In addition to the $9 million, questions also have arisen over the state- and federally funded office’s expenditures, such as a sharp rise in monthly rental costs that used to be in the hundreds of dollars and now are up to $13,000 per month.

Republican Rep. Cindy Acree, of Aurora, says it’s taken years of persistence, but she is hoping to finally get answers should the Legislative Audit Committee give the green light for an audit of the energy office’s finances. Acree said after repeated and unproductive requests for financial records from the energy office, she resorted to filing an open-records request a year ago and subsequently received reams of financial documents that took another year to wade through.

Acree says it’s not about targeting expenditures for energy policy but rather good stewardship of tax dollars, especially when the tax dollars are buried in what Acree said amounted to 1,500 pages of frustratingly complicated documents that lacked clarity.

“When we see red flags, we need to do something,” said Acree. “I’m standing up for our citizens who aren’t standing in the weeds.”

As the state faces another tight budget year, Acree says $9 million is a significant sum, especially in light of $10 million in property tax relief for senior-citizen homeowners that Democratic Gov. John Hickenlooper proposes should be suspended for another year.

“The governor wants to once again suspend the homestead tax credit, and this unaccounted-for money could cover that,” said Acree.

The documents that have sparked the interest of Acree and the governor show the office received almost $122 million during a period between January 2008 and November 2010, all under the previous administration of Gov. Bill Ritter. Current expenditures have not been called into question.

Hickenlooper is asking in his audit request for the auditor to identify ways to improve fiscal management and for more meaningful transparency, says GEO spokeswoman Denise Stepto. Transparency, says Stepto, should provide clear and usable data for anyone who wants to know how their tax dollars are being spent. Stepto said the need for an audit shows transparency principles may not always have been followed.

“If there’s an inability for people to get the information they want, and what’s there is inaccurate or too frustrating, it’s mind-numbing,” said Stepto. “We would love to have this information accessible to the public. When you have nothing to hide, there’s no reason to not have the information available.”

The requests will come under consideration at the next Legislative Audit Committee meeting in December. If the members approve the request, it will be forwarded to the state auditor, who will make a recommendation on whether the requests have merit to conduct a full audit.

Meanwhile, Acree and State Auditor Dianne Ray will meet with the news media and public Wednesday at 10:30 a.m. in the Legislative Services Building across from the Capitol to answer any questions about the pending audit requests.

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That trend now has the department  mulling how to wean Colorado off of a tax on gasoline altogether and steer the state instead toward a tax based on miles driven.

Department spokeswoman Stacey Stegman says talks right now are strictly preliminary and are geared toward possible legislation to create   the framework of a revenue-collection system—the blanks would be filled in later—and putting together a legislative task force to study the concept.

“We keep tabs on this issue and watch what other states are doing, but there is no plan at the moment—it’s just something to explore and consider,” said Stegman. ”

The advent of alternative-fuel vehicles like electric cars is just the latest development adding impetus to the department’s concerns; more efficient gasoline-burning cars have been the cause of a years-long, steady drop in gas-tax revenue.

Boulder’s Democratic Rep. Claire Levy, who drives a hybrid gas-electric car, says she is keen on the concept.  Times are ripe for the conversation to begin, says Levy. Pointing to a three-year downward trend in revenue collected at the pump, Levy contends that the department won’t be able to keep up with road maintenance.

“It’s definitely time to start looking at alternative ways to pay for our roads,” said Levy. “We can’t keep going with business as usual.”

House Transportation Committee Chair Glenn Vaad, R-Mead, also says the time may be ripe to look at alternative ways, based on miles traveled rather than gallons purchased, to fund roads—but taxpayers would need to warm up to the idea.

“It would take an evolutionary period,” said Vaad. “But in the meantime  these vehicles are not paying their fair share.”

Fair share is important, say both Vaad and Levy, since all vehicles contribute to the wear and tear of roadways regardless of what makes them run.  Vaad says traditional pay-at-the-pump revenue collection has evolved into inequalities.

Levy notes that owners of electric cars and hybrids, who generally pay more for their vehicles in exchange for zero-to-greatly-reduced gas costs and consumption,  need to realize the effect that paradigm shifts in gas consumption have had on the state’s ability to fund transportation needs.

