THE BLOG
09/28/2010 11:38 am ET Updated May 25, 2011

Josh Penry's High Voltage Hypocrisy

Writing in the Denver Post, State Sen. Josh Penry (who represents a district on the Western Slope) makes a convincing case for why an energy tax hike proposed by President Barack Obama would deliver a potentially-devastating blow to consumers and businesses in Colorado, at a moment in time when both are on the ropes. Given the precarious state of the economy, higher energy taxes, which translate into higher energy bills and costs, will further stymie job creation and stunt economic recovery, according to Penry. And I agree with him on all that.

The problem Penry has, as a credible spokesman for lower energy costs, is his co-sponsorship last session of the so-called Clean Air-Clean Jobs Act, which also will drive up utility bills for many Coloradans by mandating an ill-timed and short-sighted shift from coal-fired to natural gas-fired power production. How much more Xcel energy customers will have to pay to implement the law -- which was in part written to benefit Penry's pals in the natural gas industry on the Western Slope -- is unknown. But an energy cost hike (and possible "spike") will be required to pay for the transition.

Last week's super-heated hearings before the Colorado Public Utilities Commission indicate just how high the stakes are, not just for energy consumers but for the special interests and odd bedfellows (including Xcel, green extremists and natural gas companies) who stand to benefit from the bill.

Coal is an imperfect energy source. It's not as "clean" as natural gas. But it continues to deliver the most affordable bang for the buck, despite disadvantages. A crash program to wean the state (and the country) from a reliance on coal as an electricity generator is neither realistic nor affordable at this time, as any energy realist understands. Natural gas may seem like a better option for the moment, because a worldwide economic slump and the recent discovery of new gas fields have temporarily depressed prices. But natural gas prices have always been much more volatile than those of reliable old coal. What seems like such a "good deal" today will become a rocket ride to the energy cost stratosphere once the economy bounces back and world gas demand soars. The current fad for natural gas will further increase demand, and prices, while reducing the flexibility and diversity of our overall energy portfolio.

The near-term hit Xcel customers will take for the coal-to-gas transition probably is just a down payment, in short.

Higher energy costs hurt consumers and businesses, no matter from whence they come. It's true whether these higher costs are imposed by politicos in Washington or Denver. Penry's arguments against Obama's tax hikes are compelling -- but they can easily be turned around to argue against implementing his CACJA. It seems that Penry is guilty of some high-voltage hypocrisy.