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Senate Climate Bill May be Reshaped by Coal States

coalSenators from states heavily reliant on coal-fired electricity want the climate bill to apportion more free carbon permits to their states, reports Reuters.

Without such changes, electricity consumers in certain states would have to pay unfairly higher rates, a group of 14 Democratic Senators stated, in a letter to other Senators overseeing the climate bill negotiations.

The bill’s current formula for divvying up free carbon permits would lead to fewer permits for some sparsely populated or otherwise coal-dependent states, driving up the cost of electricity there.

“The House bill falls short of that equitable distribution goal with its formula for allocating allowances to local distribution companies based 50 percent on emissions and 50 percent on sales. Unfortunately, the Senate bill currently under consideration includes the same 50/50 allocation provision,” the letter states.

“Under the proposed 50/50 formula, utilities that are more coal dependent will need to purchase even more allowances than they would have if all allowances were allocated based on emissions, and those higher costs will be passed on to their customers. Meanwhile, many utilities with relatively lesser emissions will receive sufficient allowances to completely cover their initial requirements. Thus, their customers will experience no price increases resulting from the legislation,” the letter continues.

Senators who signed on to the letter are:

– Tom Harkin, Iowa

– Al Franken, Minnesota

– Roland Burri, Illinois

– Byron Dorgan, North Dakota

– Herb Kohl, Wisconsin

– Russell Feingold, Wisconsin

– Kent Conrad, North Dakota

– Michael Bennet, Colorado

– Amy Klobuchar, Minnesota

– Mark Udall, Colorado

– Robert Byrd, W. Virginia

– Cark Levin, Michigan

– Debbie Stabenow, Michigan

– Sherrod Brown, Ohio

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One thought on “Senate Climate Bill May be Reshaped by Coal States

  1. Basically, these senators are saying that they don’t want their coal-based utilities punished for their lack of forward-thinking and lack of strategic planning.

    Sounds like some utility companies saw a “cost of carbon” coming and shifted their energy sources to cleaner production in anticipation of that. Others apparently decided they could ignore the future and continue using coal coal coal. Now, like the US auto companies, they are trying to avoid having to pay the price for that poor decision.

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