posted
Mar 6, 2009 by Lamar Thames
Thanks to Larry Horne of Clay Electric for supplying a link to the following letter:
In a letter to President Obama, National Rural Electric Cooperative Association CEO Glenn English voiced strong objections to the Administration’s plan to auction the carbon emission allowances under a cap and trade scheme.
In the letter, English pointed out that “[s]uch a program would only serve as a backdoor, variable tax on consumers. Even worse, the level of the tax would be determined by Wall Street and large multi-national energy companies who would likely be the highest bidders in any auction.”
Cooperatives have pledged to work with the Administration and Congress to find a least-cost, consumer-friendly approach to meeting national climate change goals. The auction scheme, however, disadvantages regions historically dependent on coal and unnecessarily burdens consumers: “auctioning allowances is not necessary to achieve the environmental objective of a cap-and-trade plan – namely to achieve significant, long-term reductions in greenhouse gas emissions.” According to NRECA analysis, “[t]hose reductions are achieved by the cap established in the bill.”
Administration officials have included revenues from carbon emission allowance auctions in the President’s proposed budget and have asserted these revenues can help pay for other government expenditures.
On behalf of cooperative consumer members, whose monthly bills would likely increase at least 15 percent under this plan, English rejected the Administration’s approach: “Auctioning allowances only serves to raise revenue for the government. If the government needs to raise revenue to fund important national priorities, those taxes should be set by the government and collected by the IRS, not set by Wall Street and collected by utilities.”
While electric cooperatives are eager to settle the debate over how to increase the price of carbon in order to move ahead with plans to meet projected demand, they have an obligation to try to prevent unnecessary increases that would strain the ability of their members to pay for electricity. English reiterated the cooperatives’ pledge to work with the federal government to hammer out a “sensible” plan.