“They must understand that their vehicles cause wear and tear on the roads too,” said Levy. “Gas consumption doesn’t mirror road usage anymore.”

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In 2007, 381 projects and $40 million in grant money were floated by the Severance Tax Cash Fund, which is funded by taxes on energy and mineral extraction.  Yet, since 2007, the account has been used to help fill in gaps in the state’s operating budget, with only 96 infrastructure projects funded by $3 million in grant money. In 2011, the grant program was suspended, with virtually all the money diverted to the general operating budget amid overall plummeting state revenue.

Sam Mamet, the league’s executive director, addressing the legislature’s Water Resources Review Committee on Wednesday, said the grant money was the cornerstone of infrastructure projects, especially in smaller communities, serving as a solid base of funds to be supplemented as needed with user fees and bonding.

The league, which is the principal statewide lobbying group for Colorado’s city governments, speculates that the $1.3 billion in lost grant money since 2007 translates into approximately 25,000 jobs lost.

“The loss of these grants, the construction work, and the jobs that go with it … this is a critical area for the entire state, but I worry about rural Colorado,” said Mamet.

Speaking for the Colorado Contractors Association at the water review meeting, Tony Milo said unemployment in the construction industry hovers around 20 percent,  and funding the suspended projects could take a chunk out of the industry’s unemployment numbers.

“The sooner we can fund these infrastructure projects, the sooner we can put Coloradans to work,” said  Milo. “Funding these projects will create jobs.”

Rep. Keith Swerdfeger, R-Pueblo West, questioned whether the possibility of more stringent EPA water standards to control algae only makes matters worse, putting even more pressure on rural communities to upgrade infrastructure.

“In trying to pay for all the … regulations coming up … how many small communities are out there that will have to upgrade their systems and yet can’t afford them?” asked Swerdfeger.

Michael Brod, Executive Director of the Colorado Water Resources and Power Development Authority, suggested funding alternatives to the panel. One, he said, is to increase water bills in communities that lack bonding capabilities or other revenue sources—although he conceded there could be obstacles to those approaches.

“You may increase their rates two, three or five times,” said Brod.  “In some places there are folks leaving the communities and there’s a smaller base to spread the costs over, so that’s going to be a challenge and I think we’re going to see more of that.”

Sen. Gail Schwartz, D-Snowmass Village, pointed to another possible funding option for upgrading infrastructure, one that has been employed for building schools in smaller communities lacking large numbers of taxpayers.

“Somewhat of a model might be like the school bonding program where we look at their (the district’s) capability to bond, and what they were capable of paying, and the state backfilled in order to build the new schools,” said Schwartz.

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In a news release announcing the payments last week, Gov. John Hickenlooper and Reeves Brown, executive director of the Colorado Department of Local Affairs, seemed to acknowledge the high stakes and the need to protect the “energy impact” money on behalf of the communities that benefit.

“These funds help make vital, day-to-day operations possible, ensure needed public-improvement projects become reality and bolster government services offered to local communities,” said Hickenlooper in a prepared statement.

The state Severance Tax and Federal Mineral Lease Direct Distribution payments will reach 506 counties, municipalities and school districts and will be dispersed through the local affairs department. The payments, totaling $54,655,280, exceed last year’s payment of approximately $37 million.

Lawmakers whose districts encompass areas that rely on these dollars—generated by extraction of oil, coal and other natural resources near their communities—say lawmakers’ original intent of returning dollars to impacted areas must be respected.

Rep. Roger Wilson, D- Glenwood Springs, says money designated to local entities should reach its intended destinations and that intercepting the payments to balance the state budget could throw local governments into a tailspin.

“When we move money around, we’re robbing Peter to pay Paul,” said Wilson. “Even though the money ends up benefitting the same people, we’re disturbing allocations that were made to local governments that count on this money. Local governments need stability in their funding streams to sustain both short and long-term needs.”

Republican state Sen. Ellen Roberts, of Durango, says diverting local funds to pay for statewide needs is both addictive and harmful.

“The dollars that flow back into these places help keep them vibrant,” said Roberts. “Raiding cash funds has now become a habit that is now very difficult to break.”

