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Public Statements

American Clean Energy and Security Act of 2009

Floor Speech

By:
Date:
Location: Washington, DC


AMERICAN CLEAN ENERGY AND SECURITY ACT OF 2009 -- (House of Representatives - June 26, 2009)

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Mr. BOSWELL. I will say, with some reservation, that I support H.R. 2454, the American Clean Energy and Security Act. I am pleased with the deal between Chairman Peterson and Chairman Waxman to protect America's farmers and ensure many of agriculture's concerns were resolved. They both should be commended for their hard work. This bill makes tremendous progress on jobs, energy, national security and the environment. However, one troubling issue remains. A formula partially based on retail sales means consumers in coal-reliant States, like Iowa and the Midwest, who need the most help will see greater rate increases than consumers in other parts of the country.

When Iowa's unemployment rate is at its highest in over 20 years, Iowans are struggling to repay student loans, pay rent, and put food on the table, why are we asking those of us in the heartland to shoulder more of the burden than others? This is neither fair nor equitable because it creates winners and losers.

I am not giving up. This bill is worth supporting; but it is my hope that when the House addresses this legislation again, the allocation formula will be more equitable for Iowans and Midwesterners alike.

I rise today with some reservation to support for H.R. 2454, the American Clean Energy and Security Act. I am proud that this legislation preempts potentially devastating regulation by the EPA, and responds to our constituents' demands to prevent that from happening. I am also proud that it would harness the most innovative workforce in the world to create a clean energy future, creating millions of jobs in the process. Energy independence is vital to our national security and economic future, and this legislation advances this goal while confronting the serious challenge of climate change.

However, when we started this process I had a list of many things which concerned me and needed to be addressed, such as fixing the indirect land use issues under the Renewable Fuel Standard-2, a robust agricultural offset provision which recognized early adaptors and was exclusively operated by USDA to implement and oversee the agriculture and forestry offset program, and the 50-50 allocation formula. I was pleased with the deal that was struck between Chairman Peterson and Chairman Waxman to ensure many of those issues were resolved. They both should be commended for their hard work.

However, one key concern has yet to be addressed. As currently written, this legislation provides local distribution companies with allowances through a formula equally weighted between historic emissions and retail sales. Since the intent of the legislation is to reduce emissions, and the intent of providing allowances is to protect consumers from price increases, basing allowances on retail sales reduces the legislation's effectiveness. While certain providers will receive enough allowances to offset 100 percent of the cost of compliance, many companies throughout the Midwest will be forced to purchase numerous allowances, passing those prices on to their consumers. Consumers in coal-reliant states such as Iowa--who need the most help--will see far greater rate increases than consumers in other parts of the country.

This doesn't have to happen. Congressman Loebsack and I offered an amendment to change the formula so that allowances will be distributed based solely on historic emissions. I am gravely disappointed that the Rules Committee did not make this amendment in order.

Under the amendment I had hoped to offer on the floor today, a utility would receive emission allowances based only on its emitting assets, like coal and natural gas-fired plants. It would not receive emission allowances for non-emitting nuclear and hydro assets, because they don't need them.

As such, there will not be enough allowances for higher-emitting electric utilities in the Midwest that need them to comply with H.R. 2454. This makes the bill very different from the Clean Air Act, which distributed sulfur dioxide emission allowances only to utilities that actually had sulfur dioxide emissions to reduce.

Under the current formula, utilities in my area will only receive 65 percent of compliance costs at most, and less than 50 percent in some areas--the shortfall will cost hundreds of millions of dollars. When you compare this to other regions of the country they will receive 100 percent of the needed allocations. Because of this inequity consumers in the Midwest will have to make up the difference; their rates will go up far more than consumers in other areas. This is neither fair nor equitable, because it creates winners and losers.

The retail sales component of the formula benefits companies like FPL and Exelon with heavy nuclear or hydro assets, because they will receive emission allowances for assets that don't emit.

They don't need these windfall allowances to comply with the bill's cap, so they can sell them in a carbon trading market for a profit.

If you don't believe that, just read a June 10th Bernstein Research analysis, in which Exelon's CEO, John Rowe, predicted that H.R. 2454 ``will add $700 to $750 million to Exelon's annual revenues.''

In these tough economic times when Iowa's unemployment rate is at its highest in over 20 years, when Iowan's are struggling to repay student loans, pay rent, and put food on the table, why are we asking those of us in the heartland to shoulder more of the burden than others?

I would also like to take a moment to talk about another amendment I tried to offer. My amendment would have provided a government backed loan guarantee for the construction of a renewable fuel pipeline.

Transporting fuels by rail and truck has higher energy input requirements and much higher greenhouse gas emissions. CO

2 emissions are reduced by 30 percent when comparing liquid fuel transported by pipelines vs. railcars and 87 percent when comparing pipelines to trucks.

Even though my amendment to bring equity to the formula was not ruled in order I am not giving up. I plan to work with my colleagues in the other body to bring this serious issue to light and to work towards a solution that works for Iowa families. It is my hope that when the House addresses this legislation again the allocation formula will be more equitable for Iowan's and Midwesterners alike.

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