Compromise protects jobs, utility ratepayers

Following a month of continuous, collegial and ultimately successful negotiations with House Energy and Commerce Committee Chairman Henry Waxman and Energy Subcommittee Chairman Edward Markey, an agreement has now been reached on the principles for greenhouse gas control legislation which protects jobs in coal-producing regions and protects the consumers of fossil-fueled electricity from significant electricity rate increases. Our agreement is at the core of the legislation now being processed through the Energy and Commerce Committee.

It is now inevitable that federal controls on greenhouse gases will be adopted. The Supreme Court ended the debate on whether there would be controls when it effectively mandated three years ago that the Environmental Protection Agency regulate greenhouse gas emissions unless the Congress regulates first. Virtually all interested parties, from the coal industry and electric utilities to the environmental community, would prefer that Congress adopt the regulations rather than have them be adopted by the EPA.

{mosads}Accordingly, I have been working with Chairmen Waxman (D-Calif.) and Markey (D-Mass.) to advance the goals that I think are important to achieve in control legislation. These goals are preserving coal-related jobs, facilitating growing coal production and keeping electricity rates affordable in regions where most of the electricity is coal-fired. The compromise we have now achieved is a major step toward meeting these goals.

Our agreement will provide to electric utilities 90 percent of the emission allowances they will need without charge. The provision of free allowances will help to keep electricity rates affordable. Our agreement provides 2 billion tons annually of offsets that will enable electric utilities to invest in agriculture and forestry, including tropical rain forest preservation, as a means of meeting their emission reduction requirements under the law. Therefore, by using offsets, electric utilities can continue using coal while at the same time reducing greenhouse gas emissions.

Under our agreement, separate legislation I have introduced to accelerate the flow of federal funding for the latest generation of carbon capture and storage technologies will be enacted into law. Under that measure, $1 billion annually will be devoted to the development of these technologies for a 10-year period, and estimates are that with this funding they will be available and reliable in 2020. This technology development is essential to achieving our long-term goals for greenhouse gas controls while at the same time preserving coal jobs, allowing increased coal production and keeping electricity rates affordable.

Throughout the course of the negotiations, I have been in continuous discussions with a number of stakeholders including the coal industry, electric utilities and the United Mine Workers of America, and while each of these groups believes that further improvement in the bill will be necessary in future stages of the legislative process, the measure now reflects the principles that are of paramount interest to them.

Following committee approval of the bill, it is my intention to seek further changes in several key areas. One improvement will be a change in the level of greenhouse gas reductions that will be required by 2020. Chairman Waxman’s initial proposal was a 20 percent reduction based on 2005 levels by 2020. Our agreement for purposes of committee consideration sets the level at 17 percent. I continue to believe that a 14 percent reduction would further our goals of preserving coal jobs, increasing coal sales and keeping electricity affordable.

In addition, I remain concerned about the short length of the phase-out of the electricity sector allowances after 2025, with a full transition to auction over a mere five years. Also of concern is a discount on the purchase of international offsets that emerges after five years, and other matters.

Despite these reservations, and my intention to seek additional modifications, I believe that the time to pass a cap-and-trade program of greenhouse gas controls has arrived. The bill before the committee is a well-balanced foundation for those controls.

Boucher is a member of the House Energy and Commerce Committee and chairman of the Communications, Technology and the Internet Subcommittee.