COLUMBIA — According to a study commissioned by AmerenUE, federal cap-and-trade legislation would cause Missourians' energy rates to increase by more than $200 annually if the state doesn't take steps to improve current energy procedures. The Joint Committee on Missouri's Energy Future heard testimony Monday on dangers of increased rates and ways to offset potential costs from the Waxman-Markey bill, also known as cap-and-trade. While a number of alternatives were discussed, all testimony touched on Missouri's main source of energy: coal.
"We're married to coal whether we like it or not," Public Service Commissioner Jeff Davis said during Monday's meeting in Columbia. Cap-and-trade would "double rates" within five to six years, Davis said, adding the legislation would provide "the largest wealth transfer in the history of mankind."
The "rate impact will be immediate and significant," said Shawn Schukar, vice president of energy delivery technical services for AmerenUE. While Schukar testified that "no silver bullet" exists to blunt the cost increase, he added that it is important to have a technological infrastructure — such as ensuring the grid is structured well — in place to deal with the new regulations.
AmerenUE Vice President of Regulatory Affairs Steve Kidwell said the "current legal and regulatory framework" of the state provides a hurdle to infrastructure investments. A partnership is necessary in order for utilities to begin investing in new technologies, Kidwell said.
Under cap-and-trade, energy companies would be required to pay the government for permits to emit carbon dioxide — a bi-product of burning coal — Schukar said in a presentation to the committee.
Gary Pendergrass, director of the Missouri Carbon Sequestration Project in Springfield, said that his project was developing ways to capture carbon emissions from coal and store them underground — an alternative to releasing them into the air.
Missouri has similar geology to other Midwestern areas that already store carbon emissions underground, Pendergrass said.
Sen. Kurt Schaefer, R-Columbia, described the project as "one of the most important projects going on in the state of Missouri right now." The ability to store emissions from burning coal "substantially changes the dynamic" when it comes to cap-and-trade legislation, Schaefer said.
Another alternative proposed to the committee was for Missouri to rely more heavily on energy derived from landfill waste.
"It just takes trash, and we all have that," said Tom Dunne, president of waste management services for Fred Weber Inc., a landfill in Maryland Heights.
Schaefer noted that landfill gas is considered renewable under proposition C, a ballot initiative passed last November that requires utility companies to eventually use 15 percent renewable energy.
Proposed cap-and-trade legislation would affect all energy consumers in Missouri, not only those serviced by AmerenUE.
"We're all in the same boat," said Duncan Kincheloe, general manager of the Missouri Public Utility Alliance, when asked by Schaefer how cap-and-trade would influence Columbia residents.
The Joint Committee on Missouri's Energy Future plans to present its findings to the Missouri General Assembly when the next legislative session begins in January.