The $800 million set aside in the 2021-22 budget for the Colorado Recovery Plan is starting to take shape.
One of the roughly 39 bills identified as concepts in a February brochure has been signed into law and another 19 are working their way through the process, including six introduced Monday.
Two stimulus bills on energy were approved Tuesday by the Senate Transportation & Energy Committee, but one generated more than a little controversy and concerns that it amounted to a sweetheart deal for a former state official.
Senate Bill 230 directs $40 million to the Colorado Energy Office, which then is supposed to distribute $30 million to the nonprofit Colorado Clean Energy Fund. The bill doesn’t say how the clean energy fund would spend the money, although the energy office is required to report from time to time how the state’s money is being spent.
Both are tied to the same person: Paul Scharfenberger.
The Clean Energy Fund is the state’s “green bank,” formed by the Energy Office in 2018, spun off as an independent nonprofit, according to Will Toor, the executive director of the state’s Energy Office.
Until August 2018, Scharfenberger was chief operating officer for the Colorado Energy Office, part of his seven years in the office. He left in August 2018 to become the executive director of the clean energy fund, according to his LinkedIn profile. Hickenlooper announced the formation of the Clean Energy Fund in December 2018, according to the fund’s website.
The connections to the energy office — and the fund's lack of a track record — troubled Republicans on the transportation committee.
Scharfenberger admitted to "having a hand" in creating the energy fund.
“That is bothersome to me,” said Sen. Don Coram, R-Montrose. “I really appreciate the concept, but I am troubled by the vehicle.”
The Clean Energy Fund’s website identifies one project that it’s been involved in during the past two-plus years of its existence, a transaction from May 2020. That project is a partnership with Fort Collins Utilities to support its EPIC Homes program, designed to upgrade older, energy inefficient homes and rental properties, particularly low- and middle-income residents. According to Will Toor, the current executive director of the Colorado Energy Office, the loan was for about $2.5 million.
According to its website, the “Colorado Clean Energy Fund identifies unserved and underserved clean energy opportunities and works with a variety of stakeholders to structure creative and attractive finance solutions to bring those opportunities to fruition.”
During committee testimony, Toor said the clean energy fund would leverage the $30 million “seven to ten times” with private sector investments that would turn into job creation and construction of clean energy projects.
This will enable new markets in rural commercial energy projects and small business energy projects, Toor told the committee. This will include clean energy upgrades of homes owned by low- and moderate-income Coloradans and in rural Colorado, he added.
They’re also counting on Congress passing a “green bank” bill that could be tapped for financing these projects, a bill introduced in February that is part of the Biden administration’s climate plan.
“I’m very confident in our ability to manage this funding,” Scharfenberger told the committee. He testified remotely and was therefore unavailable for questions after the hearing. He did not respond to an email asking about the energy fund’s track record.
Sen. Ray Scott, R-Grand Junction, sought an amendment that would require the Clean Energy Fund to report how it spends that $30 million, but the committee voted it down along party lines. The bill does require the Colorado Energy Office to report how the money is being spent, starting in January 2022, with reports going to the General Assembly through its SMART committee hearings and to the governor's budget office. Those reports are then due every two years.
Bill co-sponsor Sen. Faith Winters, D-Westminster, couldn’t identify anything the CCEF has been involved in. “The CCEF program is new so there isn't a track record yet,” Winter told Colorado Politics in an email.
However, Toor told Colorado Politics after the hearing that the energy office has had success in previous programs similar to the energy fund. The Colorado Clean Energy Fund is analogous to that, he said. The Department of Energy provided grant funding to the energy office to create the Colorado Clean Energy Fund in 2017 and 2018. That money covered a market analysis, not capital funding, Toor said. He's also a member of the fund's three-member board of directors. The $30 million would be the fund's first serious infusion of capital, Toor said.
"I have a lot of confidence in Paul Scharfenberger. He was very successful in the energy office," including involvement in C-PACE and structuring other programs.
The rest of the $40 million would be split up among three existing state programs: $3 million to the Colorado “new energy improvement district,” known as C-PACE; residential energy upgrade loans of $2 million and $5 million in additional funding for the “Charge Ahead” program, both administered by the energy office.
Senate Bill 230 cleared the transportation committee on a 4-3 party-line vote and moved on to the Senate Appropriations Committee.
Chris Osher of the Colorado Springs Gazette contributed to this story.
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