Money that should have returned to impacted communities from a related fund, the severance cash fund, in the form of grants amounted to approximately $113 million when the 2011-2012 state budget was finalized, according to Kevin Bommer of the Colorado Municipal League. Last year’s direct-disbursement dollars were left untouched.

Wilson, Roberts and Bommer all say they will fiercely defend the disbursement dollars should the state attempt to get their hands on those dollars as well as the cash fund dollars.

“There’s a line in the sand,” says Bommer. “We strongly oppose any more transfers of these dollars.”

For a list compiled by the local affairs department breaking down the disbursements of the funds statewide, click here.

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Tiered rates charge residential utility customers more—nearly doubling the price per kilowatt hour of electricity—whenever a household exceeds 500 kilowatt hours a month in the summertime. The June-through-September program, which began last year with the PUC’s approval, has been hailed as an incentive to conserve by its fans and derided as punitive by critics.

A bipartisan measure approved by lawmakers set the wheels in motion for the PUC to consider the medical exemption.  The measure, Senate Bill 87, sponsored by Sen. Betty Boyd, D-Lakewood and Reps. Rhonda Fields, D-Aurora, and Donald Beezely, R-Broomfield, left it up to the PUC to allow for the exemption and to determine what constitutes a warranted medical condition or life-saving device.

Beezely said the exemption is the right thing to do under the current situation but the tiered rating system is the wrong thing to do if conservation is the goal.

“This tiered rating is nothing short of punishing energy users and does nothing to promote conservation,” said Beezely. “People who are the most vulnerable are bearing the brunt of that punishment.”

Yet, Rep. Randy Fischer, D-Fort Collins, said in March, when a proposal to end tiered rating was considered by lawmakers, that the inflated rates are needed to address expanding energy needs driven by an increase in population and larger homes with air conditioning.

“It’s a fair way of distributing the cost of energy. People that drive the need for more plants should pay for them,” said Fischer.

Siding with Beezely was House Republican Rep. Jim Kerr, of Littleton, who says the needed medical exemption is indicative of a bad policy in the first place.

“There’s an awful lot of people impacted by this. All of a sudden electric bills go up and for folks who rely on air conditioning or medical equipment, the rate increase is unconscionable,” said Kerr. “Micromanaging electric bills is not the way to address conservation issues.”

The PUC is currently soliciting input from the public on how to determine eligibility rules for carving out a medical exemption. A public hearing will be held in October when the three-member commission will decide whether or not to allow the exemption and under what circumstances.

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Most in the industry are saying the new governor’s direction is a welcome development. Among those is Stan Dempsey, president of the Colorado Petroleum Association, who says the six new members on the eight-person board could signal a shift in tack from the previous administration.

“This governor, while still being environmentally concerned, is setting a different tone than Ritter did,” said Dempsey.  “In retrospect, Ritter did too much in tipping the equation.  This set is very solid. Collectively they are well-suited for the task.”

Charlie Montgomery, energy director for the Colorado Environmental Coalition, said he recognizes the slight nudge from the governor. The coalition is active in seeking ways to minimize the impacts of oil and gas production on the environment and on communities, says Montgomery.

“I wouldn’t say it’s a setback or a step forward. I’d say it’s a question mark,” said Montgomery “It’s too early to tell what kind of decisions they’ll make. The complexion is a little different, but we’re hopeful that the commission will be attuned to our concerns.”

Republican Rep. Ray Scott, of Grand Junction, quipped that he is taking partial credit for Hickenlooper’s appointments.

During the spring legislative session, the Western Slope freshman sponsored House Bill 11-1223, which would have required commission members to have more expertise in the oil and gas industry. Scott says he proposed the change to offset the legislature’s earlier decision to add the executive directors of the Departments of Public Health and Environment and Natural Resources as ex officio voting members, a move made at the behest of the administration of  the Ritter administration.

Scott says he and others perceived the resulting commission lineup at the time as weighted toward environmental concerns at the expense of new oil and gas exploration. Among the commission’s powers is its pivotal role in approving oil and gas drilling permits.

Scott’s bill passed the Republican-run House but died in the Democratic-dominated Senate, so he tips his hat to Democrat Hickenlooper for taking the initiative to make some changes.

