Missouri utilities express concern over federal climate bill

Tuesday, June 23, 2009 | 12:43 p.m. CDT

JEFFERSON CITY — Missouri utility officials expressed concern Monday that customers could pay more under federal legislation that would limit carbon emissions.

Their comments came during a forum Monday at which utility officials gave presentations for regulators and some lawmakers about the potential fallout from the federal climate bill and detailed some efforts to respond, such as using more renewable resources.

An analysis by a trade group for municipal utilities estimates that a federal cap-and-trade system for carbon emissions could increase the average electric rate in Missouri by 10 percent in 2015, compared with 2005. In 2020, the increase would be 17 percent, and by 2030, rates would be 82 percent higher, the study found.

The Missouri Public Utility Alliance, which presented the study during the forum in Jefferson City, said it feared those numbers are optimistic.

"When I saw the results of this study, I lost the ability to breathe too," said Duncan Kincheloe, the organization's general manager and chief executive officer.

The federal climate bill seeks to cut greenhouse gas emissions by 17 percent from 2005 levels by 2020 and 83 percent by 2050 through a cap-and-trade program that allows pollution permits to be bought and sold. It also requires electric utilities to produce at least 12 percent of their power from renewable sources, such as wind and solar energy, by 2020, and an additional 8 percent in energy efficiency savings. The bill cleared a key House committee last month.

"We kind of have an idea that there is this train that is about to leave the station from Washington. It's going to be headed straight for us, and do we really have a plan on what we're going to do about it?" said Robert M. Clayton III, Public Service Commission chairman. "We use a lot of coal here; we have a lot of carbon emissions."

The federal climate bill is sponsored by Democratic Reps. Henry Waxman, of California, and Edward Markey, of Massachusetts. Waxman has said the bill is a decisive act to deal with global warming and improve the country's energy security. He predicted it would make the U.S. a global leader in clean energy jobs.

Under the proposed cap-and-trade system, allowances for carbon emissions would be distributed under a formula. Missouri utility officials said that system is unfair.

Missouri would receive 64 percent of the allowances it needs, while the rest would need to be bought, said Barry Hart, the executive vice president and CEO for the Association of Missouri Electric Cooperatives. But California would receive 155 percent of the allowances it needs, which would allow it to sell the excess.

Also, the Public Utility Alliance study concluded that several states, such as California, Washington, Connecticut and New Hampshire would see electric rate decreases in the short term.

"Lives are going to change," said Hart, who urged utility groups to work with federal leaders to change the legislation so that Missouri gets a better deal.

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