Coal-Burning Electric Utilities Still Commanding Dem Senators’ Attention

As reported here yesterday,
transportation is a close second to electric power generation in the
not-so-great race to become the nation’s fastest-rising source of

20080604_winona1_33.jpgMinnesota roads, like this one, produce a greater share of the state’s pollution than electric utilities. (Photo: MPR)

as the climate change debate heats up in the Senate, it’s interesting
to see lawmakers press so hard for more valuable pollution permits to
be given away for free to the dirtiest electric utilities — while
staying comparatively silent on cutting transportation-based emissions.

From a letter sent to Senate leaders yesterday by 14 midwestern Democrats:

We believe it is essential that we strive to formulate [climate change] legislation
that equitably distributes transition assistance across individuals, as
well as states and regions and economic sectors. We urge you to ensure
that emission allowances allocated to the electricity sector – and
thus, electricity consumers — be fully based on emissions as the
appropriate and equitable way to provide transition assistance in a
greenhouse gas-regulated economy.

If the goal is to "equitably distribute transition assistance across
… economic sectors," shouldn’t the Senate climate bill distribute
more than 3 percent of its expected revenue to help states plan for cutting emissions from transportation?

question certainly isn’t being asked by the 14 Democrats, whose request
boils down to seeking more freebies for the biggest coal burners. As it
stands, electric utilities can expect to get more than a third of the
climate bill’s pollution allowances, while transit and local
development can hope for somewhere between the House’s optional 1
percent and the Senate’s average of 3 percent.

And it’s
worth singling out Minnesota, where both senators (Amy Klobuchar and Al
Franken) signed the freebies-for-coal letter. According to yesterday’s state pollution report
released by Environment America, transportation accounted for a larger
share of Minnesota’s statewide emissions in 2007 (35.4%) than
electricity (34.3%).

report found 19 other states where transportation eclipsed electricity
as a pollution producer: Connecticut, Hawaii, Maryland, Maine,
Massachusetts, Nevada, New Hampshire, New Jersey, Oregon, Washington,
Rhode Island, Virginia, Vermont, South Dakota, New York, Idaho,
Louisiana, Alaska, and California.

Admittedly, the 20 states
that produce less emissions from electricity tend to be consumers of
the power produced in coal-dependent states such as Ohio and Illinois,
home to senators that signed the pro-electric utilities letter. But
perhaps in a more "equitably distributed" Congress, senators from
states that produce more transportation emissions would be pushing for
solutions targeted to that sector of the economy.

  • I am having trouble with the reasoning here.

    When they say they want to “equitably distribute transition assistance” they mean that they want to give free permits to people who are hit by carbon pricing. Eg, if you live in a state whose utility relies only on coal, you would be harder hit by carbon pricing than someone who lives in a state whose utility relies heavily on hydro and nuclear. Therefore, they are giving free permits to utilities who rely heavily on coal during the transition period, and requiring the utilities to pass the saving through to consumers, so their customers are not faced with a sudden increase in electricity prices.

    Applying the same reasoning to transportation, they would give free permits to oil companies, so their customers are not faced with a sudden increase in gasoline prices.

    I think the transitional aid for utility customers does make some sense: it is not the fault of people in Ohio that their utility chose to rely on coal. But I don’t think we want to say the same about gasoline customers.

  • You’re right on when you say that free permits are intended for constituencies that are affected by carbon pricing. But think of a resident in a community where car ownership is effectively mandatory to get from home to work and/or school, where transit has not yet been developed and walkable development isn’t widely available. They may be gasoline customers, but providing them transitional help (in the form of local grants to encourage the type of planning that cuts transportation-based emissions) would go a long way towards making more efficient transport options available in more places.

    That’s the reasoning, as it were.

  • Okay, that makes some sense. We can go a step further and say that they should take the same approach to coal burning utilities: give them aid to convert to solar, or give their customers aid to buy energy efficiency upgrades.

    But I don’t think we should be all that harshly critical of senators who are “seeking more freebies for the biggest coal burners” because:

    1) Utilities are required to pass the value of free emission permits on to their customers in the form of lower rates.

    2) Utilities have essentially the same incentive to convert to clean energy, regardless of whether they pay a given amount for permits or get those permits for free and are able to sell them for that given amount. In either case, it makes economic sense for them to shift to clean energy sources that are cheaper than the cost of coal + permits.

  • Army Vet

    Everyone will realize it is too soon to shut down coal mining completely.  Check back on you paid for electricity before the Progressives took over in D.C..  The economy is number one on all Americans minds.  Unemployment/Jobless is fueling Obama’s defeat in November.

    VOTE NObama November 6, 2012



Transportation Allowances in the Climate Bill: A Tale of Two Modes

To understand why the climate change bill is a top priority for urbanists, it’s crucial to understand the emissions allowances that the legislation distributes. The allowances essentially put the "trade" in "cap-and-trade" — whichever industry or state government holds them can benefit from their monetary value or use them to emit pollution under the "cap." […]