6.1. ERMUSR 03-09-2010 - Laserfiche WebLink

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Background Minnesota's public power systems recognize that Congress is placing a high priority on global climate change as one of the most significant envi- ronmental policy issues confronting the nation, and we support Congress' efforts to pursue federal legislation in this area. We do not believe that a patchwork ofsingle-state or even multi-state fossil fuel registration and cap-and-trade programs is an eco- nomic or effective approach to the climate change problem. Unilateral action by one state or even actions by a small group of states is inconsistent with the structure of large regional wholesale electric markets, would have little impact on the climate, and would place Minnesota businesses and jobs at a competitive disadvantage. The climate change problem encom- passes aseries of issues that transcend state boundaries. We need to develop comprehensive national solutions that ensure a reliable and cost-effective supply of energy. Congressional Action Throughout the 110th Congress, the House Energy and Commerce Committee held numerous hearings to educate Members on the issue of global warming. The committee, under Chairman John Dingell (D-MI), released a series of"White Papers" focusing on various issues relating to climate change. Finally, several mem- bers of the panel, including Dingell and Representative Rick Boucher (D-VA), developed various climate proposals, but a bill never reached the House floor. In the Senate, the Environment and Public Works Committee, chaired by Senator Barbara Boxer (D-CA), in late 2007 passed the "America's Climate Security Act," introduced by Senators Joe Lieberman (I-CT) and John Warner (R-VA). The bill would have created a greenhouse gas (GHG) emissions cap-and-trade program with the goal of reducing GHG emissions to 10 percent below current levels by 2020 and to 80 percent below current levels by 2050. To achieve this goal, the bill required owners and opera- tors of coal-fired power plants, natural gas processing plants, and petroleum refineries, among others, on an annual basis to provide the Environmental Protection Agency with enough emis- sion allowances to account for all of their GHG emissions. Some of these allowances would be allocated for free and some would be auctioned, with the auctioned portion increasing over time. But serious concerns over the bill's costs and impact on the economy caused it to be withdrawn before a vote could be taken by the full Senate. With a new White House, larger majorities in both chambers, and sig- nificant differences in the committees of jurisdiction, climate change legisla- tion will continue to be a top priority for the 111th Congress. To date, many bills have been proposed or introduced in the House and Senate that would impose a mandatory regime to re- duce GHG emissions, including two carbon tax proposals and a multitude ofcap-and-trade proposals with vari- ous targets and timetables for GHG reductions. MMUA Position MMUA believes that Congress should, in addressing the climate change problem: • include, to the extent possible, all human causes of greenhouse gas emissions, not dust electrify generation; make the minimization of economic disruption a high priority; and • hold other nations accountable for their contributions to atmospheric greenhouse gas levels so the U.S. is not economically disadvantaged. If Congress and the President deter- mine that acap-and-trade system is the best way to reduce greenhouse gas emissions, MMUA believes such a system should: • be economy-wide; limit compliance cost volatility by avoiding the temptation to auction off allowances to non-emitters and prevent windfall profiteering by establishing an allowance price limit and other necessary failsafe measures; Climate Change