Legislature dismantles Colorado Energy Office, passes major spending bill on final day

But the biggest agreement of the day came on SB 267, a bill that attempts to meet several of the most crucial needs in Colorado — increased road funding, stabilized funding for rural hospitals, a boost in funding for rural schools — as it also allows for more spending room in future budgets.

Several House Republicans blasted the bill, which largely was crafted by Republican Sen. Jerry Sonnenberg of Sterling. They said it violated the Taxpayer’s Bills of Rights by not reducing the TABOR spending cap by as much as the cost of the roughly $800 million hospital provider fee program that it took out from under the cap and made into an enterprise.

Rep. Tim Leonard, R-Evergreen, said it also violated the legislative requirement to limit all bills to a single subject, even as it seemed to try to fill the needs of many sectors to grow their government funding.

“We work for the people,” Leonard told House members. “We do not work for the recipients of government money waiting for the trough to fill up with taxpayer money.”

But a number of other Republicans, who largely represent rural areas or are considered more moderate members of their caucus, said they backed the measure because the spending recipients needed the boost. They echoed arguments from the Colorado Hospital Association that between six and 12 rural hospitals could close if they lost the money originally projected to be taken from them in order to balance the budget next year.

And several blasted conservative organizations who have criticized them for going along with the plan, saying they are out of touch with constituents’ needs and are making the Legislature a place that is run by fear.

“I know by the time I get back to my desk, the Facebook posts will start. We’ve heard them already: ‘Squish, RINO,’” said Rep. Lois Landgraf, R-Fountain, referring to the acronym some groups give to elected officials they consider to be Republican In Name Only.

“What’s not OK is that by the time I walk out of here, I will have earned myself a primary. But I am happy to be a ‘yes’ vote.”

Over the course of a turbulent 13-hour final day of the 2017 session Wednesday, the Colorado Legislature passed one the most wide-ranging omnibus spending bills in recent memory and then killed off the vast majority of functions of the Colorado Energy Office.

The 120th day of the first session of the 71st General Assembly began with broad bipartisan support over Senate Bill 267, a measure that saves Colorado hospitals from $528 million in funding cuts, dedicates $1.88 billion to highway projects, pares Medicaid spending and offers a personal property tax credit to businesses for their first $18,000 worth of business equipment.

– LEGISLATURE’S LAST DAY: Click above for Kathleen Lavine’s look at the session’s conclusion.

Despite protests from some Republicans that some of its spending maneuvers were unconstitutional, nearly half of the caucus joined with House Democrats in passing the bill by a 49-16 margin and sending it onto Gov. John Hickenlooper.

But that was about the only kumbaya moment of a day that descended into endless negotiations and then finger-pointing over two issues key to businesses in rural Colorado.

By the time the state House of Representatives adjourned at 9:39 p.m., the Legislature had rolled back a bill to increase funding for rural broadband.

No gas for Energy Office

They also had failed to pass a reauthorization bill for the Colorado Energy Office, meaning that the majority of the office’s functions and its 24-person staff will disappear July 1.

Senate Republicans had wanted to remake the decades-old office from one focused on renewable energy sources into one that promotes a wider range of energy, including fossil fuels, and allows investor-owned utilities such as Xcel Energy Inc. (NYSE: XEL) and Black Hills Corp. (NYSE: BKH) to purchase natural-gas reserves for use in high-demand times. Sen. Ray Scott, R-Grand Junction, introduced Senate Bill 301 roughly two weeks ago to put those changes into place.

But House Democrats objected to the bill’s emphasis on natural gas, its promotion of nuclear energy and its raising of fees on plug-in electric vehicles. And in a dramatic committee hearing Tuesday, they removed all of those provisions from the legislation, leaving the bill just to continue the office.

On Wednesday, House Majority Leader K.C. Becker proposed what she felt was a compromise amendment that would add back in the natural-gas provisions that Scott said was key to utilities saving money on energy purchases, in exchange for the addition of another provision that would have directed large utilities to focus on the lowest-cost forms of energy — natural gas and renewables — and to reflect any cost savings from doing so in rates.

But Scott pushed away the proposal as groups like the Colorado Mining Association called it an attack on traditional energy sources, and Senate Republicans voted to adhere to their version of the bill, putting the House in the position to agree or to kill the office.

Becker chose the latter option, and the House did not even attempt to consider going along with the Senate.

Afterward, Democrats seemed to mourn the loss of the office, which will maintain a skeleton staff but will be stripped of most of its funding to operate its core programs.

Republicans said that they would be willing to bring it back in the future, but only if significant changes were made to its structure.

