Waxman-Markey Has Passed Through Congress. NOW WHAT?

On Friday, June 26th the congress passed HR 2454, also known as "Waxman-Markey" by a very narrow margin of 219-212. This bill is one that will impact every electric consumer in America, affecting the cost of electricity in your home, for your farm operations, and for our local businesses and industries.

After all the effort in recent months to communicate with our Congressman and Senators about our need for affordable electricity, both here in SPD country and across the United States, you may find yourself wondering:

1. Were our efforts to communicate worth the effort? And:
2. Now what?

First of all, the answer to question #1 is YES! The efforts put forth by SPD customers and rural electric consumers through the Our Energy, Our Future campaign were heard loud and clear by our Nebraska representatives! Our Congressman Adrian Smith and Senators Mike Johanns and Ben Nelson have all shown signs of concern for the effects that Waxman-Markey will have for electric consumers.

Now, to address your question of "Now what?" It is imoprtant to remember that the vote by Congress was ONLY ONE STEP in the process. And now, there is more work to be done. The bill will now be considered by the US Senate. Through the Our Energy, Our Future campaign, you can remind Senators Johanns and Nelson that this bill is still a concern, and that affordable electricity is a must.

Now that the Senate is stepping up to the plate to debate and consider this bill, this is a critical time to voice your concern for energy legislation that will not compromise affordable electricity for all consumers. Keep the dialogue going! Our continued message needs to remind our Senators of the need for electricity that is both affordable and reliable.

You can easily engage in this conversation by logging on to www.southernpd.com/oeof. If you have already sent a message, feel free to send additional messages as the debate and discussions in the Senate approach.

Caution Urged After Storm

Hall and Hamilton Counties, both in Southern's service territory, encountered a full night tonight of severe weather with tornadoes touching down from Cairo all the way to the Aurora area. Often after severe weather, we all feel tempted to get out and take a look at the damages. In the aftermath of this storm, we would like to remind you of the significant dangers of downed power lines. If you encounter a downed power line, please assume that the line is energized, don't take a chance. Contact Southern Power District to report the downed line. Also, debris from the tornadoes and poles may be in roadways. We are working through the night tonight to clean up these areas. If you must travel, we urge you to use extreme caution. We do not want to see any injuries or fatalities. Please share this message with your friends and families.

To those affected by this storm, please know that we will work hard to restore power to you as quickly as possible. We wish all the best to those who will need to rebuild their homes, businesses or endured other losses. And we thank the kind people who lend a helping hand to their neighbors during a time of need. We often see that neighborly spirit after storms like this, and it is one of the reasons we are proud to be working for customers here in Central Nebraska!

So...How Much Will This REALLY Cost Me?

If you’ve been keeping up with the latest news and developments with the American Energy and Security Act (aka Waxman-Markey Bill), you are probably intrigued by all of the speculation as to what the end costs will be to electric consumers. Chances are you have seen numbers ranging from about $100 per year, or all the way up to $3,000+ per year for the average household.

For many of our customers, particularly those on a fixed income, even a $100 annual increase is a big issue. But what about the predictions that call for increases above $3,000 per year? Such a wide range of predictions makes it difficult to get a grasp on exactly how Waxman-Markey will affect your budget.

So…why there is such a wide gap in the range of predicted increases? It all comes down to several factors that will play a part in “how big” those increases will be. We have outlined several important factors for you to think about:

1. Where will the carbon dioxide level be established?
   Currently, the level of CO2 reduction sought by Waxman-Markey calls for a drop in carbon emissions by 17 percent by 2020, and over 80 percent by 2050 compared to levels from 2005. (SOURCE) NRECA CEO Glenn English recently acknowledged that the emission caps have been improved slightly. But he says, “While the emission caps in the bill have been lowered somewhat, we believe they are still overly aggressive in the early years of the program and will need to be adjusted”.



2. Under cap & trade, how high will carbon credits go under the management of Wall Street?
   The purpose of a cap and trade system, as explained by President Barack Obama, is to cause the price of fossil fuels (such as coal) to skyrocket, and force consumers away from this more affordable source of generation. This would be achieved by requiring power plants that emit carbon above the “cap” level to purchase carbon credits on the market. Putting carbon credits up for auction puts electric consumers at the mercy of Wall Street. The cost passed on to the consumer will depend upon the level of competition to acquire these credits.



3. Will a carbon tax be imposed for carbon emissions?
   An initial carbon tax has been proposed that would be collected by the Federal Government for all carbon emissions up to any cap adopted. The amount of that tax is purely speculative and the range of speculation is large. The Federal Budget was initially designed anticipating this tax revenue, and without it, proposed programs could be unfunded. There has been opposition to this tax as it is not connected to carbon reduction but rather budget financing. It is a cost factor that contributes to the speculation of just how much rates might increase with passage of global warming legislation.



