Clean Energy Jobs and American Power Act

Many of you know that I have written several columns this year trying to inform Cooperative members about the proposed Climate Change Legislation that is currently being considered by the U.S. Congress. This month, I am writing yet another column on this issue in an attempt to emphasize the importance of this very critical piece of legislation.

In June of this year, the U.S. House of Representatives narrowly passed a contentious federal climate change bill that includes a cap-and-trade (tax) provision beginning in the year 2012. As this legislation then moved to the U.S. Senate, your Cooperative mailed letters informing you as Cooperative members about the impacts of this legislation including how it could affect electricity prices. In addition, all Illinois Cooperatives mailed cards, addressed to each Illinois Senator, to their members regarding our concerns with the proposed legislation. Members were asked to voice their concerns by signing the cards and placing them in the mail. I am very pleased to inform you that at the time this article is being written, 198,561 cards signed by Illinois Cooperative members have beeen mailed to the Illinois Senators. This is an overwhelming response from Illinois members and indicates that many people in Illinois share your Cooperative's concerns about this legislation.

The U.S. Senate version of Climate Change Legislation has been renamed and is now known in the Senate as S. 1733 "Clean Energy Jobs and American Power Act". Unfortunately, the latest version of this bill, which was released on October 24th, does not adequately address electric cooperatives' concerns. In fact, this Senate draft is actually worse than the previous, contentious, narrowly passed U.S. House Bill. The following is a brief summary of the key problems in the Senate draft version:

The caps on emissions and timelines are unachievable: The new Senate version calls for a 20% reduction in greenhouse gas emissions from 2005 levels by 2020 versus the House Bill that called for a 17% reduction. This leaves insufficient time to develop, commercialize and deploy the technologies needed to reduce emissions at this level.
Allocation of emissions allowances creates great regional disparities across the U.S. and specifically penalizes the Mid-West states: The new Senate version retains the 50-50 allocation formula passed by the House that provides coastal states with more free allowances than needed while leaving mid-western states with far fewer allowances than needed. This type of allocation formula will result in mid-western states paying drastic penalties while some coastal states will not pay any penalties and could even profit from the sale of free allowances. Illinois ranks third lowest in terms of free allowances received based upon percentage of allowances needed. This means Illinois will be penalized severely.
Inadequate cost containment measures to help promote economic stability: The cap-and-trade (tax) portion of this bill could cause drastic harm to our nation's economy and could certainly hurt the economy in Illinois and locally. For the past several months, proponents for Climate Change Legislation stated that allowances would trade in the $12 - $15 range and have used these numbers in many studies to produce their results. The new Senate draft version calls for a market stability auction process which would auction off an additional 15% of annual allowances with a minimum auction price of $28 for allowances, which is 100% higher than the original quoted price. This legislation fails to provide a strong cost containment mechanism to protect electricity consumers.

In addition, I want to emphasize that the vast majority of the additional dollars that you would pay in your electric bill due to this legislation will not be used to develop needed technologies to reduce carbon emissions.

Although this legislation was given a new name "Clean Energy Jobs and American Power Act", it is still approximately the same bill as the House version. It is interesting to note that according to a recent article on the study conducted by the government's Energy Information Administration (EIA), the proposed legislation, over time, would likely become a drag on the economy and reduce job creation by hundreds of thousands of jobs under any of the 11 different sets of assumptions that it analyzed.

Given that the Senate version of the legislation currently fails to address the Cooperative's concerns as stated above, your Cooperative is urging Senators to oppose this bill. If you share these concerns, please contact your U.S. Senators as follows:

Senator Dick Durbin Senator Ronald Burris

309 Hart Senate Building 387 Russell Senate Office Building

Washington D.C. 20510 Washington D.C. 20510

Ph: (202)-224-2152 Ph: (202)-224-2854

See you next month and as always, "We'll keep the lights on for you."