A Climate Bill Passes The House

H.R. 2454: The American Clean Energy and Security Act of 2009 (ACES)

• On June 26, 2009 the House passed H.R. 2454 or “ACES”.

• It passed by a vote of 219 to 212.

• 22 Blue Dogs voted:Yes

• 30 Blue Dogs voted: No

• 16 Ag Comm Ds voted Yes (including Chairman Colin Peterson)

Why Did The Bill Pass?

• U.S. Supreme Court• Mass v. EPA• C02 is a pollutant• Based on an

endangerment finding, EPA has the authority to regulate C02 under the CAA.

Many Large Corporations Support A Climate Bill

• Duke

• Exelon

• Shell

• BP America

• General Electric

• Caterpillar

• John Deere

Nov. 2008 Elec: Washington In 3D

• Dems Control:• The House of Rep

(256 Ds to 178 Rs) (78 vote majority)

• The Senate (60 Ds to 40 Rs) (Filibuster proof)

• President is a Democrat

Deals Were Cut

• “The biggest concessions went to utilities…The utilities received not only tens of billions of dollars worth of free pollution permits, but also billions for work on technology to capture carbon-dioxide….” New York Times

Senate Action In September

• Sen. Boxer is Chairperson of the Sen. Environment and Public Works.

• Jurisdiction of climate change legis.

• Will consider legis in September

Three Mandates: The Cerberus Problem

• Renewable Electricity Standard

• Energy Efficiency Renewables Electricity Standard

• Cap and Trade• Each one is dangerous

to co-ops & we had to deal with them, at the same time.

Renewable Electricity Standard & Energy

Efficiency Resources Standard

• RES Mandate.• Begins in 2012 (6%).• 25% renewable

energy mandate/2025• 5 cents per kWH

penalty for noncompliance.

• 1 million megawatt hour exemption.

• EERS Mandate.• Begins in 2012 (1%).• 15% energy efficiency

savings/2020• 5 cents per kWH

penalty for noncompliance.

• No exemption

RES & EERS Problems Addressed

• RES Mandate• 4 million megawatt

hour exemption.• Decreased from 25%

to 12% by 2020.• 8% satisfied with

energy efficiency.• 5 cents per kWH

penalty was decreased to 2.5 cents.

• EERS Mandate

C02 Emission Caps in ACES

• 3% below 2005 C02 emissions by 2012

• 17% below 2005 C02 emissions by 2020

• 42% below 2005 emissions by 2030

• 83% percent below 2005 levels by 2050

4000

5000

6000

7000

8000

9000

10000

2005 2010 2015 2020 2025 2030

Cap and Trade

No Controls

1990 U.S. Emissions

Source: Van Ness Feldman, August 2007

H.R. 2454: ACES

Next Steps

• Make the caps less stringent: 17% reductions in C02 from the 2005 baseline by 2020 is too much.

• Distribution of allowances for free should be based on emissions only. Alaska increases from 73% to 80%.

• Establish a safety valve.

NRECA Forced Changes

• “The National Rural Electric Cooperatives Association…was squeezed out by the big utilities…But ultimately the head of the group, Glenn English…secured nearly $400 million in annual emissions permits to help the small co-ops.” New York Times

Improvements

• Small Electric Utility Pool was created. Electric utilities that sell less than 4 million megawatt hours will receive freely distributed allowances from a .5% pool. Co-ops will receive $300 million in allowances per year for 10 years.

• If an electric utility has more freely distributed allowances than it needs to meet the caps, the allowances will be redistributed to those electric utilities that need them.

NRECA Was Neutral In The House

• “The legislative process is a long one with many opportunities for improvement. We look forward to working with you and members of the Senate in making additional changes in HR 2454 as it moves forward from the House of Representatives. With this in mind and while we still have concerns about the bill, the National Rural Electric Cooperative Association and its members will not stand in the way of passage of this legislation.”

NRECA Can & Will Oppose An Anti-Co-op Bill

• The consideration of ACES in the House was only the first step in the process.

• ACES must still be considered in the Senate: friendlier forum.

• ACES could also be considered in a conference committee.

• NRECA can still oppose a Senate bill or a conference committee bill.