Manager's Message

September 2009 (archive of past message's)

Message from the General Manager . . .

We Need A “Cap” on Cap & Trade

This issue is a follow-up to letters sent by the Cooperative in recent weeks asking folks to help keep our congressional delegation aware of our concerns about the potential cost of climate change legislation. Voices from consumers across New Mexico must be heard over special interest groups and businesses interested in turning a profit at the expense of consumers. Legislation passed by the United States House of Representatives in late June, H.R. 2454, also known as the American Clean Energy and Security Act, now serves as a basis for discussion in the Senate. Even now, while the attention of the nation is focused on health-care reform, several key Senate Committees are holding hearings on climate change legislation.

At the core of the climate change proposal lays a cap-and-trade system to reduce carbon dioxide emissions. Under cap-and-trade, greenhouse gas emissions, including carbon dioxide, from power plants and other sources would be required to stay below a set limit, or Cap. All emissions would then have to be accounted for by allowances issued by the federal government, which could be traded or sold under a mechanism similar to the way the stock market works today. In past issues of this publication we have calculated the monetary impact to members of Farmers’ Electric under varying levels of a carbon tax. As Congress acts on climate change legislation they will be directly responsible for increasing our electric bills – the questions is, how much?

With the passage of H.R. 2454 several groups have spent considerable time and effort to determine the financial impact to consumers if the legislation were to become law. One group, the Congressional Budget Office (CBO), a non-partisan arm of Congress that prepares fiscal estimates and budgets claims the increase in energy costs will be about the same as a postage-stamp-per-day for the “average” homeowner by year 2020. In fact, I recently attended an energy conference in Las Cruces hosted by Representative Harry Teague and had an opportunity to sit down with Congressman Teague and Secretary of the Department of Energy, Dr. Steven Chu. Both Congressman Teague and Secretary Chu made a point to discuss the expected “postage-stamp-per-day” cost to consumers. However, estimates provided by other sources are much higher and that continues to concern me!

According to Glenn English, Executive Director of the National Rural Electric Coop- erative Association (NRECA), the Energy Information Agency (EIA), an independent statistical Agency within the Department of Energy, also provided detailed analysis of the legislation. The EIA modeled one scenario where new carbon-control technology was not developed or readily available and consumers were exposed to the full-impact of legislation upon becoming law. Under this scenario the cost per household more than quadrupled. Results from both reports underscore the economic uncertainty surrounding cap and trade legislation.

In our discussions with Congressman Teague and Secretary Chu, we emphasized that if Congress believes the cost to consumers will be as little as a “postage-stamp-per-day”, Congress should be willing to guarantee that result in writing. How can Congress do this? In cap and trade legislation developed last year, with the help of Senator Jeff Bingaman, an economic “safety valve” was included. This safety valve was designed to limit the cost of cap and trade to consumers. While Congress believes climate change legislation will cost consumers just a “postage-stamp-per-day,” consumers can’t just sit back and see if those estimates are correct. Consumers must insist on a “CAP” on cap and trade!

By now every member of Farmers’ Electric should have received letters and cards encouraging folks to join the Our Energy, Our Future grassroots awareness campaign. By participating in the Our Energy, Our Future grassroots campaign our national association, the National Rural Electric Cooperative Association (NRECA), will continue to send up-to-date and relevant messages to members of Congress as the debate continues. Our New Mexico delegation will know that the message was sent specifically from each of the 320, and growing, members of Farmers’ Electric who have signed up since early May! Please, if you haven’t already done it, take the time today and fill out this card and return it to the Cooperative in the self-addressed envelope. Make your voices heard in Washington!

Until Next Month,

Lance R. Adkins

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