Let your voice be heard

in our nation’s capital

On June 26, the U.S. House of Representatives passed H.R. 2454, the American Clean Energy and Security Act, or “Waxman-Markey” bill, by a narrow 219 to 212 vote. Seven Indiana representatives voted against the bill while two, Reps. Baron Hill and Andre Carson, voted for it. The 1,200-page bill now moves to the Senate where hearings may begin later this summer.

H.R. 2454 creates a new federal “cap and trade” program for greenhouse gas emissions, including carbon dioxide or CO2, that will lead to substantial electric rate increases for Indiana businesses and consumers, including those served by Bartholomew County REMC.

Indiana relies heavily on coal for electricity generation and CO2 is a byproduct of the combustion process. Earlier this year, the Congressional Budget Office (CBO) estimated the price of a CO2 “allowance” — a permit to emit one ton of CO2 — might sell for $15 in an auction market in 2012 when the program begins. The CBO recently increased that estimate to about $30 per ton.
Costs could easily move higher because H.R. 2454 places no restrictions on auction prices or participants which increase the likelihood of price volatility and market speculation. No workable technology exists today to reduce CO2 emissions in coal plants and without a technology option, allowances
may become more expensive as annual CO2 emission “caps” decline (emissions are targeted to drop 80 percent below 2005 levels by 2050).

No one knows where allowance prices may move over time. Hoosier Energy, our cooperative power supplier, estimates a $30 price may result in a $0.012 per kilowatt-hour (kwh) increase in 2012 rates. Higher auction prices will result in larger increases. Indiana consumers can expect additional increases in gasoline, diesel, and natural gas costs that will also impact rates. Bartholomew County REMC will continue efforts to minimize rates, but will have no alternative other than to recover these costs from consumers.
 

The bill, described by some as the largest tax increase in American history, could create hundreds of billions of dollars in federal revenues from auction proceeds over time. The allowance allocation in H.R. 2454 also creates a massive wealth transfer from Indiana and the Midwest to East and West Coast states where consumers may actually see declines in average electric rates. Their savings will be funded, in part, by higher rates paid by Bartholomew County REMC members, and perhaps as much as 80 percent of new federal revenues will be used for programs that have nothing to do with reducing greenhouse gases or developing cleaner energy resources.
 

America can have cleaner energy without pricing electricity beyond the reach of millions of households, discouraging business investment and job creation, or creating regional disparities where a few states benefit at the expense of many others. H.R.2454 did not achieve that balance. Bartholomew County REMC, our power supplier, and state and national associations worked to inform members and Congress about negative impacts of the bill and suggested constructive options. The bill was improved as a result, but significant changes are still needed to keep Indiana electric rates affordable.
 

Your voice is more important than ever. Express concerns about the impact of H.R. 2454 on Indiana electric costs and encourage Sen. Lugar and Sen. Bayh to keep electricity affordable.
 

Go to www.ourenergy.coop and send them an e-mail or contact them directly. Sen. Lugar can be reached at 202-224-4814 or 202-228-0360 (fax). Sen. Bayh can be reached at 202-224-5623 or 202-228-1377 (fax).