Carbon tax: S.C. Utilities Warn Could Cause Bill Increase
Federal legislation that would charge utilities a tariff on greenhouse gases emitted from power plants could increase electric bills for some S.C. consumers by 50 percent, utility officials said.
The measure, which a U.S. House energy panel will take up this week, is designed to fight global warming by lowering carbon dioxide emissions. At the same time, it would encourage utilities to develop clean energy sources like solar and wind power.
But in a state like South Carolina, which relies on coal – a source of the greenhouse gas carbon dioxide – to generate 61 percent of its electricity, the proposal could lead to as much as a 50 percent hike in electric bills, utility officials say.
“I think that the message that’s important that is not getting out there as loudly as it needs to is that there is a price tag, and there is going to be financial impact on the utility customers, and it’s not going to be insignificant,” said Eric Boomhower, spokesman for South Carolina Electric & Gas Co.
Boomhower did not say how much SCE&G rates could rise.
The Columbia-based utility, which serves 650,000 electric customers, generates about 45 percent of the electricity it sells from coal-fired power plants.
State-operated Santee Cooper, which serves 2 million customers directly and through the state’s 20 electric co-operatives, relies on coal-fired plants to generate 90 percent of its power.
Reports indicate Congress is considering a carbon tax ranging from $20 to $40 a ton, said Lonnie Carter, president and CEO of Santee Cooper.
“That could mean Santee Cooper customers would face rate increases of at least 30 to 50 percent,” Carter said. “That would have a devastating impact on our economy, and let’s face it, there are already too many South Carolinians already suffering in this recession.”
State law allows utilities to pass through any federal charges on fuel costs to customers.
The proposal is included in legislation being offered by the House Energy and Commerce Committee, chaired by U.S. Rep. Henry Waxman, D-Calif.
Supporters aim to cap total carbon dioxide emissions at 20 percent below 2005 levels by 2020. Utilities in states that don’t meet the limits could purchase allowances from utilities in states that do meet the standard, known as cap and trade.
The 600-page bill under consideration zeroes in on coal because 28 percent of all greenhouse gas emissions in the United States were produced by coal-fired electric generating plants, according to a 2007 study by the Environmental Protection Agency.
“With coal-fired power plants emitting more than 30 percent of our global warming pollution, regulating their carbon dioxide is essential to making real progress in the fight against global warming,” said David Bookbinder, chief climate counsel for the Sierra Club.
A tariff on carbon emissions could hamper South Carolina’s struggling economy, a state legislative report released in February found.
The Public Utilities Review Committee study noted that South Carolina ranks fifth in annual electric consumption because of its hot, humid summers and because 20 percent of its housing is older, inefficient mobile homes. The state ranks 40th in median household income.
“The two converse rankings demonstrate the potentially devastating economic impact that a carbon cap-and-trade system or tax on this state’s electric utilities might have on South Carolina’s economy and its citizens,” the report said.
Advocates for a carbon tax claim the economic fallout won’t be as devastating as the utilities predict.
Higher rates will force consumers to lower consumption of electricity, James Hansen, director of NASA’sGoddard Institute for Space Studies, said during a recent news briefing.
Hearings on the measure by a House Energy subcommittee are expected to begin this week, and the full committee should take up the measure the week of May 11, according to the panel’s calendar.
The Energy Committee expects to be finished with its work on the bill by Memorial Day.
Spokesmen for SCE&G and Santee Cooper said the utilities have not taken positions on carbon tariffs under a cap-and-trade plan, but are monitoring legislation.
Both said they support efforts to reduce carbon emissions and lower the global warming threat.
Santee Cooper is funding a University of South Carolina clean-coal research program.
“There is no practical technology available today that addresses carbon emissions,” Carter said.
“In short, if Congress requires a carbon tax or cap-and-trade, utilities have no choice but to pay it.”
Via The State
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
