Whitfield Calls Foul On Energy Bill

Press Release

Continuing his efforts to ensure Kentuckians are not burdened with sky-high electricity costs in the midst of an economic recession, U.S. Representative Ed Whitfield (KY-01) challenged supporters of climate change legislation currently being debated in Congress to explain why the bill would unfairly hit consumers in certain parts of the country, such as Kentucky, harder than those in other areas.

The House Energy and Commerce Subcommittee on Energy and the Environment, on which Whitfield serves, held a hearing today entitled "Allowance Allocation Policies in Climate Legislation: Assisting Consumers, Investing in A Clean Energy Future, and Adapting to Climate Change." The hearing examined carbon emission allocation policies under the American Clean Energy and Security Act of 2009, sweeping climate change legislation which could have a detrimental impact on the U.S. economy and coal industry in Kentucky.

During the hearing, Whitfield cited a study from the Energy Information Administration (EIA) on individual states' average CO2 emissions from electricity generation. While Kentucky's average CO2 emissions is currently 3.75 percent of the U.S. total, under the American Clean Energy and Security Act of 2009 Kentucky will only receive 3.11 percent of the nation's allowances. By comparing the data prepared by EIA to the number of allocations, this means that Kentucky will be missing allocations for 36,791,472 metric tons of CO2. At an estimated cost of $15 per metric ton for emissions, which is a very conservative estimate, this policy alone will cost Kentucky consumers a minimum of $551 million. This cost does not include the cost to upgrade technologies or potential job loss, so the cost of the bill could be considerably higher for Kentucky.

However, under this policy, a number of other states including Washington and California will actually receive higher allowance percentages than they currently use. Whitfield pointed out that this discrepancy will unfairly hurt consumers in Kentucky who will be forced to pay much higher electricity costs while rates in other states decrease by comparison.

"In my home state of Kentucky, I just don't see how we are going to be able to survive with the higher rates that are being suggested under this bill and allocation structure," Whitfield said. "It seems to me that this bill forgets the consumers who are ultimately going to be paying the price in both higher electricity costs and higher taxes."

On Friday the Congressional Budget Office (CBO) released a report on the costs of the American Clean Energy and Security Act of 2009. The report states that the legislation would impose $846 billion in new energy fees and be more costly over a ten year period than the financial bailout or stimulus package passed by Congress.

For the past several weeks, the Energy and Commerce Committee has been debating this legislation. The bill would establish a cap-and-trade program, new energy efficiency programs and a nationwide renewable electricity standard among other measures aimed at limiting carbon emissions. Despite strong opposition from many Members of Congress, including Whitfield, who cited concerns over the cost of the bill to taxpayers and its effectiveness, the legislation was passed out of the Energy and Commerce Committee on May 20 by a vote of 33-25. It now awaits further consideration by eight other Committees and possibly the full House of Representatives.

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