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On July 3, the U.S. House of Representatives passed the American Clean Energy and Securities Act of 2009, handing to the Senate a lengthy bill that many in the House leadership hope will address climate change.
Some hailed the vote as a monumental step toward creating a cap on the greenhouse gas pollution the U.S. emits from CO2. Others criticized it as not doing enough. The ACES bill, HR2454, was created to establish a program for "capping" emissions from fossil fuels and some industrial sectors. It requires permits for those emissions and then increases the cost of the permits over time. There is no argument that if ACES or any other vehicle addressing climate change passes, energy bills for consumers will rise. Everyone from agricultural interests, to coal interests, to electric utilities, natural gas companies and Wall Street "got something" out of ACES. Many were given free permits for an extended time; other industries got deals to lift or change how their other greenhouse gases are regulated, or got rate breaks that help their bottom line. But what do consumers get? All they get is a promise that some third party will pass along those financial benefits to ordinary citizens to compensate for inevitable increases in their utility bills. Government and scholarly analyses suggest these carbon permits are valued at about $50 billion to $100 billion annually. About 35 percent of the value of the permits generated by the revenues when the permits are sold is allocated for ratepayers but with a catch: These proceeds are distributed through the utility that distributes your electricity. The bill gives utilities great flexibility in how they share those proceeds with consumers. Utilities don't have to pass them straight through as rebates. For electric distribution utilities, the only restriction is that the proceeds be used "exclusively for the benefit of retail rate payers." Local electric distribution utilities could easily get legally creative and convince Alaska regulators that "consumer benefits" include capital development projects the utility is interested in funding. In the long run, maybe consumers will benefit. Or maybe not. There is a better alternative. Make it simple and require that the benefit from selling emission allowances be given directly to the consumers. It has been well documented that Alaska is ground zero for climate change. Many Alaskan communities have some of the highest energy bills in the nation. As Alaskans and as consumers we have many reasons to pay attention to Senate action on climate change. Sen. Lisa Murkowski is now part of the Republican leadership and the ranking Republican on the Energy Committee. Sen. Mark Begich is an effective Democrat who serves on the Commerce Committee. Both are well positioned to look out for our interests. To ensure that the consumer gets some relief from rising energy prices as a result of limiting CO2 and other greenhouse gas pollution, the Senate should make sure that any climate change bill includes strong and clear provisions that ensure that consumer benefits go directly to consumers as checks. Don't leave it to local utilities and regulators to decide how we consumers will benefit from allocating greenhouse (CO2) gas emissions permits. Let's leave that one to you and me.