Missourians could see energy bills increase by more than $200 annualy under cap-and-trade

JEFFERSON CITY - Federal cap-and-trade legislation would cause Missourians' energy rates to increase by more than $200 annually if the state doesn't take steps to improve current energy procedures, according to a study commissioned by AmerenUE.

The Joint Committee on Missouri's Energy Future heard testimony Wednesday in Columbia on dangers of increased rates and ways to offset potential costs from the Waxman-Markey bill, also known as cap-and-trade. While a number of alternatives were discussed, all testimony touched on Missouri's main source of energy: coal.

"We're married to coal whether we like it or not," Public Services commissioner Jeff Davis said. Cap-and-trade would "double rates" within five to six years, Davis said, adding the legislation would provide "the largest wealth transfer in the history of mankind."

The "rate impact will be immediate and significant," said Shawn Schukar, vice president of energy delivery technical services for Ameren. While Schukar testified that "no silver bullet" exists to blunt the cost increase, it is important to have a technological infrastructure -- such as ensuring the grid is structured well -- in place to deal with the new regulations.

Ameren Vice President of Regulatory Affairs Steve Kidwell said the "current legal and regulatory framework" of the state provides a hurdle to infrastructure investments. A partnership is necessary in order for utilities to begin investing in new technologies, Kidwell said.

Under cap-and-trade, energy companies would be required to pay the government for permits to emit carbon dioxide -- a bi-product of burning coal -- according to a presentation by Schukar.

Gary Pendergrass, director of the Missouri Carbon Sequestration Project in Springfield, said that his project was developing ways of capturing carbon emissions from coal and storing them underground, an alternative to releasing them into the air.

Missouri has similar geology to other Midwestern areas already storing carbon emissions, Pendergrass said.

Sen. Kurt Schaefer, R-Columbia, described the project as "one of the most important projects going on in the state of Missouri right now." The ability to store emissions from burning coal "substantially changes the dynamic" when it comes to cap-and-trade legislation, Schaefer said.

Another alternative proposed to the committee was for Missouri to rely more heavily on energy derived from burning landfill waste.

"It just takes trash and we all have that," said Tom Dunne, president of waste management services for Fred Weber, Inc., a landfill in Maryland Heights.

Columbia Water and Light recently made a deal with the state and Ameresco in which it will receive electricity generated from energy released by a Jefferson City landfill.

Schaefer noted that landfill gas is considered renewable under proposition C, a ballot initiative passed last November that requires utility companies to eventually use 15 percent renewable energy.

Proposed cap-and-trade legislation would affect all energy consumers in Missouri, not only those serviced by Ameren.

"We're all in the same boat," said Public Utility Alliance General Manager Duncan Kincheloe when asked by Schaefer how cap-and-trade would influence Columbia residents.

The committee plans to present their findings to the next session of the Missouri legislature which begins in January.