ABINGDON, Va. – Speaking to a full auditorium in a town hall-style meeting at Virginia Highlands Community College on Thursday, Virginia Attorney General Ken Cuccinelli said cap and trade, if passed by Congress, would send power rates through the roof.
“Cap and trade is going to drastically affect electric rates and the economy here in Southwest Virginia,” said Cuccinelli, whose role as attorney general includes representing customers when power companies seek to increase rates.
The federal legislation, designed to regulate carbon dioxide emissions to fight global warming, would restrict the total emissions allowed and let polluters trade among themselves for emission allowances.
Cuccinelli said that under the proposed regulatory scheme, electric rates would increase over the next 10 years by twice what they did from Appalachian Power’s much-criticized interim rate hike last winter. And that would be just the beginning.
“By 2035, if you would start with today’s rates, you would literally look at a doubling of electric rates just because of that one regulation,” Cuccinelli said. “That doesn’t account for what happens for fuel rates at all.”
Cuccinelli said it would be worse for APCo customers because parent company American Electric Power “is the largest power producer with coal in this country, and all of this regulation is effectively targeting coal.”
For example, he said, the less electricity that Appalachian Power sells to other utilities, the more ratepayers must pay to cover fuel costs as part of their electric rates.
Next, he said, cap and trade would reduce coal demand by an estimated 75 percent by 2030, and would eliminate the associated jobs.“That’s a big problem for us in Virginia,” he said. “And those same higher costs are, of course, going to result in closing factories and jobs being lost.”
Closing factories would drive rates even higher, he said, as remaining customers are forced to pick up more of the overhead costs of power infrastructure, such as generation and transmission, which are needed regardless of how many, or how few, customers the power company has.
Regarding current rate issues, Cuccinelli said the spikes last winter, which caused some customers to see bills double or triple in a month, were an unfortunate coincidence of cold weather and an interim rate increase.
The interim increase took effect Dec. 12, just days before a major winter storm buried the region. Cuccinelli said that, because of legislation passed this year, such base rate interim increases are no longer allowed.
Also, Cuccinelli said, in a more recent rate case, due in part to his efforts arguing for consumers, Appalachian Power got a much smaller increase than it wanted from the State Corporation Commission.
This summer, with fuel costs going down and a federal environmental surcharge expiring, rates are actually going down slightly, meaning a few dollars saved on the average customer’s monthly bill.
But if cap and trade is imposed, Cuccinelli said, the low rates won’t last long here, where more than 80 percent of the power comes from coal.
dmccown@bristolnews.com | (276) 791-0701
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