Steve Pomerance

I’ve suspected for a long time that climate change is making our world population level unsustainable. Reading “Recipe for disaster” in the Nov. 16 issue of New Scientist, a respected British science publication, confirmed that view and lays out the long-term future we face. Our food situation is dire: Climate change has had devastating consequences for farmers around the globe. And efforts to compensate, such as clearing forests to grow more crops, have led to increasing carbon dioxide levels, as well as biodiversity loss.  Pests and pathogens are expected to increase. Glacial melting is reducing water supply in some areas. The Dec. 9 New York Times reported that three-quarters of the Earth’s surface has become “persistently drier” in recent decades. And, although increased CO2 levels have slightly improved plant growth rates, once the global temperature rises to exceed 3 degrees C, that effect will reverse. Our local water supply is at risk. The Denver Post last week reported tha...

This summer’s air quality here in the Denver metro region has been appallingly bad. According to AirNow.gov, almost every day we in Boulder have fairly high levels of pollution. As I write this, both PM 2.5 and PM 10 levels have the warning, “If you are unusually sensitive to ozone, consider reducing your activity level or shorten the amount of time you are active outdoors.” This has been the situation for most days for the last few months. How bad must it be in places like Commerce City? There was a recent Camera story about how Colorado’s Air Quality Control Commission has provided new escape clauses in its rulings, in spite of the 2021 state law (HB21-1266) which supposedly encourages stronger enforcement of existing laws. I looked up the main state law on air quality (CRS 25-7-102, passed in 2019), and, no surprise, it has huge holes in its language:  “To that end, it is the purpose of this article 7 to require the use of all available practical methods which are technologicall...

The following is a modified version of testimony I sent to the Colorado Public Utilities Commission for their current hearing on what will happen to Xcel’s coal plants and who should pay. It’s time for the Colorado Public Utilities Commission to fish or cut bait. Either you all work for the ratepayers, or you work for Xcel — but you can’t have it both ways. The fundamental way a regulated utility like Xcel makes money is by investing its equity and receiving a return commensurate with what a company in an equivalent but competitive position would make, given the risks associated with such a competitive position. Xcel has been earning over 9% on its equity, which constitutes over 50% of its invested capital. The rest is mostly callable bonds, and so are relatively expensive. The key element of all of this is the word “risk.” If such a company makes a bad decision, then it should bear the cost. The big issue is Comanche 3, Xcel’s huge coal-fired power plant built near Pueblo, a...

  “It’s going to be by design, or it will be by disaster.” That was the quote I heard related to how we respond to climate change. Perhaps this, expanded to include other areas, should be the theme for the Council’s upcoming goal setting session. The Marshall fire reminds us that climate change’s drier conditions plus stronger winds makes it incumbent on us to do our best to reduce the risks. We may need to increase the work on our Open Space areas by doing more thinning and using more controlled burns. We also should put some serious focus on helping all homeowners, especially at the city’s edges, reduce their risks and those they might impose on their neighbors, by ensuring that all buildings are more fire resistant. Given climate change’s increased flooding, we really, really, really need a comprehensive flood management plan, so that we know what improvements or other actions are worth doing, which ones should have priority, and how we are going to fund them. With the propo...

I’ve heard many misconceptions as to what would happen if we sign this franchise with Xcel Energy. So I’ll try to try to clarify a few points. Regulated for-profit monopoly investor-owned electric utilities (IOUs) like Xcel are not the norm. Competitive markets, including some multi-state, exist in many areas of the U.S. Rural electric associations operate in other areas. And around 2,000 municipally owned utilities operate across the U.S., with 29 in Colorado, including Fort Collins, Loveland, Longmont, Colorado Springs, Aspen, Glenwood Springs, and Gunnison. This current regulated for-profit structure was created about a century ago. The companies’ goal was to eliminate competition, and “capture” their regulators (public utilities commissions, or PUCs) by limiting them to operating in a reactive mode. That way, the companies secured both market control and profitability. These IOUs then invest as much as the PUCs will allow in power plants, transmission lines, etc. For exam...

Some Camera readers have asked me questions about how regulated monopoly investor-owned utilities like Xcel work in practice. Here is some background information. Xcel Energy is a holding company that owns regulated monopoly utilities in eight states, including Public Service Company of Colorado, which is regulated by our Public Utilities Commission. Xcel makes money by investing their own cash equity (plus money derived from bond sales) in building power plants, power lines, etc. These investments are then added to the “rate base” on which Xcel is granted a rate of return by the PUC. This return is calculated based on the bonds’ interest rates and a rate of return on the equity, which, per the relevant case law, is supposed to be, “commensurate with returns on investments in other enterprises having corresponding risks.” The bonds are paid off as they come due. The invested equity is paid off in equal payments over the lifetimes of the power plants and other infrastructure. In r...

