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'Cap-and-trade' bill could be costly for Kansas cities

Staff writer

A proposed “cap-and-trade” bill at the federal level could cost local consumers hundreds of dollars per year, Kansas Municipal Utilities Executive Director Colin Hansen said Friday.

Hillsboro and Marion representatives participated in an online seminar with Hansen, along with representatives from several other cities.

A bill being considered by the Senate would cap the total amount of carbon dioxide electric utilities can emit. Utilities would be able to trade emission allowances, Hansen said.

The cap would decrease over time, forcing utilities to switch to power sources that produce less carbon dioxide. The cap would be reduced to 17 percent of 2005 emissions by 2050, as the bill currently reads.

Of commonly used power generation techniques, coal produces the most carbon dioxide. Coal is used to produce 73 percent of Kansas electricity, so utility companies in Kansas would have to purchase more of emission permits than produces elsewhere, resulting in higher prices for consumers.

The House of Representatives passed a cap-and-trade bill June 26. Kansas First District Representative Jerry Moran opposed the bill, saying it would be devastating for rural America.

A cap-and-trade policy could create a wealth transfer to the coasts, where more nuclear and renewable power sources are used, Hansen said. He said the policy could have a “huge price tag” for Kansas.

How much it costs would depend on how much money emission permits sell for.

He used Augusta as an example. If emission permits sold for $25 per ton of carbon dioxide, Augusta electricity customers would have an average increase of $115 per year for 2012. The cost would go up in subsequent years, unless power providers invest in sources like wind, solar, and nuclear power.

Cap-and-trade policy also could dramatically increase natural gas prices, because natural gas doesn’t produce as much carbon dioxide as coal.

Hillsboro City Council members Shelby Dirks, Kevin Suderman, and Bob Watson; Mayor Delores Dalke; and City Administrator Larry Paine participated in the seminar.

Marion Mayor Mary Olson, City Administrator David Mayfield, City Clerk Angela Lange, and Economic Development Director Doug Kjellin also participated.

Hansen provided lobbying material from American Public Power Association, urging legislators to revise cap-and-trade proposals to reduce the cost to consumers.

Last modified Oct. 15, 2009

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