Call it what it is, cap and trade a tax
Pressure is mounting in Congress to do something about climate change. And while political debate in Washington, D.C. may seem noble, the outcome could have a significant impact on everyone’s electric rates.
In a February 27th letter to the president, Glenn English, CEO of the National Rural Electric Cooperative Association said a provision in the president’s fiscal 2010 budget outline to auction carbon emissions credits (cap and trade) as part of a massive revenue raising scheme would have a devastating effect on the affordability of electricity.
Cap and trade involves limiting the level of carbon emissions from industries which are actually producing useful commodities, like electricity. The emissions credit, determined by the government and then turned over to Wall Street, would allow the highest bidder to buy the rights to operate within the electric industry. The proposal is expected to raise $645 billion between 2012 and 2019 and these ‘climate revenues’ will become the sixth largest source of federal income.
Collectively, co-ops across Indiana and the country fear the cap and trade approach will only escalate consumers’ monthly electric bills, and unfairly punish states like Indiana that have historically relied heavily on low-cost coal to generate electricity.
Indiana would be hit especially hard since nearly 70 per cent of our electricity is generated from coal and natural gas. Current cap and trade proposals would raise Indiana electric bills by at least 30 percent and the resulting public outrage will be wrongly focused on REMC instead of Washington. Politicians know this and that’s why they won’t call cap and trade what it truly is -- a tax.
The REMCs are not against clean air technology. As a matter of fact, in our service territory, the REMC 2009 power portfolio includes renewable power (wind, methane landfill gas) at 4.3%, nuclear at 6.1% and low emission synthetic gas production 15.3%.
The area Touchstone Energy Cooperatives are committed to providing affordable and reliable power in an environmentally responsible fashion. However, investments in clean and green power must be made with the impact on electric bills in mind.
Recognizing that it is your money at stake in this debate, we encourage you to take action by going to www.ourenergy.coop and complete the prepared letter. Urge Congress to work with electric co-ops to meet both federal public policy goals and your need for affordable, reliable electricity.