Climate change legislation is now being considered in Washington D. C. which has far reaching affordability Implications for every tax payer and electric rate payer. It's called Cap & Trade. The concept is being pushed by the Obama Administration and is now being debated in the House of Representatives.
Each of you needs to know the potential effect this legislation will have on your pocket book. It has the potential to double or triple electric rates in the future.
Here is how it works. The government, probably EPA, monitors the emissions of all greenhouse gasses, to include co2. The legislation will set targets or caps to meet in the future. Example: as now proposed, greenhouse gas emissions need to be reduced to 1990 levels by 2020 for electric generators like NPPD. This means that current emissions of 10.6 million Tons of Co2 need to be reduced by about 40% over the next 12 years. The cap then falls each year so the utility must make new investments to be in compliance. Now this is no easy task as replacement generation will need to be found or built, transmission constructed, with an expected increase in rates to support this effort. In reality, realistic emissions caps can be met and greenhouse gasses reduced with higher electric costs but not excessive costs as I will next describe.
The next part is where electric industry big heartburn comes in. It's the trade part of the equation. As now proposed, the legislation requires that a 100% auction to be held for emissions allowances. This would mean that NPPD would have to go to the auction and purchase allowances for the full 10.6 million Tons of Co2, not just the part which exceeds the cap. In addition this auction would be the start of a new trading market and it would be managed by Wall Street. This allows commissions to be added to the cost and it allows speculators such as hedge funds to buy sell and trade allowances. Estimates from sources in the Obama administration indicate that revenues from such an auction could generate $640Billion to over a Trillion dollars. You guessed it; the rate payers will pay the bill as the cost for allowances will be passed along in higher electric rates.
So now that your electric company is a tax collector for the federal government, it would be nice to know how the money is proposed to being spent. A small portion will be used to fund research and development of alternate technologies for renewable generation and improved generation capabilities, and a portion will be used to help compensate the poorer people in the country cope with higher electric rates with a form of energy welfare. But the biggest share of the money is proposed to go to the federal treasury to be used for government programs unrelated to energy. This is nothing but a huge scheme to transfer wealth from each of us and send it to Wall Street and the government under the guise of Climate Change. The part that you need to know it, it doesn't have to be this way.
Green house gas emitters can meet reasonable caps without this type of auction. As a tax payer and rate payer, this proposed legislation should make you upset. I ask you to become active in the defeat of this cap and trade proposal. It's just bad public policy and will cause unnecessary hardship on every electric customer in the nation. Fair and balanced legislation needs to be crafted for our energy future, which meets the needs of a shift to non-carbon generation in the most affordable manner.
Robert Heinz, General Manager
Dawson Public Power District
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