Energy, Environment, Politics

VW settlement money shouldn’t prop up de-funded Colorado Energy Office

With the failure of the Colorado Energy Office (CEO) reauthorization in the 2017 session (Senate Bill 17-301), it’s clear that the legislature couldn’t find a bipartisan solution to continue funding the office. This failure is not surprising given the CEO’s history of mishandling funds. However, the Volkswagen Clean Air Act Civil Settlement could breathe new life into the agency with a new influx of funding.

Following the Volkswagen emissions scandal, the company settled with the Environmental Protection Agency (EPA) to create a $2.7 billion fund to mitigate the emissions impact of its defective vehicles. Colorado’s share of this fund is $68.7 million. This number was established based on the number of defective vehicles sold in the state.

The EPA has set specific guidelines on how the funds may be used, limiting them to use for mitigating the excess diesel emission effects of the VW vehicles involved in the scandal.

The Colorado Department of Public Health and Environment (CDPHE) is the designated lead agency to oversee Colorado’s share of the funds. In its plan, the majority of funds will be used for various programs that convert a variety of vehicles (ranging from heavy-duty trucks to public transit busses) to alternative fuel or electric vehicles, and to expanding current electric vehicle infrastructure in the state, something that failed twice in the last legislative session with the death of SB17-301 and HB17-1227.

Another $5.2 million of the allocated funds will be given to the Colorado Department of Transportation (CDOT), the Regional Air Quality Council, and, you guessed it, the Colorado Energy Office. These funds come under the guise of “implementation costs.”

The CEO has a disreputable history of managing their funding. An investigation by the Independence Institute in 2011 illuminated the agency’s budgeting incompetence. The following year, an audit by the Office of the State Auditor found that the CEO “was unable to demonstrate that $252 million spent over… six years was spent cost-effectively.” Despite improved leadership since then, is simple availability of money from the VW mitigation fund reason enough to prop up an agency that couldn’t get bi-partisan support?

Ronald Reagan once said “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.” The CEO is proof of the veracity of Reagan’s claim. Despite losing the confidence (and the funding) of the state legislature, the office continues to function by seeking new and creative ways of getting funding.

The usage-restrictions of the Volkswagen Mitigation Fund mean that Colorado is limited in what it can use the money for, but that doesn’t mean the funds should go to support the CEO. The VW funds should be used to finance Colorado programs already in place that accomplish the same goals outlined in the VW Fund usage-restrictions. The money from the State of Colorado that was originally used to support these programs should in turn be used to fund transportation infrastructure for the state. This would keep the funding of the existing programs and meet the requirements of the VW mitigation fund, while also freeing money to improve Colorado’s roads and bridges.

Coincidentally, this would also accomplish the VW mitigation fund’s goals of reducing vehicle emissions in the long-term. An expansion of highways and improvement of existing infrastructure would mean that commuters would spend less time stuck in traffic, idling their cars and contributing to emissions.

The Colorado Legislature gave the CEO a vote of no confidence by failing to reauthorize it, and yet the CEO continues to get funding through a variety of means. The executive branch is trying to use the VW mitigation funds to bypass the state legislature and re-authorize the CEO without authority from those representing Colorado voters.

Additional funds should not be given to the CEO through the Volkswagen mitigation fund. That money should be used to support current Colorado programs, while freeing up funds for transportation infrastructure improvements. It’s time for everyone to accept the CEO failure.

Tyson Thornburg is an energy and environmental policy researcher in the Future Leaders program at the Independence Institute, and a graduate student at the University of Denver studying Public Policy.


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