Electric Co-op Leaders Speak Frankly with Congress
Co-op members continue fight for affordable and flexible climate change legislation
In early May, roughly 3,000 electric cooperative grassroots leaders from across the country converged on Capitol Hill with a critical message for Congress — in addressing climate change legislation Congress must make sure electricity remains reliable and affordable. Our economy depends on it and so do co-op members.
In face-to-face meetings with lawmakers, the co-op representatives stressed that if climate change legislation isn’t enacted, the U.S. Environmental Protection Agency (EPA) would take matters into its own hands. Many on both sides of the political spectrum agree that could well be a disaster. In mid-April the agency announced it was ready to use the federal Clean Air Act to curtail the release of carbon dioxide and five other greenhouse gases blamed for contributing to climate change. Believing the Clean Air Act “not well-suited” to addressing global climate change, electric co-ops are urging Congress to act on a simple, affordable, flexible and effective solution.
In late June the U.S. House of Representatives narrowly passed the 1,500-page American Clean Energy and Security Act of 2009 bill (H.R. 2454) that some are calling a cap-and-trade plan and others are calling a cap-and-tax plan. Essentially it is designed to curb carbon dioxide and other greenhouse gas emissions. It would set a specific limit on such emissions from sources like power plants, factories, and refineries, requiring those sources to account for all greenhouse gases with allowances. An ever-shrinking number of allowances would be traded between companies. Unfortunately, under some parts of this plan the price to generate electricity from fossil fuels — a price directly tied to electric bills — could potentially fall into the hands of Wall Street speculators.
Allowances would be auctioned off at undetermined prices, leading to huge cost burdens for any source of carbon dioxide emissions. In the case of power plants, those costs would ultimately be passed on to consumers using the power.
Scott Ramsey, President and General Manager of Southern Illinois Power Cooperative (SIPC, www.sipower.org), said, “When SIPC recently ran the numbers for our emissions we estimated an impact to the homeowners in our region of $240-$1,300 per year per home. If the bill moves forward as is through the Senate and is signed by the President, it will leave open the potential for market speculation creating more cost uncertainty. If carbon dioxide emission allowances jump in price, utility bills could jump to several thousand dollars per year for each homeowner.”
The Obama Administration pointed to such a system as a new, substantial source of revenue for the federal government – effectively muddying the initial environmental argument for regulating carbon dioxide. Such a backdoor tax increase would force electric cooperatives to essentially become tax collectors for the federal government, and allow Wall Street investors to set allowance prices and determine how much you pay for electricity.
Some would argue that national energy and climate change policy should focus on reducing emissions, not on “revenue enhancement” for federal government. Money generated, through a cap-and-trade system or other means, should be used wisely and devoted to developing related technology or returned to those who foot the bill.
“You can either side with Wall Street and the speculators, or you can side with Main Street, your constituents and your electric cooperative,” said Glenn English, CEO of the Arlington, Va.-based National Rural Electric Cooperative Association, the service arm of the nation’s 900-plus consumer-owned, not-for-profit electric co-ops.
English said progress was made in making the House bill more affordable and fair to electric co-op members. “NRECA thanks all the Members of the House who have worked to address concerns expressed by electric cooperatives throughout this process. We have much work ahead of us and must continue to improve this bill before it is enacted into law,” he said.
Electric co-op leaders continue to have significant concerns about the bill. English said, “We look forward to working with the members of the U.S. Senate to make significant improvements to this bill to make it even more workable, affordable, and fair.”
Specifically, electric co-ops and NRECA will work to:
• Make sure the emissions caps, particularly in the first decade of the program, are consistent with the availability of technology - the caps in the current bill remain too stringent.
• Ensure that emission allowances for the utility sector are distributed based on emissions to minimize the additional costs to the consumers who will be most affected by the reductions required by the bill.
• Improve the cost-containment provisions of the legislation to avoid price shocks.
• Make other improvements to the bill that will make it more workable, affordable, and flexible.
English said, “NRECA is committed to working with Congress to develop climate change and energy legislation that achieves the nation’s energy and environmental objectives in the most affordable manner possible.”
What’s next? The debate moves to the Senate where Democratic Senate leaders hope to move the bill through as quickly as possible. Co-op leaders are asking co-op members to remain engaged and to contact their representatives in Congress.
Senate Chairwoman Barbara Boxer of California expects to mark up a bill in early August. The real debate will occur after that markup and on the Senate floor. It is unlikely
the House bill can pass the Senate, but a climate bill can pass the Senate, according to NRECA. Ideally any legislation that passes would have a large research and development investments component to develop the technology needed, and timelines that are flexible enough to not damage the economy.
Co-op member e-mails and communications need to keep flowing to both the House and the Senate. The House needs them because if the bill moves through the Senate, it will go to conference and then a conference report will have to be voted on in the House and the Senate.
English credits his staff, all the co-op leaders and the 370,000 co-op member-consumers from across the country that sent the affordability message to Congress for helping convince the House leadership to make some adjustments to the legislation. English, a former congressman from Oklahoma, says while messages from electric co-op leaders carry a lot of weight on Capitol Hill, nothing compares to the voices of co-op members themselves: the 42 million hard-working citizens that will ultimately foot electric bills impacted by federal climate change policy.
If you are concerned about affordable climate change legislation, become a part of the conversation today, and join the hundreds of thousands of electric co-op members already involved in the Our Energy, Our Future™ grassroots campaign. Please visit www.ourenergy.coop today.