Energy act could impact electric rates

Thursday, July 9, 2009

The American Clean Energy and Security Act (HR2454), which the United States Congress approved on June 26, could have a drastic impact on Barry County.

If HR2454 is approved in its current format, local residents could expect to pay up to $250 more for electric service in 2012, and after 2020, electric rates could increase by $1,800 or more per year.

"The American Clean Energy and Security Act, which is know as the Cap-and-Trade Act or the Climate Change Act, is a tax on carbon dioxide," said Bill Shiveley, Barry Electric Cooperative general manager and chief executive officer.

"The House passed the act with a 219-to-212 vote, and it takes 218 to pass," said Shiveley. "The bill itself is between 1,200 and 1,800 pages. They recently added 350 pages to the bill."

Electric cooperatives across the country are working with legislators to improve the bill for cooperative members. Proposed changes are intended to decrease future costs.

"The act will establish carbon allowances, and each electric company will be given a certain number of allowances," said Shiveley. "They will be required to purchase other allowances if they can't get their emission levels under the required level."

Carbon allowances will be distributed to electric companies and cooperatives based on megawatt sales. This will allow companies that utilize nuclear and natural gas energy to receive more allowances than are needed to cover emissions. Those companies will be allowed to sell the extra allowances to the highest bidder, said Shiveley.

"The Midwest will subsidize the east and the west coast," said Shiveley. "Electric companies that use coal will have 1.1 ton of carbon dioxide emissions per megawatt hour where companies that use other forms of energy will only have .4 to .6 ton of carbon dioxide emissions per megawatt hour."

Cooperatives hope to persuade legislators to change the act, so that the allowances are based on emissions instead of usage.

"This would help, but it is still not good for us," said Shiveley. "The act also establishes a maximum for emissions for different set times. The emission allowances go down through the years."

If approved, the act will take affect in 2012. During the first year, cooperatives estimate member costs will increase between $175 and $250. After 2020, members can expect to pay at least $1,800 more for electric service per year.

"This would be a 50 percent increase for some of our lower usage members," said Shiveley. "By 2020, some members will be paying over three times what they are paying today.

"The technology to do what they want to do is not available right now," said Shiveley. "We don't think this should be required until the technology is there. We also think we should receive credits for implementing new technology."

Missouri cooperatives have received reassurance from Sen. Claire McCaskill and Sen. Kit Bond, who are opposed to the bill in its current form, said Shiveley.

Although Shiveley believes measures need to be taken to reduce carbon dioxide emissions, he pointed out that if the American Clean Energy and Security Act is approved and successfully implemented it will only decrease global carbon dioxide emissions by 7 to 9 percent.

"We need to do something," said Shiveley, "but we need to be reasonable and not kill our economy."

Fines collected from companies and cooperatives that exceed the emissions requirement will be invested in new technology and distributed to OACAC to help low income residents pay energy bills.

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