payer Claim” database. According to Cooke and Gorman:

Colorado state government, and local foundations and health policy elites, have become so ideologically invested in failed health reform policies that they now see nothing wrong with forcing Colorado citizens to give their medical records to a centralized repository, free from scrutiny by state auditors, open records requests and open meeting requirements.

Read the whole thing here.

And don’t miss Senior Fellow in Technology Barry Fagin writing for the Colorado Springs Gazette’s editorial board on the Stop Online Piracy Act, which Barry calls a “bipartisan pile of waste making its way through the bowels of Congress…”

Check it out here.

Christmas is the time of year for giving. For example, I’ve been giving myself seconds and thirds at all the holiday parties I’ve gone to. (I’m still accepting invitations through the rest of this week). Amy Oliver and Michael Sandoval have been hard at work the past month giving the world a much needed dose of reality when it comes to “green” energy. Remember this article and this one? Those were just the tip of the iceberg. Amy and Michael have no plans to stop their crusade to give every green energy advocate a headache for Christmas. Their latest piece on Townhall.com goes further into the wilderness of green energy fallacies with, “Green Technology that Pollutes the Planet.” Turns out, green energy is the gift that keeps on giving.

Keeping with the theme of green fallacies, another great enviro-lie is that hydraulic fracturing is a boogeyman that sneaks into your house at night and contaminates your drinking water. As with all distortions of reality, a lie repeated often enough eventually becomes “true.” The latest opportunity for anti-fracking fanatics to re-tell their scare story came from an EPA report on groundwater contamination in Wyoming. Predictably, the enviros jumped on this AP story and screamed to the heavens, “SEE! We told you fracking is dangerous!!!!”

Umm…. guys, did you read the report?

Unfortunately for the loony Left, our intern Donovan Schafer did. He found that the Wyoming report did not indict fracking as the Left would have you believe, but rather, exonerated fracking. In this op-ed published in the Colorado Springs Gazette last week, Donovan goes into detail how the Wyoming report concluded that fracking is safe. Here’s a snippet,

So was any drinking water contaminated, and is anyone’s health at risk? The results from the 51 domestic wells respond with a resounding “No!”

There you have it folks. A couple more green energy gifts from us at the Independence to you.

Wow. Michael Sandoval hits a home run over on our Environmental Policy page. His latest work completely destroys the idea that green = clean. It’s the standard line we hear all the time. “Wind is clean!” “Solar is clean!” “Save our environment!” Well, sorry to let the cat out of the bag, but green is not clean by any stretch of the imagination. But don’t take my word for it, let Michael explain here.

In her newest article for Townhall.com, Amy Oliver asks an important question: can you be an advocate for the poor AND for “green” energy simultaneously? Her answer is: absolutely not.

Poverty rates have been rising over the last decade. Even in states like ours that claim to be renewable energy meccas.

…Colorado, home of the New Energy Economy and an aggressive renewable energy mandate, now has 40,000 fewer jobs than in 2000 with 900,000 more residents, the highest rates of unemployment in 28 years, and the median salary remains at the same level it was in 2000. The wage gap is considerable between black and Hispanic households, which make $20,000 less than the state’s median household income of $54,000.

No question, times are tough. Especially for the poorest folks among us. This makes for a rock/hard place situation for those on the Left. They promote themselves as champions of the poor and downtrodden. They claim to be the voice for the voiceless. Yet at the same time, they push aggressively for green energy in America. These positions become diametrically opposed when you consider the effects of our green energy policies.

Take for example our renewable energy mandate (RPS). The mandate in Colorado is 30%. This means that 30% of the electric power in our state must come from renewables. Whether you want it or not and whether you can afford it or not is beside the point. You’re paying a good chunk of your income for someone else’s wind and solar fantasies. This acts like a regressive tax on the poor. Why? Well, I’ll let Amy explain.

From 2011 to 2020, the RPS “will cost Colorado citizens an additional $11.78 billion over conventional power. By 2020, the RPS will force working families to an average of $337 more per year. By 2020, the RPS will cost commercial businesses an average of $2,360 per year. By 2020, the RPS will cost industrial businesses an average of $43,367 per year.

Renewable energy is simply not efficient. Unfortunately, our renewable energy mandate forces the least capable of us to fork over more of their money for energy. In many cases, it’s nothing more than a wealth transfer from poor to rich. How can you say you care about the poor when you force high energy costs on them en masse?

The working poor cannot afford this green agenda. The unemployed cannot afford this green agenda. If you want jobs in Colorado, the last thing you should want is green energy.

By 2020 “Colorado will lose an average of 18,380 jobs. Wages will be reduced by an average of $1,269 per worker. Total “annual real disposable income will fall by $1.87 billion.

That doesn’t sound very poor-friendly does it?

If you only read one article today, please read Amy Oliver and Michael Sandoval’s new Townhall.com article on the great “green” energy scam: A Stupid Energy Policy. They combine forces once again to thoroughly destroy the idea that government can efficiently create an entire industry based on their own fantasies of what’s good for the environment. Colorado is just one of many states that requires a certain amount of “green” energy production. In our case, it’s pretty high – 30%. This mandate, along with massive subsidies and protections, has enabled an entire industry to be built on a faulty foundation. As we’ve seen, the foundation is coming down… rapidly. Everyone knows the story of Solyndra, but do you know the story of Colorado’s Ascent Solar? What about the fact that Colorado ratepayers will be forced to pay an additional $100 million in 2011 to fund the renewable fantasies mandated by our government?

This new Townhall article is a MUST READ. It will blow your mind and leave you outraged. Additionally, Michael Sandoval appeared on Amy Oliver’s radio show on 1310 KFKA. They spent around 30 minutes talking about the article. Here is the 1310 KFKA audio.

Amy Oliver does a lot of incredible things around here. She is our transparency guru, or as we like to call her, the “Transparency Czarina,” and she’s the director of our Energy/Environmental Policy Center. She’s also responsible for some really cool catch phrases too. Some of them I can’t repeat on this blog, but one new one caught my eye this morning: “crony philanthropy.”

Amy and her intern were hot on the heels of a transparency scandal issue involving the Governor’s Energy Office (GEO). They poured through oodles and oodles of open records requests and published their findings in this Issue Paper: Governor’s Energy Office Needs a Dose of Sunshine. They uncovered a ton of suspicious expenditures from the GEO, including some charitable giving on behalf of us taxpayers (did you know that YOU contributed to making the Denver Zoo the “greenest” zoo on the planet??)

Furthermore, Amy also uncovered some “crony philanthropy” as well. For example,

Also notable is the total of $77,434.05 paid to the Boulder Energy Conservation Center (BECC), a non-profit for which former GEO Director Tom Plant served as executive director when he was in the Colorado state legislature. BECC since has changed its name to the Center for Resource Conservation (CRC). Other GEO funds have been directed to organizations to which CRC board members have had connections. Southwest Energy Efficiency Project, where CRC Vice President Mark Ruzzin once worked, received $222,162.29 from the GEO. Another $22,000 went to the Colorado Brownfields Foundation, on which CRC Secretary Polly Jessen once served.

First of all. It is impossible to be philanthropic WITH OTHER PEOPLE’S MONEY! I believe that goes against the definition of philanthropy. Secondly, it’s downright shameful to be generous with other people’s money when it serves your own naked self-interest! Double-fail! Luckily, the hard work Amy and her intern Kyle did will not be in vain. Rep. Cindy Acree is calling for an audit on the GEO. If and when we have an audit, I’ll be anxious to find out what other organizations I have been unknowingly charitable towards.