Big Pivots: Colorado utilities see no beauty in the federal budget bill

Oh, wouldn’t I love to know what is going through the mind of Jeff Hurd right now. And Gabe Evans, too.

These two U.S. Representatives from Colorado, both of them Republicans, voted for the sprawling 1,000-page budget reconciliation bill that, if adopted by the Senate, will certainly raise electricity rates and slow the adoption of electric vehicles. Together with the topsy-turvy tariffs imposed by President Donald Trump on China, the bill may help drive up prices of gas-fueled cars and trucks, too.

How will they explain their votes? (I sought answers but got no response).

In Durango, La Plata Electric Association already has seen impacts of the bill. The electrical cooperative received bids for its all-sources solicitation for 150 megawatts of generation. Wind, solar, natural gas — even geothermal and nuclear were eligible. Because of the uncertainty of federal tax incentives, all bids were higher than otherwise expected.

Chris Hansen, its chief executive, said most interesting to him were impacts of the proposed bill coupled with Trump’s 50% tariffs on steel and aluminum. The cost of new electrical transformers has already gone up significantly.

We discussed development of so-called emerging technologies like geothermal. Developers need long-term certainty to justify their investments.

“They’re much more difficult to do if you have policy uncertainty,” Hansen said.

In March, Hurd and Evans were among 21 representatives who signed a letter to legislative leaders that asked tax credits for clean energy be preserved to “increase domestic manufacturing, promote energy innovation, and keep utility costs down.” Hurd signed another letter in early May, asking that the incentives for innovation in nuclear energy remain.

Trump visited Capitol Hill two days before the vote, threatening any Republicans who voted “no” to expect opposition in their primaries. Two Republicans in the House did anyway, although two others did not vote, and one merely showed up. All Democrats opposed the bill.

Evans won election last November by a whisker in the purplish Eighth Congressional District north of Denver. Hurd has a more comfortable margin in the Republican-leaning Third Congressional District. It covers much of the Western Slope and sprawls eastward to Pueblo and within shouting distance of the Oklahoma border.

Colorado, particularly along the Front Range, has become a hotspot for energy innovation and investment if the remade tax landscape in the House bill survives Senate scrutiny.

Vestas, the manufacturer of blades and nacelles for wind turbines at factories in Brighton and Windsor, invested $40 million in expansion and hired 700 people in expectation of orders for 1,000 turbines during 2025. 

At Namaste Solar in Boulder, Chief Executive Jason Sharpe said he is unsure whether to plan for expansion or constriction.

“As a business owner, how do you plan a business with this amount of uncertainty, trying to thread the needle between coping with political change and not creating panic among my employees? It’s challenging,” he said.

Republicans hold a three-vote advantage in the Senate, but four Republicans senators in April sent a letter to Senate Majority Leader John Thune cautioning against “the full-scale repeal of current credits.”

“We just hit half-time. We’re still very much in the middle of this game,” said Harry Godfrey, who manages federal priorities for Advanced Energy United, a national industry association that monitors Colorado and 16 other states.

“They really went after just about everything that they could in the realm of clean energy and electric vehicles,” said Will Toor, who directs the Colorado Energy Office. “I would certainly hope that cooler and wiser heads will prevail in the Senate.”

Sen. Michael Bennet got an earful from leaders of Colorado’s electrical utilities.

“This casts a broad shadow on lots of the progress that the state has made in terms of power supply,” United Power CEO Mark Gabriel told Bennet.

“I am a practical businessman. I don’t have dreadlocks. I don’t wear Birkenstocks. This is not a crusade,” said Gabriel in a later interview.

The issue is one of resource adequacy and reliability for his utility, which serves one of Colorado’s fastest-growing areas north and east of Denver, including many oil and gas operations. Because electricity is increasingly used in oil and gas extraction and transport, it could raise their fossil fuel costs, too.

“These tax credits are critical to keeping costs, and therefore rates, stable for our members,” said CORE Electrical Cooperative, which serves Castle Rock and other south-metro area, including part of the U.S. Rep. Lauren Boebert’s district, who also voted for the bill.

Holy Cross Energy has a goal of 100% emission free electricity by 2030. In October and in April, it surpassed 90%. For 2025, it expects to end up north of 80% compared to 50% just a few years ago — while maintaining among the lowest electrical rates in Colorado.

One of its programs, Power+FLEX, would be especially impacted. It encourages Holy Cross members to install batteries in a way that benefit the homes and businesses but also allow Holy Cross to draw upon them when needed. Loss of the tax credit will make the batteries more expensive, dampening future demand.

The bill before the Senate is indeed big. Beautiful? Not to Colorado’s electrical utilities. I’d like to hear their conversation with the Republicans who voted for it.

This was extracted from a deeper dive on the budget reoncilliaton bill that can be found at BigPivots.com.