Senate Minority Leader Andy McElhany, R-Colorado Springs, today led an effort by Senate Republicans to protect the public from what they called is a backdoor tax hike by Democrats on their utility bills.

At issue was Senate Bill 22, sponsored by Jennifer Veiga, D-Denver, which would allow the Public Utilities Commission – the statewide regulator of utility rates – to approve tiered-rate structures designed to subsidize low-income consumers.

Critics charge that since artificially reduced bills for some consumers automatically mean higher bills for others, the bill amounts to a hidden tax.

“Costs have to be borne somewhere in the marketplace,” said McElhany. “What happens if this bill becomes law… is those costs are shifted to the other ratepayers.”

Republicans offered two amendments aimed at protecting consumers. The first amendment, which was allowed by the majority Democrats, requires the PUC to consider the negative impact of cost shifting to non-low-income ratepayers prior to adopting tiered rates.

The second amendment proved to be far more controversial. It would have required the PUC and utility companies to quantify the amount each bill is lowered or raised by the tiered-rate structure, and then to display the value of the subsidy or cost shift on all utility bills.

“It’s important that ratepayers know what’s going on,” said McElhany. “This is just simply putting everything out in the open so everyone knows what’s going on.”

Senator Shawn Mitchell, R-Broomfield, also argued in favor of the amendment. “In the probable event that there is a cost shift, we certainly need this information.”

“The PUC should be aware of the specific impact of what it’s doing, ratepayers should be aware of the shift and what it’s costing,” continued Mitchell. “All we’re asking for is the public disclosure and dissemination of this information.”

The amendment failed on a straight party-line vote, with every Democrat Senator voting against it. Afterwards, the bill passed on a voice vote. It is scheduled for final hearing in the senate on Monday.