American Power Act Revealed
Posted By on May 17, 2010
There have been few seasons so politically turbulent as 2010 in recent memory and after the debacle that surrounded the health care legislation, Senators John Kerry and Joseph Lieberman have finally revealed their own version of a climate bill. The American Power Act was initially put forward by these two senators in association with the Republican, Lindsey Graham, but in a much publicized withdrawal, he has since distanced himself from the work.
More than one year previously, the House of Representatives trumpeted the American Clean Energy and Security Act, seen by many as an important piece of climate legislation. It took a long time for the American Power Act to emerge and there are certain similarities. However, the ACES Act called for a more comprehensive cap and trade mechanism, while the Senate version deals with curtailing carbon emissions by focusing mainly on power utility companies and the very largest emitters.
Of much interest, the American Power Act ensures that any revenues raised from fees collected from the utility companies is largely rebated to consumers, although a significant part of it will go towards paying off the “national debt.” Utility costs will undoubtedly rise as a consequence of the Act, as it puts a premium on a ton of carbon for the utility companies, and the rebate is intended to cushion this. Initially, two thirds of revenues will go back to the public, with this increasing to three quarters, by 2013.
Pres. Obama originally proposed a fully comprehensive cap and trade system impacting all areas of business. This is a far cry from what is proposed under the American Power Act, where only those responsible for more than 25,000 tons of carbon per year are expected to comply. This means that 7500 organizations will be impacted, but others may participate on a voluntary basis by taking part in a highly regulated, cash only, secondary market.
Before it was released, many thought that the Kerry/Lieberman legislation would cause trouble for existing regional or state initiatives, themselves set up to harness carbon emissions. In particular, California’s AB 32 law was expected to be challenged, even as it started to show its teeth. It does appear that these examples of state initiatives will be protected, however.
A number of incentives have been included in the American Power Act to help fund nuclear power plants through loan guarantees, tax credits, federal risk insurance and expedited licensing. Renewable energy advocates believe that not enough has been done to help them with their individual causes and insist that more is done to block offshore oil drilling in the wake of 2010′s major events.
2010 is an election year and many incumbent senators and representatives are concerned about their futures. Energy reform is a very hot topic as the BP oil rig disaster is expected to remain in the news for many months of the year. The American Power Act includes provisions to allow states to opt out and abandon offshore oil, at least within 75 miles of their shoreline.
While many details remain to be sorted out, including how emissions allowances will be distributed, there is no doubt that an effective carbon tax of some kind is likely. Individual organizations should make sure that they are aware of their own situations, able to cut back on their energy use and carbon liabilities and implement plans to safeguard their interests.
Daniel Stouffer has a lot of information about the American Power Act and how a visit to www.verisae.com can be of use to you.