The Colorado Public Utilities Commission is facing a sea-change in its traditional mandate to regulate utilities so Coloradans “receive safe, reliable, and reasonably-priced services.”
That mandate typically means the cost of energy is the primary factor in utility proceedings.
But a sweeping measure approved during last year’s legislative session imposed a host of new duties on the PUC, ordering state regulators, for one, to “promulgate rules requiring that the commission, in all of its work including its review of all filings and its determination of all adjudications, consider how best to provide equity, minimize impacts, and prioritize benefits to disproportionately impacted communities and address historical inequalities.”
That significant modification — or expansion — of goals took center stage on Thursday, when the utilities commission conducted the first of several workshops aimed at fleshing out how to navigate legislative mandates emanating from another law dealing with the creation of “clean heat plans.”
One of the issues raised during a virtual workshop, for example, is what exactly does “environmental justice” mean and how much will it cost.
“That’s an interesting question. I think it’s something that we’re still kind of working through as far as what does consideration of environmental justice mean for us,” said Joe Pereira, Deputy Director of the Office of Utility Consumer Advocate. “I think for the UCA, or in consumer advocates more broadly, cost has always been kind of a primary factor, and so now we’re in an environment where cost is important, but so are these other pieces. We’re faced with an environmental justice consideration that costs more.”
The utilities commission is tackling these complex questions as millions of Coloradans face steep increases in energy bills this winter, with some having to pay as much as 50% more compared to last winter. The rate increases occur at a time when residents struggle to keep up with inflation and the COVID-19 pandemic continues to hammer the state and the rest of the country.
Another challenge that came up deals the economics of large up-front investment required in the changeover from natural gas to other forms of heating, and how, because utilities don’t supply energy or equipment upgrades for free, the cost of compensating utilities may fall more and more heavily on lower-income customers whose proportion-of-income spending on energy is higher than those who can afford such upgrades.
“The Act tells us we need to think about finding new ways of innovating hearing from communities, using different languages, thinking about different formats, and learning more about these adverse environmental effects and being more transparent about communicating back to the communities who are living with those impacts,” said Nathalie Eddy of the Colorado Department of Public Health and Environment’s newly-formed Environmental Justice Unit.
At issue was SB 21-264, which requires requires gas distribution utilities with more than 90,000 retail customers to file a “clean heat plan” showing how it will meet decarbonization targets under the state’s Greenhouse Gas Roadmap.
Saying representative disproportionately impacted communities “are spread really thin right now,” PUC Commissioner Megan Gilman, host for the workshop, noted there were no representatives of disproportionately impacted communities present at Thursday’s workshop. SB 21-264 requires four workshops or public meetings for each utility’s clean heat plan.
“It’s something that we worked very hard to achieve but have not been able to accomplish in this workshop,” she said.
Acknowledging the complex, technical nature of the PUC and its operations, Gilman and other PUC representatives discussed at some length the need for the PUC to become significantly more user-friendly and transparent.
“We are still working on improving our role in engagement and specifically engagement related to disproportionately impacted communities,” Gilman said. “Today’s an important step to hear from you all to try to chart a path forward in this proceeding, and to help widen the aperture of how we view proceedings more generally, (and to) better assess outreach and participation and take view of the potential opportunities and pitfalls for DI communities in the space of clean heat and gas planning.”
Other issues included a perceived lack of interest on the part of the utilities commission in demonstrating that public comments are given any weight or real consideration.
Participants also expressed concerns for consumer privacy and the competing need for granularity in data collection to achieve decarbonization goals and how utility companies may not want to or may be legally prohibited from providing data about individual customers to the government.
As Colorado marches toward its overarching goal of a carbon-free society, some groups have raised alarms over the cost of the transition and who would bear it. AARP Colorado recently criticized the Colorado General Assembly, saying it has decided to fund the state’s transition to renewable on the backs of Coloradans.
“Our biggest concern is the pancaking of all these rate increases, many of them put on by the legislature to transition into clean energy,” Bill Levis, former chief of the Office of Consumer Counsel, told Colorado Politics last month. Levis was specifically responding to Xcel Energy’s proposal to increase energy rates by nearly $200 million.
But he also noted SB 21-272, the sweeping energy bill enacted during last year’s legislative session that mandates the utilities commission consider how its actions would affect disproportionately impacted communities.
“The legislature is sending two distinct and contradictory messages – one, the consumers will have to pay for all of the transition to clean energy, and, at the same time, the commission must ensure disadvantaged communities don’t absorb the cost,” Levis said.
He added: “The commission is in a conundrum because they have to enforce the law that the legislature passed.”
Saying a “significant source” of greenhouse gas pollution comes from using natural gas to heat homes and businesses and to heat water, SB 21-272 says “switching from gas space and water heating to high-efficiency electric heating will reduce greenhouse gas pollution and lead to improved indoor air quality.”
The bill sets hard targets of a 4% reduction below 2015 greenhouse gas emission levels by 2025 and 22% below 2015 levels by 2030. The cost of achieving these goals is capped at 2.5% of annual gas bills for all of a gas distribution utility’s “full-service customers.”
To meet these goals, the utility will have to convince consumers to give up gas heating appliances and switch to “beneficial electrification” for their heating needs unless the utility can switch from natural “geological gas” to using “recovered methane,” “green hydrogen” or “pyrolysis of tires.”
Future commission workshops have not yet been scheduled. Interested persons can access the PUC docket documents here.
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Originally Appeared Here