Last modified: Thursday, July 2, 2009 12:17 PM CDT

Energy bill has sticker shock

By ROBYN L. MINOR, The Daily News, rminor@bgdailynews.com/783-3249

If climate control legislation that passed the House last week makes it through the Senate, all U.S. residents will see higher electric bills.

Just how much an increase will depend on where in the country you live. Kentuckians, who have enjoyed relatively cheap electricity, would see the biggest jumps, chiefly because the state relies on coal-fired power plants.

The projected increase ranges from $100 to more than $3,000 a year that could be paid in part with a government subsidy, according to U.S. Rep. Brett Guthrie, R-Bowling Green.

“We were at TVA’s Paradise plant recently and asked that same question about how much our customers would be impacted,” said Bowling Green Municipal Utilities Manager Mark Iverson. “They don’t know just yet. (Guthrie’s) range is the same numbers I’ve seen. It would be nice to be able to pass that information on to customers.”

Iverson said he seriously doubts that the increase would be as little as $100.

Both Guthrie and U.S. Rep. Ed Whitfield, R-Hopkinsville, voted against the legislation.

Whitfield said the bill could cost Kentuckians an additional $543 million to pay for improvements to power plants because it seems that Kentucky would not get enough permits to cover its current carbon dioxide emissions. Power plants also could purchase or trade for other emission permits.

“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 in a news release. “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.”

But the Washington, D.C.-based Environmental Defense Fund praised the legislation’s passage, saying it will reorient the country to make low-carbon power the goal.

But Guthrie said the legislation does little to create incentives for alternative energies. Instead it attempts to make them more attractive, by making traditional fuels more costly.

Iverson said Tennessee Valley Authority already has a goal to have 50 percent of its power by 2020 coming from what it considers to be green or renewable sources, such as hydro-electric power or nuclear.

“But the legislation is being influenced by groups that oppose certain types of generation for a variety of reasons - things that are non-carbon producing,” Iverson said.

It does not see hydro power or nuclear power as renewable, he said.

“If you are trying to accomplish the reduction of carbon, I can’t see that you are going to make inroads into replacing coal power plants without considering nuclear,” Iverson said. “There is a rather significant load to be replaced.”

TVA also is trying to purchase small blocks of wind, solar and geothermal generated energy in its five-state service area.

While those industries aren’t incentivized by this legislation, there are federal stimulus dollars available for projects that are ready to build.

Customers of BGMU and Warren Rural Electric Cooperative Corp. already have the choice to make the switch to green power, paying extra for so many blocks of green-generated power. But very few customers have done so.

There are 18 WRECC members participating in the Green Power Switch program. Those 18 are purchasing a combined total of 33 blocks of green power. A block represents 150 kilowatt hours produced by wind, solar and/or methane, according to spokesman Rick Carroll.

Iverson said 92 of BGMU’s 27,000 customers have signed up for the program.

T. Boone Pickens, a Texas oilman who came out a year ago with a plan to reduce America’s dependence on foreign oil, now is touting propane as the answer.

“Propane is clean, it’s American-made, and it can be put to work right now,” Pickens said at a propane industry event last month.

Propane becomes more readily available as natural gas production increases, which could be good news for this area.

Kentucky Blue Gas this week fully launched its modern natural gas production facility in Warren County.

The natural gas, once things such as hydrogen sulfide, nitrogen and propane are removed, will be sold to a local natural gas utility for consumption in Bowling Green, according to Jason Lindaman, a spokesman for the company.

Lindaman said compounds that are removed, including propane, are sold to a third party for distillation and distribution.

The company is leasing wells in Warren, Butler and Ohio counties and is looking for more. It also will add a second shift at its production facility to accommodate growth.

Already used on many farms for such things as dryers for grain silos, propane can be used to power mowers, trimmers and other lawn and landscaping equipment, generators, farm irrigation equipment and light trucks.

Without massive switches to alternative power, what the legislation will likely cause is a change in behavior, Iverson said.

“It may be a combination of things that utilities end up doing by pushing their energy efficiency programs; really encouraging energy audits to do such things as replace light bulbs and add insulation,” he said. “But that goes only so far in the reduction of consumption. The goal would be to delay the need to put on line more carbon producing plants.”

Utility companies in heavy electric usage states such as California and Florida already have time of use rates, where customers are sent signals to know the highest usage times when they are paying more for power, perhaps encouraging them to turn something off. It encourages them to wash dishes or do laundry or other electric-using household chores when rates are cheaper.

“I think we are moving toward seeing that rolled out (in TVA’s) area,” he said.

Guthrie said the legislation also will impact the cost of gasoline, by some estimates as much as $1.70 a gallon, putting the price of gas close to the $4 a gallon.

“In my opinion $4 a gallon gas is really what wrecked the economy,” he said.

The biofuels industry, however, is pleased that the legislation would make their products more attractive by not penalizing the fuel as gasoline is.

“It’s such complicated legislation that there is no way to estimate all of the unintended consequences,” Guthrie said.

One aspect of the legislation could make it more difficult to sell homes that don’t meet new energy standards.

“It instructs the secretary to enact residential building codes that will achieve 30 percent and 50 percent higher energy efficiency by 2010 and 2014, respectively (2010 and 2015 for commercial buildings),” according to Nate Hodson, a spokesman for Guthrie. “States will receive federal funding to help comply with these goals, but if a state cannot comply, it will not receive emission allowances and federal funding will be reduced. This creates new authority for the federal government to regulate building codes by holding developers and homeowners liable for not reaching federal energy efficient mandates, even if the buildings are in compliance with applicable local building codes.”

As for what the bill’s chances are in the Senate, Guthrie said: “I’ve learned to never predict what will happen in the Senate.”

U.S. Sen. Mitch McConnell, R-Ky., could not be reached for comment, but recently said the legislation would make electric bills spike.

“If we do have a global warming problem, and many people believe we do, we need to target it on a global basis. The way to get at it is to build more nuclear power plants, which don’t have a CO2 emission problem and to develop the kind of technology to burn coal cleanly,” McConnell said Sunday on Fox news.

When asked if there was a workable bill that could pass the Senate, McConnell responded: “I don’t think putting clamps on our economy when you know the Chinese and the Indians are not going to do it is a good idea. Why not develop technology to burn coal cleanly and build new nuclear power plants?

“The French, for example, produce 85 percent of their power from nuclear plants. They don’t have a CO2 emission problem.”