Energize Weekly, November 11, 2020
Election returns on state and local energy issues were both literally and figuratively all over the map last week on issues ranging from renewable energy to oil and gas taxes.
Voters in Alaska rejected a tax on oil operations while the industry was denied a tax break in Louisiana. Columbus, Ohio, voters backed a plan to seek alternative renewable electricity even as Boulder, Colo., voters abandoned the city’s plan to create a municipal utility.
State and local energy issues tend, for the most part, to be less partisan and tied to particular local circumstances. In New Mexico, for example, voters approved a modification to the state constitution changing the Public Regulation Commission (PRC), which oversees utilities, from five elected members to three appointed by the governor.
The change came after the commission’s problematic and political history and a lack of public trust. No more than two members of the new commission can be from the same political party.
“It’s always hard to convince voters to give up some of their direct control. In this case, a majority agreed that it was worth it in order to ensure that we always have qualified people in this important position,” Jason Marks, a former PRC commissioner, told Albuquerque TV station KRQE.
In neighboring Arizona, where the members of the Arizona Corporation Commission are still elected, the fate of a recently adopted mandate, requiring state-regulated utilities get 50 percent of their electricity from carbon-free sources by 2030 and 100 percent by 2050, is at stake.
The mandate was passed on 3-2 vote. Democrat Anna Tovar along with Republicans Lea Márquez Peterson and Jim O’Connor were elected last week giving the Republicans, who have been cool to the renewable mandate, a 3-to-2 edge on the commission.
In a regulatory board election in Texas, Republicans maintained all three seats on the Railroad Commission of Texas as Jim Wright defeated Democratic challenger Chrysta Castaneda by 10 percentage points.
Castaneda campaigned for tougher limits on flaring and methane leaks in the state’s oil fields. She had raised about $3.7 million, including $2.6 million from billionaire activist Michael Bloomberg. Wright had backing from the industry.
On the municipal level, Denver and Columbus each took steps to bolster renewable energy.
Denver voters, by a margin of 63 percent to 37 percent, approved raising the sales tax by 0.25 percent to 8.81 percent to fund measures to reduce the city’s greenhouse gas emissions and promote renewable energy.
The money – an estimated $40 million a year – will go to renewable energy and clean technology job creation, management of natural resources and the development of new solar and battery projects, as well as other renewable energy initiatives.
In Columbus, voters overwhelming supported a ballot measure giving the city the ability to set up a community aggregation program to bid out renewable electricity contracts for the municipality.
The ballot initiative garnered 75 percent of the votes. “Columbus is going to be leading the way throughout the country on smart, clean-energy strategies,” Columbus Mayor Andrew J. Ginther said on election night.
While Columbus was striking out on its own, Boulder voters, on a 53 percent to 46 percent vote, decided to award Xcel Energy a 20-year franchise.
“Our efforts to chart a new energy future for Boulder have always been guided by community input and participation,” Boulder Mayor Sam Weaver, said in a statement. “We appreciate the direction from our voters to enter into a new partnership with Xcel Energy.”
The vote came after a decade-long, $24 million effort by the city to develop an independent, municipal utility with the aim of reducing Boulder’s carbon emissions.
During those years, Boulder and Xcel Energy clashed in the courts and at the Colorado Public Utilities Commission, but at the same time, Xcel Energy retired coal-fired power plants and added wind and solar generation.
“We are stronger working together to advance our shared goals to reduce carbon emissions and believe we can serve Boulder and meet its energy goals,” Xcel Energy said in a statement.
In Alaska, voters appeared to reject a citizen-led initiative that would have raised taxes on production from the large oil fields of Prudhoe Bay, the Kuparuk and Colville rivers.
With about 60 percent of the votes counted, almost 57 percent of voters opposed the tax measure. A large snowstorm Friday, dumped as much as 10 inches of snow, slowing the count.
BP, ExxonMobil, ConocoPhillips and Hilcorp reportedly put more than $20 million into a campaign opposing the tax measure, arguing it could make the state less competitive and reduce future investment.
In Louisiana, one industry-backed ballot measure fared well and another did not. Amendment 2, changing the way property taxes on oil wells are assessed, passed by a wide margin.
The measure provides for the oil and gas resource in a well to be taken into account in assessing its property tax value. The result will be that some low-producing wells will be taxed less and more productive wells could be taxed more. Supporters said the overall fiscal impact would be neutral.
Another ballot initiative, however, was resoundingly defeated in every parish in the state. Amendment 5 would have enabled local taxing authorities to negotiate tax deals as an incentive for new manufacturing facilities, such petrochemical plants and liquified natural gas depots.
Opponents called it a corporate giveaway that would shift the tax burden to small businesses and individual taxpayers.
“This should be a clear message to the legislature that the taxpayers, the people of Louisiana are tired of these corporate tax exemptions and giveaways,” Edgar Cage, an organizer with the grassroots group Together Louisiana, told the Baton Rouge Advocate.
