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Electricity providers warn of price hikes

Associated Press / April 24, 2009
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WASHINGTON - American consumers would face higher electricity prices if Congress were to pass a global warming bill without giving utilities allowances to emit greenhouse gases, electricity providers warned yesterday.

"Revenues associated with pricing greenhouse gases would be returned to the very consumers who would be at risk for paying higher energy prices," said Richard Morgan, who leads the District of Columbia's Public Service Commission.

These higher prices would be the result of legislation that would put a price on the gases linked to global warming.

The providers say the best way to keep the electricity sector from passing on the cost of reducing greenhouse gases is to initially give away allowances to emit pollution, not sell them, as proposed by President Obama.

The president's budget assumes that allowances will be sold and uses the projected $650 billion in revenue to help people pay for higher energy costs and to develop new, more climate friendly energy sources.

"It should not be legislation that is designed to raise revenue. . . . It should be something that is trying to achieve its objective of reducing carbon emissions in the country and that alone," said Glenn English, CEO of the National Rural Electric Cooperative Association, which represents 42 million consumers living in 47 states.

If the allowances are sold, electricity customers will face what Jeffry Sterba, who spoke on behalf of the Edison Electric Institute, called a "double whammy" - paying for both the price of the allowance and the cost of technologies to reduce emissions.