Colorado is now in a position to make a radical transformation of our whole system of generating electricity. Wind and solar have become so cheap that we can shut down all our coal plants, shift to more renewables, and still pay less for electricity, as recent studies by the Sierra Club and Vibrant Clean Energy confirm. The key is to dismantle our century-old model where the regulators (the Public Utilities Commission) operate in a reactive mode and so end up “captured” by for-profit investor-owned utilities. We need to replace this model with one where decisions are made independently and solely in the public interest. We have efforts in many states to learn from. We can see that going only halfway and leaving the investor-owned utilities with a significant decision-making role is guaranteed to perpetuate the struggles that we have here in Boulder. We will be shifting to more electric cars and heating systems, so demand for electricity will significantly increase. So we should...

According to the 2018 Boulder Community Profile, since 2000 job growth has been about 50% faster than residential. Excluding kids and retired folks, jobs likely grew at more than double the rate for resident workers. We now have well over 60,000 in-commuters. As a result, traffic congestion has dramatically increased. Unless we make some significant changes, it will just get worse faster, because we have exceeded the capacity of almost all our intersections. Even secondary streets are now heavily congested. Water, Boulder’s prized resource, may finally come under pressure. We get a significant portion of our supply from the Colorado River via the Big Thompson project. Given the multi-decade drought induced by climate change and the Colorado River Compact constraints, at some point, probably sooner than later, we will be forced either to buy out farmers’ water rights or live with a lot less. More people means more big buildings, more views blocked, more open opace trampled, more ...

I just returned from the annual International Energy Economics and Finance Association conference, where people from all over the world gathered to discuss global warming and climate change. I was on a panel discussing “securitization,” a financial tool that uses borrowing to reduce the cost of paying off utilities to shut down coal plants. Interestingly,  an op-ed I wrote  in April on the Colorado securitization bill was referenced by some people to illustrate their various perspectives. Our discussion ended up boiling down to a fundamental choice: Are we willing to pay whatever it takes to get utilities to shut down their coal plants? Or are we going to force some utilities to take a financial beating, because they invested in coal in the face of global warming? What really amazed me was how many people were aware of and inspired by Boulder’s struggle to create a clean energy municipal electric utility. I also received reports about utilities that were shifting to clea...

I just reviewed the 2019 Legislature’s bills related to our critical need to reduce emissions of greenhouse gasses. I’m very pleased that finally we are really moving forward, thanks in large part to our elected representatives from the Boulder area. But the process is not complete, and some legislation is missing important pieces. Here are some brief comments on some of the bills: HB19-1261 — Climate Action Plan To Reduce Pollution This far-reaching bill requires an overall statewide reduction in 2025 greenhouse gas emissions by at least 26 percent from 2005 levels, 2030 greenhouse gas emissions by at least 50 percent, and 2050 greenhouse gas emissions by at least 90 percent. Additionally, it requires regulated investor-owned utilities (IOUs) to create “clean energy plans” to meet an 80 percent reduction target for their emissions by 2030, though the language is somewhat confusing re: actual performance. In exchange, these utilities apparently get relief from future carbon taxes...

Last week I testified at a Colorado legislative committee hearing regarding HB19-1037, the “securitization” bill. This arcane but important concept emerged as many states shifted from supplying electricity through regulated monopolies to competitive systems, where customers and communities have choices as to where they get their power. As a result, these monopolies lost their captive markets, so their uncompetitive power plants built under the old regulated system no longer had customers. But the utilities had relied on the regulatory structure to provide a guaranteed revenue stream, so the states had to cover the utilities’ losses to avoid “regulatory takings,” where utilities are involuntarily deprived of something they relied upon. Securitization was a way to reduce the cost of solving this problem: Bonds were sold that had backing from a governmental entity. The proceeds paid off the utilities for their remaining investment in these plants; the bonds were then paid off by the r...

On Tuesday night,  the Boulder city council chose the best approach to mitigating the risk of future flooding on South Boulder Creek . But, given our situation, there are no perfect solutions. First, Boulder is one of the most flood-prone cities in the country. We have numerous creeks that run through the city. And being up against the foothills allows sudden storms to dump rain into the drainages that flow directly into town with almost no chance to dissipate. Second, some of Boulder’s drainages are huge. For example, the South Boulder Creek drainage above Colo. 93 is about 100 square miles. One inch of rain throughout that area would drop over 5,000 acre-feet of water, about five times the storage capacity of the measures under consideration Tuesday night. (An acre-foot is one acre covered with one foot of water, or 43,560 cubic feet.) Third, much of Boulder was built without serious consideration of the flood risk. South Boulder is not the only area subject to severe i...

In 1858, Chief Niwot, Boulder’s first real environmentalist (that we know about), told the European settlers the area was cursed: “People seeing the beauty of this valley will want to stay, and their staying will be the undoing of the beauty.” We are seeing Chief Niwot’s curse play out. The arguments for more and more, whether based on the specious need for continual growth and change or on the magical logic that more people means less total impact, drown out what should be obvious — there are fundamental constraints on how many people and jobs can be jammed into the Boulder Valley and still have it be a desirable place. Growth plus climate change have made our water supply much less secure. Boulder has three water sources: the Arapahoe Glacier area via the Lakewood Pipeline, the Middle Boulder Creek drainage via Barker Reservoir, and the Colorado River via the Colorado-Big Thompson Project (C-BT). Under the 1922 Colorado River Compact, the Lower Basin states (CA, AZ, NV) are ent...