Utilities warn of rate increases in cap-and-trade bill

An analysis of the cap-and-trade bill pending in the U.S. Senate by Missouri's utilities and electric cooperatives concluded that the legislation - if passed in its current form - would mean steep rate increases for Show-Me State residents.

According to the study, the state's ratepayers can expect their electric bills to jump 12 percent to 50 percent by 2012, if senators pass House Resolution 2454, which caps carbon dioxide emissions and establishes a system for trading and buying emissions allowances.

By 2020, average electric rates in Missouri could soar 25 percent to a staggering 77 percent if a costly cap-and-trade system forces utilities to switch to natural gas from coal - the Show-Me State's primary energy source.

The Missouri Public Utilities Alliance and City Utilities of Springfield spearheaded the cost analysis after the U.S. House of Representatives passed HR 2454 - also known as the American Clean Energy and Security Act or the Waxman-Markey bill - in late June, said Floyd Gilzow, MPUA director of public affairs.

Missouri's three investor-owned utilities - Empire District Electric Co., Ameren Corp. and Kansas City Power & Light Co. - and the Association of Missouri Electric Cooperatives also participated in the study, which appears to be the only one of its kind in the country, Gilzow said.

Letters highlighting the study's findings and the utilities' recommendations were sent to every federal lawmaker and signed by the respective executives, including CU General Manager John Twitty and James Jura, CEO and general manager of Springfield-based Associated Electric Cooperative Inc.

Maria Speiser, a spokeswoman for U.S. Sen. Claire McCaskill, D-Mo., said in an e-mailed statement that Missouri's junior senator has some reservations about the bill.

"Sen. McCaskill recognizes that climate change is a serious problem that must be addressed, but she won't support a bill that unfairly passes the costs of fixing it to Missourians and their businesses," the statement read. "People in Missouri have no choice but to be dependent on coal-based utility companies. She will be paying close attention to how families and small businesses will be impacted."

Read SBJ's Sept. 14 issue for more on the cap-and-trade issue.