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Colorado Energy Office severely crippled after lawmakers fail to reach a compromise

Author: Peter Marcus - May 10, 2017 - Updated: May 10, 2017

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The Colorado Energy Office will be crippled after lawmakers on the last day of the session on Wednesday were unable to agree to a measure that would have continued full funding for it.

In its original form, Senate Bill 301 – described by Republicans as “far-reaching” – would have maintained funding for the Colorado Energy Office, while restructuring it and doing away with certain programs. It was supported by Democratic Gov. John Hickenlooper’s Energy Office.

Without the full funding – about $3.1 million – the office will see significant cuts in personnel, deeply cutting into its ability to provide core environmental and energy services.

The Republican-controlled Senate had included provisions that would have made changes to a host of renewable energy and other programs in the state, including eliminating some of those programs.

The Senate version would have expanded the Colorado Energy Office’s focus to include nuclear and hydropower, while giving the oil and gas industry a greater voice at the table.

It also focused heavily on natural gas, aiming at eliminating a prohibition on investor-owned utilities owning natural gas reserves. Sen. Ray Scott, R-Grand Junction, who sponsored the bill in the Senate, said the prohibition raises costs for consumers.

An investor-owned utility is owned by private investors and members. The legislation would have directed the state to create rules allowing an investor-owned utility to acquire an interest in Colorado-based natural gas reserves for up to 50 percent of its needs.

A provision of the legislation also would have raised registration fees for electric vehicles, which had some Democratic lawmakers concerned.

When the original 57-page bill made it to the Democratic-controlled House – a measure that was introduced in the final days of the session and died on the last day of the session – Democrats approved a trimmed bill, which would have continued funding for the Colorado Energy Office, but also would have stripped many of the provisions stemming from the Senate.

“Losing the office would have been a disaster for Colorado. So rather than lose it, or lard up the reauthorization with giveaways to the oil and gas industry, we passed a clean bill,” said House Democratic Leader KC Becker of Boulder, just prior to the Senate rejecting the House’s version of the bill.

The discussion became bogged down in politics, especially following a recent home explosion in Firestone linked to natural gas leaking from an old pipeline. The incident killed two men.

Knowing that the Energy Office would be significantly reduced by rejecting the House version of the bill, Scott responded, “It’s their choice now,” referring to House Democrats.

Becker responded, “This late bill included sweeping changes to energy policy and concessions to the oil and gas industry, many of which I could not support. Mixing these new changes in with the work of the Energy Office turned the bill into something that was untenable.”

Peter Marcus

Peter Marcus

Peter Marcus is senior statehouse reporter for Colorado Politics. He covers the legislature and previously covered politics, the governor’s office, the legislature and Congress for The Durango Herald. He joined The Herald in 2014 from The Colorado Statesman, a Denver-based political weekly. The Washington Post twice named Marcus one of the nation’s top state-based political and legislative reporters.


2 comments

  • BurningBrule

    May 11, 2017 at 8:45 am

    “It also focused heavily on natural gas, aiming at eliminating a prohibition on investor-owned utilities owning natural gas reserves. Sen. Ray Scott, R-Grand Junction, who sponsored the bill in the Senate, said the prohibition raises costs for consumers.”

    I think these 2 sentences are wrong. I don’t believe that there is a prohibition in statutes or Public Utilities Commission rules on IOUs owning NG reserves. Indeed, both IOUs as well as many natural gas providers such as Atmos, Xcel and Black Hills Gas own or lease NG storage facilities (such as depleted underground gas voids). What has happened is that the PUC has, in essence, rejected Black Hills Electric’s attempt to put NG reserves extracted from the Colorado western slope into its ratepayers’ rate base. This rejection was for many reasons but in essence, because it is not a “good deal” for ratepayers. A good deal for Black Hills Electric and people interested in increasing costly gas plays on the western slope? Yes. But, again, not for captive ratepayers of monopoly utilities.

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  • Publius Valarius

    May 11, 2017 at 3:20 pm

    Brule has it right. A possible ploy by Scott? It is usually very easy to prohibit something that doesn’t exist to prevent it if it comes to pass – like a future prohibition against owning a gas reserve. Moreover, the gas industry is going nuts trying to increase the price of natural gas (NG) because tight sand and shale (unconventional recovery) is expensive. The other factor of this is these wells have an initial surge of production and then fall off in a steep asymptotic curve like a balloon deflating. This then causes a need to keep punching new wells to keep production numbers high and investors satisfied. The O&G industry quietly calls this the “red queen” effect (the red queen telling Alice you have to keep running to stay in one place). The Ponzi of last investors in the pool will lose everything.

    The PUCs of States that have approved this have allowed rate base insertion. This means ratepayers will pick up all costs, a new market has been made, and smart money will bail before the numbers cascade down in NG production. BUT, there is another nasty, remember the talk, “NG is a bridge fuel.”! It was to “bridge” to steady RENEWABLE sources becoming available. No matter how you look at it, NG won’t be the fuel of the future, matter of fact, fuel may be rather blasé in the future of electric powered everything.

    But here and now, Scott appears to have taken the role of a shill to get the snake oil sales out of the publics’ pocketbook to help O&G milk the last profits of their dying industry. O&G is desperately trying to avoid the death throes currently hitting the coal industry.

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