One of the highest priorities Congress has this year is to pass legislation in regards to climate change.  In fact, currently a bill called the Warner-Lieberman bill and an amendment to this bill, the Boxer amendment, are in the Senate. Both are named for the senators who introduced them and focus on limiting the amount of carbon dioxide released in the atmosphere.   

In evaluating this bill, the Environmental Protection Agency (EPA) believes it will increase electric rates by 44% above what they would otherwise be by 2030.  The EPA also assumes that existing coal-fired power plants, which currently provide about 50% of U.S. electric power, will be shut down due to this bill, to be replaced with at least 150% growth in new nuclear facilities, plus other “alternatives.” Yet there are only 104 current U.S. nuclear plants, and the industry itself says it’s optimistic to think even 30 more can be built by 2020.1  They also believe that it will add another fifty cents to already record high gas prices.

This proposed law includes a very lucrative “cap and trade” program to regulate carbon dioxide emitting industries.  Essentially, allowances would be granted to each business and the allowed amount would decline each year.  If a company produced less than their allotment, they could sell the credit on the open market.  If a company needed more credits, they would have to purchase them from the government through an auction type arrangement.  Some politicians favor this approach as it is an indirect tax on us, American tax payers. A direct tax – say, on gasoline – would be far more transparent, but it would also be unpopular. Cap and trade is a tax imposed on business, disguising the true costs and thus making it more politically palatable. In reality, utilities will merely pass on these costs to customers, and ultimately down to all Americans.  The Congressional Budget Office estimates that these auctions would net them $304 billion by 2013 and $1.19 trillion over the next decade. 2

Some of our members have asked how this affects French Broad EMC since we do not own any CO2 emitting generators.  We purchase the vast majority of the energy we sell from Progress Energy, which makes around half of its electricity with coal-fired generation.   Any cost increases are passed directly to French Broad EMC through our wholesale contract with Progress Energy.  In the end, these costs must be passed on to our members.

It makes no sense to have Americans bear all this cost when we still have no control on the amount of carbon dioxide emissions countries like China and India produce.  Without a true global effort, we will have paid a tremendous price for little if any reduction in greenhouse gases in the atmosphere.

Cleaning up the environment is something we are all concerned about, but how we do it is equally important.  As a member of the National Rural Electric Cooperative Association (NRECA), French Broad EMC has joined forces in      opposing this bill and the corresponding amendment for one simple reason, and that is the cost to our customers.  We need your help as voters and utility rate payers to tell our legislators that this potential law is not in our best interest economically and needs to be reevaluated. 

Senator Richard Burr has seen the problems with this bill and has indicated that he will not support this legislation under the current draft.  Unfortunately, Senator Elizabeth Dole has said that she would support this bill in its current form.  We urge you to thank Mr. Burr for his support and ask Mrs. Dole to reconsider her decision.  Our legislators need to hear our voice on this issue.

Our national organization, NRECA, has  introduced the “Our Energy, Our Future” campaign to encourage a conversation  between electric cooperative members and their elected representatives about balancing affordable, reliable power with new laws on climate change.  The web site, www.ourenergy.coop, is available to help you begin this conversation by sending a message directly to your Representatives and Senators in Washington.  Or you may complete the form on page one of this newsletter and return it with your payment.  French Broad EMC will send emails on your behalf addressing the need for clean, reliable and affordable power for the future.  It is up to you to make sure our elected officials in Washington strike the right balance between environmental protection and electric rates.

Thank You,
Jeff Loven
Email: jeff.loven@frenchbroademc.com


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