The flaws in energy policy are what’s to blame for raising rates

I've been doing a lot of reading on energy policy in Colorado of late, and thought "this" was worth a repost (see the comments).

When consumers ask "why are big oil companies making oil and natural gas so expensive so nobody can afford utilities or driving?" I point to the following.

Xcel's Comanche coal plant, built in 2010 and was supposed to last until 2070 will be decommissioned by 2040 and as part of decommissioning other coal facilities, will cost CONSUMERS $1.4 billion. After all, in order for Xcel to meet the state's mandated CO2 emission reductions of 80% by 2030, it must shut down coal plants. So despite being the most expensive coal facility it operates AND despite having 700 unplanned down days... as a PUC regulated monopoly, they can charge it back to you and generate a 10.2% rate of return.

It's a great business, if you can get it. And it's all codified by the Government. Two years ago, the legislature passed House Bill 19-1261 which outlined Colorado's Climate Action Plan to Reduce Pollution. That plan statutorily mandated the state to reduce its GHG emission by 90% by 2050. Similarly, Senate Bill 19-236 required retail utility companies to reduce carbon dioxide emissions resulting from the sale of electricity by 80% by 2030, and 100% by 2050. When you use a "social cost of carbon" to assess the NAV of shutting things down.... it's almost always positive. How does it work in practice? In its calculations, without factoring in the cost of carbon, closing Comanche 3 early will be $103 million more expensive. But once the cost of carbon is added, closing Comanche 3 creates a $267 million savings, the company said in its filing. “When you include the social cost of carbon there is no economically rational basis for running coal units,” Matt Gerhart, a Sierra Club attorney, said.

You want to know why your electricity bill is going up? Because there is no accountability for capital investments when you get a guaranteed rate of return of 10.2%, and politicians have decided the ‘social cost of carbon’ doesn’t include the rate payers cost of living.

$11,300 per person, per year, every year, until 2050. Governor Polis likely doesn’t mind that number, since he can afford it. But can you?

#hottakeoftheday