October 29, 2009 by ggackle
An "Alternative Compliance Program" developed by MidAmerican Energy in response to proposed "cap and trade" greenhouse gas legislation has received a critical assessment from the Iowa Department of Natural Resources (DNR).
The state's largest electric utility has been a leading critic of the "cap and trade" legislation under debate in Congress, and it submitted a white paper Oct. 13 outlining an "alternative compliance program" to the Iowa Utilities Board. The filing was part of the utilities board inquiry into the impact of the proposed American Clean Energy and Security Act of 2009, the federal "cap and trade" legislation.
Under MidAmerican's alternative, the states would be allowed to opt out of the federal "cap and trade" plan, and non-compliance penalties for not meeting air quality caps would fall first on the state.
"The DNR does not believe that using the same non-compliance penalty for MidAmerican's alternative mechanism as for participants in the cap-and-trade program would be appropriate," the state agency told the utilities board in its filing. "By opting out of the cap-and-trade program, MidAmerican is not required to pay for the carbon they emit while other entities are required to do so.
"These are very different scenarios. MidAmerican is avoiding a business cost by opting out and is avoiding the constant financial pressure of the allowance program which would otherwise provide an incentive to them to reduce emissions dramatically and quickly," the Iowa DNR stated.
The state environmental agency also questioned the suggested plan's language which would make the state subject to federal penalties if greenhouse gas emission caps were missed by the utility.
"In addition, it is unclear why the state would agree in this situation to become the entity subject to federal penalty," the DNR stated. "MidAmerican's language – 'If action or inaction by a covered utility is the cause for incurring the penalty. . .' - leaves a rather large and obvious loophole for them to avoid paying."
• For MidAmerican 'cap and trade' alternative plan, CLICK HERE.
• For Iowa Department of Natural Resources analysis of MidAmerican plan, CLICK HERE.
• For MidAmerican Energy's final comments before Iowa Utilities Board on cap and trade impact, CLICK HERE.
• For the Environmental Law & Policy Center response to MidAmerican Energy's 'alternative' cap and trade plan, CLICK HERE.