4. What will be the cost to replace existing generation?
   In Nebraska we are fortunate to have had the service of nuclear power in our generation mix, as well as the addition of supplemental power provided by wind. But with 68 percent of our state’s generation coming from coal, there will undoubtedly be large investments required to replace that generation with lower emitting or emission-free sources.



5. How fast will we try to achieve goals?
   As mentioned previously, the first goal for CO2 reduction comes in 2020, just over one decade from today. During those years Waxman-Markey, as it currently reads, requires an increase in a combination of renewable energy and electricity savings. This increase begins at 6 percent renewable generation in 2012, and the requirement will gradually rise to 20-percent by 2020 ( SOURCE: see "Clean Energy Provisions"). By the way, nuclear power, which is a non-carbon-emitting source of power, is not considered to be renewable generation (such as wind, solar or biomass). Although NPPD currently produces 34% of its electricity from non-carbon emitting sources—much of that being nuclear--only one percent of its mix specifically comes from wind power. Increasing wind generation to six percent by 2012 will be a tremendous investment which, of course, is passed down to the consumer. Let’s not forget that some of the proposed solutions contained within the legislation—such as carbon capture and sequestration--have not even been developed for coal power plants. So, the goals set for the timeframe of CO2 reduction need to take the large investments into consideration, and the lack of technology currently available to capture CO2.
   
   When you consider all these factors, it’s easy to see that the formula which determines your future increases is difficult to nail down. Much of what you have seen in the news and heard from legislators is based upon a combination of both fact and opinion. We feel the potential for significant increases in electric cost is very strong, and will depend upon the compromises reached as this bill continues its journey through Congress and later our Senate.
   
   With Waxman-Markey navigating its way through various committees in Congress, this is a time for us all to work together, and issue a challenge to our Senators and Congressman to carefully weigh the implications of the above mentioned factors on the affordability of electricity. There are those who believe that we SHOULD pay dearly to bring about significant reductions in carbon emissions, and they are certainly doing their part to be heard. If you would like to see these issues addressed in the most affordable manner possible, then you too need to be heard.
   
   Let’s keep the conversation going, join us in the Our Energy, Our Future campaign and let’s keep these concerns at the front of the minds of our elected officials. Look for a form in your most recent SPD Customer Newsletters to voice your concerns, visit Southern's OEOF website.
   

Editorial Submitted by Anthony Bohaty

The American Clean Energy and Security Act is a bill which seeks to implement a hefty tax on carbon emissions by way of a cap-and-trade program. This tax ultimately falls into the lap of electric consumers in the form of significant rate increases. This bill is moving swiftly through various committees in our nation’s Congress. The next goal established by leaders of the House is to push the 900-plus page bill through the House Ways and Means Committee by June 19th.

As the Irrigation Services Manager for Southern Power District, I am well aware of the rising production costs and how they affect our local farmers. Now, farmers who depend on the affordability of electricity to pump water through their irrigation systems face the possibility of electric rates that could triple. Many of our local farmers have dozens of irrigation services and such a significant increase would put many of them out of business. In addition, most of our farmers reside near their farming operations, and providing to them the electrical services that they need in their homes will be costly if a cap-and-trade, or “cap and tax” proposal becomes a reality.

With the urgency to pass this bill that we are seeing from the leaders of our Congress, those of us who are concerned about those skyrocketing rates also need to act with urgency. If you are concerned about keeping your electric rates affordable, then the time to speak with your Congressman and Senators in Washington is NOW! Please visit www.southernpd.com/oeof today and take just a few minutes to share your concerns with Congressman Adrian Smith, and Senators Ben Nelson and Mike Johanns. If you do not have email access, look for the comment form that can be found in your SPD Irrigation or Customer Newsletters.

Sincerely,


Anthony Bohaty,
Southern Power District Irrigation Services Manager

Our Energy Update

On Thursday, May 21st, the House Energy and Commerce Committee approved climate change legislation that they plan to bring to the House floor in late June. This legislation--the American Clean Energy & Security Act of 2009--seeks to impose a tax upon all electric consumers in the form of a cap-and-trade system.

Cap-and-trade has been the subject of much debate recently. Although it is a complex system to comprehend, the concept behind such a system is becoming more widely understood by electric consumers. At Southern, we are learning from our interaction with customers that concern for the impact of climate change legislation on affordable electricity is growing. In recent weeks we have received letters from customers who are concerned about how skyrocketing rates will impact their family budget, farm operations, small businesses and communities, and our overall local and national economy.