“The message to us was ‘We get everything we want, you get nothing you want, and that’s the only way to extend it,” said Becker in an impromptu press conference on the House floor, describing the deliberations of the day. “It’s super disappointing.”

House Assistant Minority Leader Cole Wist, R-Centennial, said, however, that the energy office had promoted big-picture energy development in Colorado in name only for the past decade, choosing instead to focus on renewables over Colorado’s vast reserves of oil and gas.

He said he believes that the private energy industry will do well enough to promote itself in lieu of a state mouthpiece.

“I don’t think it’s the end of the state’s conversation about what we do with energy policy,” Wist said. “Maybe the state’s energy office can come back in a better form.”

Broadband bill battle

Similar tensions rose late in the day around Senate Bill 306, which would have taken $9.5 million from the high-cost support mechanism fund given to companies to aid with development of phone lines in rural areas and transferred the money to development of rural broadband, one of the highest priorities this session for Hickenlooper.

The House added an amendment late Tuesday that would have made it easier to increase such transfers of money in future years, but the Senate balked, saying that companies like CenturyLink Inc. (NYSE: CTL), the landline-phone provider that receives the vast majority of HCSM funds, had not agreed to the change in policy.

Like with the energy-office discussions, negotiations broke down in mid-day over whether to keep the House amendment in the bill.

But in this case, Becker receded her position of support for the House version of the bill — saying that it was more important to get a one-time infusion of money to rural broadband. She then issued some harsh words to CenturyLink and other providers who benefit from the HCSM.

“They don’t want this because that means they don’t get as much money,” she said of the HCSM beneficiaries. “This is the maddest I’ve ever been on any bill at the Capitol yet.”

In the end, SB 306 passed in simple form, allowing the one-time funding boost for rural broadband but not making it easier in future years to increase the flow of money between HCSM and that fund.

A productive final day

Those disagreements overshadowed what began as a productive final day to a historic session that already had seen agreement on a bill to accomplish one of the most long-sought goals of the business community — construction-defects reform.

Legislators agreed to send to Hickenlooper a bill that outlined how open primaries would work, fulfilling a desire of business leaders to try to bring more moderate unaffiliated voters into candidate-nomination processes that in recent years have packed the Legislature with more conservative and more liberal members.

And they also agreed to pass a bill that would give breaks to companies that inadvertently fail to buy workers’ compensation insurance policies for employees while also setting up a fund to cover workers who were injured on the job while their employers were negligent in not providing coverage.

But the biggest agreement of the day came on SB 267, a bill that attempts to meet several of the most crucial needs in Colorado — increased road funding, stabilized funding for rural hospitals, a boost in funding for rural schools — as it also allows for more spending room in future budgets.

Several House Republicans blasted the bill, which largely was crafted by Republican Sen. Jerry Sonnenberg of Sterling. They said it violated the Taxpayer’s Bills of Rights by not reducing the TABOR spending cap by as much as the cost of the roughly $800 million hospital provider fee program that it took out from under the cap and made into an enterprise.

Rep. Tim Leonard, R-Evergreen, said it also violated the legislative requirement to limit all bills to a single subject, even as it seemed to try to fill the needs of many sectors to grow their government funding.

“We work for the people,” Leonard told House members. “We do not work for the recipients of government money waiting for the trough to fill up with taxpayer money.”

But a number of other Republicans, who largely represent rural areas or are considered more moderate members of their caucus, said they backed the measure because the spending recipients needed the boost. They echoed arguments from the Colorado Hospital Association that between six and 12 rural hospitals could close if they lost the money originally projected to be taken from them in order to balance the budget next year.

And several blasted conservative organizations who have criticized them for going along with the plan, saying they are out of touch with constituents’ needs and are making the Legislature a place that is run by fear.

“I know by the time I get back to my desk, the Facebook posts will start. We’ve heard them already: ‘Squish, RINO,’” said Rep. Lois Landgraf, R-Fountain, referring to the acronym some groups give to elected officials they consider to be Republican In Name Only.

“What’s not OK is that by the time I walk out of here, I will have earned myself a primary. But I am happy to be a ‘yes’ vote.”

Hickenlooper now has until June 9 to sign or veto the bills passed by the Legislature.

Ed Sealover covers government, health care, tourism, airlines, hospitality, restaurants and brewing for the Denver Business Journal. Phone: 303-803-9229.

http://www.bizjournals.com/denver/news/2017/05/11/legislature-dismantles-colorado-energy-office.html?ana=e_me_set1&s=newsletter&ed=2017-05-11&u=ewaw5QTZsfAZ0BN1ha0knw0d36a24e&t=1494513633&j=78147781

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