“I was glad to see more technical expertise on the commission,” Scott said. “Apparently the governor was listening.”

One of the three new non-governmental members has a degree in petroleum engineering; one has worked as an attorney for oil and gas producers, and the other has a background in environmental and wildlife protection.

Meanwhile, Rep. Randy Fischer, D-Fort Collins, says talk about a pro-environment skew to the previous oil and gas commission was overblown.

“There was little controversy on the old commission, contrary to what people were saying,” said Fischer. “Balance was achieved before, and I hope that continues to be the case.”

Montgomery concurs, noting that most decisions made by the previous commission tended to be unanimous, and he suspects that will continue to be the case.

“Things haven’t changed that much, and we don’t see avenues foreclosed. The jury’s still out. Our hope is that they are all willing to listen and keep an open mind to our concerns, particularly issues with landowners on the Western Slope,” said Montgomery. “We’re looking forward to getting to know and working with the new commissioners.”

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The grant, from the U.S. Department of Energy and the Colorado Governor’s Energy Office, is intended to encourage large and medium-size companies to commit to a five-year energy-efficiency goal. In return, the companies receive a tip of the hat from the governor, free technical assistance and opportunities for networking and training.

Eight companies were recognized for joining the program and making the five-year commitment, and five, which have been participating in the program for the past two years, were recognized for making significant strides toward their efficiency goals.

The industrial challenge is led and coordinated by the South West Energy Efficiency Project (SWEEP), which describes itself as a “public interest organization promoting greater energy efficiency in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming.” Funders include the Governor’s Energy Office, the U.S. Energy Department and the U.S. Environmental Protection Agency.

The Governor’s Energy Office recently has come under fire from legislative Republicans who say its approach to greater efficiency stresses renewable fuels at the expense of traditional energy sources like coal, oil and gas—undercutting Colorado industries that are central to the state’s economy while also driving up costs for energy consumers.

House Bill 1312, introduced during the 2011 legislative session, sought to retool the Governor’s Energy Office to promote traditional fuels along with renewables. The measure failed.  Its sponsor, Rep. Jon Becker, R-Fort Morgan, said the restructuring was needed to balance future goals with a known quantity of energy efficiency and cost—primarily fossil fuels.

‘The point … is to bring everyone to the table—all of our energy sources to the table,” said Becker.

Yet, SWEEP, as one of its policy recommendations, suggests that, if anything, more nudging is needed toward renewable fuels. The group says, “Taxes on fossil fuels and nuclear energy based on their full environmental and social costs” may be needed, “along with recycling of new tax revenue to clean-energy efforts and other socially desirable purposes.”

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At a recent post-session town-hall meeting in Aurora hosted by Sen. Morgan Carroll, D-Aurora, and Rep. Rhonda Fields, D-Aurora, the virtues of renewable energy were promoted. The event was promoted as offering, “Tips for saving money and saving the planet.”

The event showcased opportunities for homeowners and businesses to embrace both water conservation and solar-powered utilities. Representatives from the cities of Aurora and Denver and a member of a panel from the Governor’s Energy Office spoke to the small gathering of constituents about programs, rebates, and other efforts that consumers can avail themselves of to make the leap into renewable energy for their homes and businesses.

Carroll said the government incentives coaxing consumers toward considering renewable energy as an alternative to traditional fossil fuels is nothing new and could in fact be less costly.

“Right now we’re spending more for fossil fuels in terms of subsidies than with renewable,” said Carroll. “The rebates and incentives out there for renewable energy sources is dwarfed by the incentives currently in place for fossil fuels.”

Carroll said there also are hidden costs to fossil fuels.

“If you don’t include in the cost of energy things such as coal miners who have died or lost their health, you are not looking at the total cost. Fighting for oil–a war-and-peace kind of thing –is also a cost,” said Carroll.

“In the big picture we need to figure out how to get a clear and total cost analysis to see what we’re really paying.”

Yet, Rep. Randy Baumgardner, R-Hot Sulphur Springs, says the push toward renewables from the government in recent years  ignores market realities and technological progress.

