Wide-ranging voices—in politics, in business, and those of consumer advocates like our coalition—have been warning of the potentially crippling costs of the U.S. Environmental Protection Agency’s soon-to-be-implemented Clean Power Plan. Its ripple effects will be felt nationwide, and Colorado is by all indications squarely in harm’s way.
As we have contended for some time now, the proposed federal mandate for air standards will impact every type of consumer—residential, small business, agricultural and industrial—in every community in Colorado. That includes consumers served by public utilities, municipal providers and rural cooperatives. And the changes to Colorado’s statewide power generation contemplated by the EPA’s mandates may ultimately cost many billions of dollars.
Rather than heed or, at least, consider some of these urgent concerns, however, defenders of the oncoming juggernaut have sought in many cases to dismiss the criticism as coming from interests that are supposedly too close to the debate. Stakeholders involved in energy development of fossil fuels, for example, or power generation, are accused of having a vested interest and thus, presumably, are less than objective. Fairly or not, policy debates often turn on such considerations.
Well, now, another authoritative voice has entered the fray, and this time it is one without a discernible horse in the race. It is the voice of a truly neutral arbiter—one of the financial world’s “big three” credit-rating agencies—and it is sounding the alarm on the Clean Power Plan.
Fitch Ratings’ new report, “The Carbon Effect 2.0,” released just weeks ago, raises troubling concerns about the impact of the Clean Power Plan on the financial stability of the nation’s electric utilities. More troubling still, in the report’s state-by-state assessment, Colorado is among those facing the most formidable challenges, and potentially steepest costs, in complying with the Draconian EPA rules.
Among the perils facing Colorado, according to the Fitch report?
Our state would be hit 18th hardest in terms of the overall cost of complying with the mandate.
At the same time, the report ranks Colorado as the fourth most expensive in the country for the marginal cost of reducing its carbon output.
Remember, those costs are borne only initially by the power utilities that have to fundamentally retool—shifting away from cost-effective fuels to less efficient and less reliable energy sources—as they jump through the hoops of the Clean Power Plan. Ultimately, those costs are passed on down the line to the end-use consumer, whether it’s a large employer, a mom-and-pop business, a struggling family, an elderly couple on a fixed income or a local-government institution like a public school, which then will have to soak up more tax revenue just to keep the lights on.
More generally, the report notes that “compliance costs remain uncertain” for all states and that the EPA’s widely disseminated estimates of those costs, “…reflect assumptions related to low-cost renewable energy and demand-side energy efficiency that Fitch believes are aggressive.” That’s financial-industry speak for hopeful at best. The report continues, “Should these assumptions…prove overly optimistic, compliance costs could soar.”
Indeed, Colorado and the rest of the country are in a heap of trouble if the EPA’s aggressive assumptions don’t pan out, or they are counting on ratepayers to make up any difference by installing more insulation and perhaps turning down their thermostats.
That is why the recent decision by our state’s attorney general, Cynthia Coffman, to join 23 other states in mounting a legal challenge to the Clean Power Plan is welcome news, not only for constitutional watchdogs wary of a federal overreach, but also for rank-and-file ratepayers. More to the point, as we noted here last week, it amounts to probably the best, and perhaps last, hope for Colorado consumers against the crippling federal mandate and its almost surreal carbon-emission standards.
Permit us to repeat our praise for Coffman and our best wishes for the states’ lawsuit. After all, the news only is getting worse about the likely effect of the Clean Power Plan on Colorado’s consumers and on its economy overall. Only in a Washington bureaucracy does it make any sense; in Colorado, it is a daydream we cannot afford.
See the article here.
- On November 18, 2015