Arizona Capitol Times » Blog Archive » Kirkpatrick raises concerns about renewable energy’s cost to rural Arizona residents
Duncan Mayor M.C. Holiday has nothing against renewable energy. But as the state and federal governments look toward reducing greenhouse gas emissions, he hopes officials will keep in mind that his remote town has a high unemployment rate and many residents on fixed incomes.
If government requirements boost electric bills significantly, he said, it would be tough for Duncans 800 residents.
We as a town we have a hard time paying our utility bills now, Holiday said. I dont know what ...
wed do. Wed have go back to burning wood.
Concerns about the costs to rural Arizona contributed to U.S. Rep. Ann Kirkpatricks vote against legislation dubbed the American Clean Energy and Security Act, which would require large utilities to obtain 6 percent of their power from renewable sources by 2012 and 20 percent by 2020, though companies can make up some of that total in energy efficiency. The bill also would establish a cap-and-trade program through which companies could buy and sell permits to emit greenhouse gases.
Kirkpatrick, a Democrat, said the standards in the bill would have a disproportionately large impact on rural residents because they are served by smaller utilities that rely more on coal-fired plants and have smaller customer bases across which to spread costs. She also said is worried about job losses in her district, where four coal power plants employ around 12,000.
I think we have to address climate change but also be very sensitive right now to the economic recession, Kirkpatrick said in a telephone interview.
The bill passed the House in June and is under consideration by the Senate.
The legislations renewable-energy requirements would apply to utilities that sell at least 4 million megawatt hours of electricity annually, which excludes most electric cooperatives such as those serving Duncan and rural communities. However, all utilities would participate in the cap-and-trade program, and its this provision has rural officials worried, said Tom Jones, CEO of the Grand Canyon State Electric Cooperative Association Inc., which represents six electric cooperatives in Arizona.
The concern is that Wall Street would get involved and people would buy up emission credits and hold them until the price goes up and then those of us having to buy them would be competing in that marketplace, Jones said.
Larger utilities, while its still costly, are able to blend those costs into other resources, and the impact is not as great as it would be for a smaller utility like an electric cooperative, he added.
Companies regulated by the Arizona Corporation Commission already are bound by that bodys requirement that utilities obtain 15 percent of their energy from renewable sources by 2025. But small cooperatives wont be penalized under the rule if they show good-faith efforts to comply.
Kristin Mayes, chairwoman of the Arizona Corporation Commission, said that she is optimistic about rural cooperatives meeting the renewable energy requirement.
I think we are fast approaching a time when its going to be more expensive to produce electricity from coal than from the sun or wind, and that day will come when Congress passes a cap-and-trade or carbon tax, Mayes said. So the more we invest in renewable energy now the more we protect the consumer.
Rep. Chad Campbell, D-Phoenix, who was recently selected to work with the White House in advancing federal clean energy legislation in Congress, said the cost to rural areas is a major priority for lawmakers at the federal and state levels.
Finding a way to offset those costs for consumers _ that is a critical piece of legislation for us as we move forward, Campbell said. Any time there is the implementation of new technology and additional costs there will be a burden passed onto the consumer, and weve done plenty of things to offset those costs.
Campbell said that income and property tax breaks and incentives helped lower the cost of renewable energy for consumers and that any revenue generated from a cap-and-trade program would have to be used to offset the cost of renewable energy for rural and low-income communities. However, he said the country needs to move forward on clean energy to rebuild its economy around that market to compete with leaders such as China and Germany.
If we dont get in front of this we will fall behind in the long run and that will be a much greater economic hit to the county then we are facing now, he said.
Tim James, professor of economics at Arizona State Universitys W.P. Carey School of Business, said converting to renewable sources will increase the cost of electricity everywhere but added that there is little choice.
at the opening session
of the 95th Arizona Town Hall
at the El Tovar Lodge
at Grand Canyon National Park.
The theme of the event
is "Riding the Fiscal Roller Coaster:
Government Revenue in Arizona."
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