Friday, March 27, 2009

How Much Is That Doggie In The Window?


Dawson Public Power District sold 483,114,863 kilowatt hours in 2008 to customers in our service territory. Based on a formula that is derived from what we purchase from NPPD, our (2008) carbon footprint was 394,827 tons.

The question becomes….why do I care? I used a carbon footprint calculator online (you can find them all over the internet), and my family’s annual carbon footprint is approximately 44 tons give or take a ton or two.

If a carbon tax (in the form of a literal tax or a cap and trade program) is imposed based on proposals being discussed by the federal government, we could expect to see a significant increase in our residential electric rates because utilities must collect the tax which becomes an additional cost to the end use customer.

Lots of numbers have been thrown into the ball park…$20 per ton, $50 per ton, and higher. No one has discovered the secret formula that will be enough to pinch (force) those companies who are responsible for large CO2 outputs into finding economical ways to curb the CO2.

I’ll play ball. Quick math says 44 tons (my footprint) times $20 per ton equals $880 annually added to my current electric bill and at $50 per ton, I’m screaming because I just added a $183 tax per month to my bill. BUT….we won’t be taxed individually; this tax will be socialized across the country according to the output of the generators. That means those people who conserve electricity or use energy efficient appliances will pay for those customers who don’t.

Let’s socialize the tax across Dawson PPDs average annual carbon footprint. At $20 per ton, our cost of power goes up 36% which means the kwh price at your home went from 7.27¢ to 9.0¢. At $50 per ton, which is an 89% increase in wholesale power cost to us, your kwh price went from 7.27¢ to 11.45¢. Dawson PPDs average residential customer uses about 1,347 kwh per month. That’s a difference between $97.93 per month (no tax) and $154.28 ($50 per ton tax). Your residential bill went up almost $60 per month for the same energy consumption.

We know it’s important to reduce CO2 emissions. But we also know it has to be done in a balanced manner so that our customers are not socked with electric bills made huge by a carbon tax. We want you to know what the costs COULD BE when you hear politicians throwing out numbers like $20 per ton or $50 per ton.

The numbers I use are a literal tax on carbon output by our electric generators. To use the cap and trade approach, the people who will benefit most are the traders on Wall Street – making the middle man the place to be as “offsets” become a commodity. Do we really want commodity brokers controlling our electric bills? And do we really want our utilities becoming tax collectors for the federal government?

Gwen Kautz, Customer Service Manager
Dawson Public Power District

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