Cost is a key issue for caps on carbon
By RUSSELL RAY/rray@tampatrib.com
Reducing emissions of carbon dioxide, the greenhouse gas scientists have linked to global warming, will surely increase your monthly electric bill, experts say.
The increase most likely will come as the state and country move toward a cap-and-trade system that would limit carbon dioxide emissions and create a market to buy and sell emission permits. While many ideas are being considered, the cap-and-trade system is seen by many as the most effective way to curb carbon.
Florida is developing the rules for a statewide cap-and-trade system, which could be launched next year. And Congress is debating the rules for a national program as the Obama administration urges lawmakers to pass a cap-and-trade bill.
The question is, how much more would a cap-and-trade system cost utilities and their customers?
Industry leaders say it’s important that lawmakers devise a system that curbs carbon at a minimal cost to consumers, especially in these tough economic times.
"Cost is the main issue for most people," said Byron Burrows, air programs manager for Tampa Electric Co. "Our main motivation is looking out for the customer’s best interest, making sure they’re not unduly impacted."
A cap-and-trade system would place a limit on carbon emissions and establish a commodities market for carbon, in which power providers can buy and sell emission permits.
If a utility can’t meet the cap, it could buy more time by purchasing additional permits from companies below the cap. The cap would gradually be lowered, which would raise the cost of emitting carbon and create incentives for using renewable power and other forms of cleaner-burning technology.
"If we reduce below the cap, then we’d be able to sell those allowances or bank them for future use," Burrows said. "It may be in our best interest to save them for the future."
The emission permits could be auctioned off by the government, and the proceeds used to promote the use of renewable energy or distributed to taxpayers to offset higher energy costs that likely would result under strict emission limits.
But utilities say that if they have to pay for the permits, the cost will be passed on to customers.
Utilities already know they likely will have to make expensive upgrades to their power plants to comply with the cap. Requiring them to buy the permits as well could drive up the cost of electricity to unreasonable levels, Burrows said.
"We would have to come up with the technology to reduce our carbon dioxide emissions, and we’d have to buy allowances under the cap," he said.
Also, utilities should be granted permits for work they have already done to lower carbon emissions, Burrows said.
For example, TECO converted its Bayside power plant from coal to natural gas, a project that cut the utility’s carbon emissions by 25 percent, according to Burrows.
"That’s important to us – to make sure our customers, who paid for reductions awhile ago, get credit for making those reductions," he said.
David Zurlinden, a retired electrician who lives in Ruskin, said a cap-and-trade system would likely lead to a substantial increase in electric bills because renewable power is in short supply in Florida and more expensive than power made from coal and gas.
"We don’t have enough green energy here," he said. "How are you going to run the state of Florida on wind and solar?"
The Florida Department of Environmental Protection is developing the rules for a statewide cap-and-trade program. Those rules, however, must be ratified by state lawmakers. The Legislature will consider DEP’s plan during next year’s regular session.