Additionally, I had an opportunity to listen in on a "public meeting" conducted by Congressman Adrian Smith which covered a wide range of issues. It was clear in listening to the concerns expressed by his constituents from across the state that affordable electric rates remain a top priority. During that same public meeting, Congressman Smith polled his listeners to determine if they support a cap-and-trade system. The results: 94 percent no, 6 percent yes.

We also recently learned in a letter received from Senator Johanns that the amendment he introduced on March 30th--which ensured that cap-and-trade legislation would not be slipped into law using budget reconciliation--was ignored by the authors of the budget resolution and dropped. Although this was discouraging news to hear, we continue to feel that the voices of constituents play a large part in the actions taken by our leaders. They are hearing our message, that we need electric rates to remain affordable. Its a simple message, but one that is strong when we all work together to make certain the message is heard!

This is a critical time for all electric consumers to get involved and speak up about that need for affordable electricity. We urge you to act now and engage in a conversation with our leaders in Washington, and you can do this through the Our Energy, Our Future campaign. Even if you don't consider yourself to be an "expert" on the complex issues surrounding energy, you probably do know whether or not you can afford to see your electric rates skyrocket, and what such increases will do to our local and national economy. Visit the Our Energy, Our Future website today and get to talking!

Editorial Submitted by Directors Rick Bergman and Lee Grove

As members of Southern Power District’s Board of Directors, we would like to make our customers, as well as all electric consumers aware of an issue that will determine how much you pay for electricity in the future. As we are writing this letter, the Chairman of the House Energy and Commerce Committee is working to push “cap and trade” legislation through Congress, with a goal to do so prior to Memorial Day.
We have been watchful of this legislation in recent months. We understand that there are many opinions about a “cap and trade” program among our customers. But through this campaign we are discovering that people with a wide range of opinions are in agreement that electric rates must remain affordable. A “cap and trade” plan is one that would drive up the cost of electricity significantly by forcing coal generating plants to purchase carbon credits in exchange for emitting carbon. Here in Nebraska, this should be of particular concern, as coal comprises 65% of all generation. And beyond your electric rates, you may also see an increase in your cost for natural gas. It is anticipated that a shift may occur in generation from coal to natural gas, which emits less carbon dioxide. This shift will drive up the price you pay for natural gas, not to mention the cost that farmers must pay for fertilizer.
With the drive to pass the bill through the Energy & Commerce Committee later this month, now is a critical time to ask some very important questions. There has never been a more appropriate time to get in touch with your Congressman and Senators in Washington. They need to know that you are concerned about the affect that this legislation will have on your electric rates. We urge you to visit www.southernpd.com/oeof and take just a few minutes to share your concerns with Congressman Adrian Smith, and Senators Ben Nelson and Mike Johanns. If you do not have email access, feel free to send your thoughts to Southern Power District and they will gladly assist you with sharing your message!

Sincerely,

Rick Bergman, Holdrege
Lee Grove, Axtell

During the past month we have seen a tremendous show of concern from SPD customers in the form of letters to our Congressman and Senators in the Our Energy, Our Future campaign. From this campaign’s beginning, the purpose has been to to inform you--our customer--about how your electric service and rates will be impacted by climate change legislation. As a public power district, it is our job to inform you about issues that will affect service and cost.
As we have received handwritten comment forms from you in recent weeks, we feel an even greater sense of that duty after hearing more about your concerns with rising cost. The stories you’ve shared to be passed on to our leaders in Washington have been varied, but they all have a common theme. You all have different needs--balancing a family budget, sustaining your life after retirement, or producing a crop in the midst of rising costs. One common need seems to tie all of these unique stories together, and that is a need for electricity that you can afford.
We are continuing to keep a close eye on debate in Congress regarding a cap and trade program. Cap and trade--depending upon how it is structured--can cause your electric rates to triple by establishing an auction for power plants to purchase emission allowances on a trading market controlled by Wall Street. This auction has been estimated by White House officials to generate revenue possibly exceeding $1 trillion, which is ultimately paid for by you--the electric consumer--in higher bills.
As this issue has developed, it seems that our message is being heard. Across the nation, congressmen and senators are hearing the message that affordable electricity for homes and businesses cannot be compromised. The message is one that is very simple...regardless of your opinion about climate change, we can all agree that affordable electricity is a necessity in our daily lives at home, work, and elsewhere. To keep your rates affordable, we need your continued help. If you have not yet sent a message to Congress, you may do so at www.southernpd.com/oeof. If you have already sent a message, consider keeping the dialogue flowing and send additional messages. Handwritten messages are also being accepted at Southern Power District for those who do not have computer access. These notes can be submitted to the attention of LeAnne Doose, Communications Director at PO Box 1687, Grand Island, NE 68802-1687. Please include your first/last name, and address.