“The science is just not where we want it to be yet,”Baumgardner said. “When the government steps in with mandates before the time is right, it is meddling with the natural course of things and picking a winner.”

Baumgardner’s Republican colleagues offered numerous measures aimed at keeping the costs of marching too fast, too soon, toward renewables in check.  All were defeated.

Another failed measure, with bipartisan sponsorship,  House Bill 1312, sponsored by Rep. Jon Becker, R-Fort Morgan, and Sen. Mary Hodge, D-Brighton, sought to restructure the Governor’s Energy Office to be more inclusive of current energy technologies.

Meanwhile, some Democratic-sponsored measures supporting a shift toward renewable also failed to gather enough support, such as a measure sponsored by Sen. Michael Johnston, D-Denver, Senate Bill 32.  It would have created a loan program for homeowners wanting to install energy-efficient improvements like new windows, doors and insulation.

Still, Baumgardner says the bottom line for him is producing energy that makes sense economically and environmentally until another form lands on top through its own merits.

“We need all types of energy, and we need to stop pitting one form against another form,” said Baumgardner.  “The government has started picking winners and losers to the detriment of costs.  Right now, coal is the cheapest form of energy for our needs, and we’ve figured out how to use it cleaner.”

In the meantime, the legislature passed and the governor approved House Bill 1199, a bipartisan measure sponsored by Rep. Bob Gardner, R-Colorado Springs, and Sen. Bob Bacon, D-Fort Collins, that extends the provisions of a previous policy that places a cap on the permit fees for the installation of solar energy devices.

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The quasi-judicial state agency, whose three commissioners are appointed by the governor, has drawn fire in recent years from Republicans and some industries over a range of issues—from PUC support for renewable-energy mandates to ethics allegations involving some commissioners’ travel reimbursements. The PUC’s duties include regulating and setting rates for the state’s investor-owned public utilities.

A formal request made earlier this year and submitted by Republican Sens. Scott Renfroe, of Greeley, and Steve King, of Grand Junction, asked the state auditor to conduct preliminary research into the activities of the PUC.  The findings of the state auditor will be used for the committee to make a determination as to whether a full audit is merited.

The letter outlines areas for evaluation including transparency, accountability to ratepayers, expenditures, the conduct of PUC members, and whether the commission is indeed living up to its role and mission as a watchdog for consumers.

Renfroe says the state auditor is best suited to take an objective look at the PUC.

“Lots of issues and questions have been raised recently in the media and in the legislature about the policies and practices of the PUC,” said Renfroe. “The auditor has the ability to look at these issues within a non-political framework, making it the appropriate place to seek answers.”

According to the PUC’s website, its  purpose is to “serve the public interest by effectively regulating utilities and facilities so that the people of Colorado receive safe, reliable, and reasonably-priced services consistent with the economic, environmental and social values of our state.”

If the legislative panel approves the full audit, the state auditor will begin its work and report their findings later this year.

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House Bill 1081, sponsored by Rep. J. Paul Brown, R-Ignacio, and Sen. Gail Schwartz, D- Snowmass Village, adds a propane and butane mixture commonly known as liquefied petroleum gas, or LPG, to the state’s alternative fuel tax credits available to purchasers of new vehicles.

“The measure is important to the state, especially rural parts like southwestern Colorado. Families and small businesses need all the help they can get with gas prices on the rise,” said Brown.  “By extending the alternative fuel tax credit to vehicles that use liquefied petroleum gas, more families and small businesses can use energy-efficient vehicles that are more affordable.”

Yet, when the bill was heard in the House, Rep. Jim Riesberg, D-Greeley, said extending the credit would exacerbate an already-beleaguered budget. Riesberg said he wholeheartedly supports the inclusion of propane but questions the fiscal wisdom of offering an additional credit. The current credits made available in the last several years have amounted to $280,000 in the first year and $580,000, and $500,000 in the next two years, according to Riesberg.

“We don’t have the money to do this,” said Riesberg. “Rather than putting this (propane) in and forcing it on a legislature to come, we should simply say, ‘Once we have the money, then we should run this bill.’ ”

Vehicles that already qualified for the alternative fuel tax credit are those that run on compressed natural gas or ethanol as well as hybrid gas and electric vehicles.

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