Energy and Environment MonitorOn June 26, 2009, H.R. 2454, the American Clean Energy and Security Act of 2009 (“ACESA”), passed the United States House of Representatives by a vote of 219 to 212, with strong bipartisan opposition that included forty-four Democrats. Kentucky Representatives John Yarmuth (D-3rd District) and Ben Chandler (D-6th District) voted in favor of the bill. Kentucky Representatives Ed Whitfield (R-1st District), Brett Guthrie (R-2nd District), Geoff Davis (R-4th District), and Hal Rodgers (R-5th District) voted against the bill.
H.R. 2454 was introduced by the House Committee on Energy and Commerce Chairman Henry Waxman (D-CA) on May 15, 2009. Just days before the House voted on the bill, the legislation text grew from 946 pages to 1,201 pages. It was accompanied by a 743-page committee report. The final text of the bill was not released until 3:09 a.m. the morning of June 26, 2009.
In an op-ed article posted on his website1, Rep. Yarmuth states that ACESA will reduce our nation’s dependence on foreign oil and create thousands of jobs in Kentucky and millions more across the nation. On the advice of Louisville Gas and Electric, a utility company that serves 318,000 natural gas and 390,000 electric customers in Louisville and the surrounding counties, Rep. Yarmuth opposed an earlier version of the bill that would have unduly impacted Louisville consumers. However, both Rep. Yarmuth and LG&E believe that the final draft of the bill is the best possible bill that could have come out of the House. Rep. Yarmuth notes that the bill has support from a diverse cross-section of interests, including General Electric, the Union of Concerned Scientists, the Evangelical Climate Initiative, the U.S. Conference of Catholic Bishops, Dupont, Shell Oil, the Sierra Club, the League of Conservation Voters, UAW, Duke Energy, ALCOA, and the U.S. Steelworkers of America. Rep. Yarmuth also noted that if Congress had not acted, the Environmental Protection Agency would be required by law to set its own emission standards. Rep. Yarmuth believes that any EPA standards will likely be very strict and not include provisions to protect Kentucky families from sizeable electricity rate increases.
In statement released shortly after the vote, Rep. Chandler also noted that he had concerns about early versions of this bill2. However, he successfully advocated for significant changes in the bill that he believes positively will impact Kentucky. He cites provisions granting $30 million dollars in additional allowances for Kentucky rural electric cooperatives and a $60 billion dollar investment in clean coal. Rep. Chandler believes that this bill will, with time, fundamentally change the way Kentucky produces and uses energy, while creating better opportunities for its people. He believes that the bill will create more jobs, promote cleaner industry, and spur strong economic growth in the Commonwealth.
Rep. Whitfield voted against ACESA citing an enormous negative impact on the use of coal, a vital resource for Kentucky, and drastically higher energy costs for Kentucky consumers.3 Rep. Whitfield noted that, by some estimates, electricity prices could increase by as much as 65% under ACESA. Additionally, he believes that the bill would require Kentucky to transfer over $385 million in wealth to other countries, and the United States as a whole over $15 billion. Rep. Yarmuth believes that this shift of wealth will cost Kentucky and the rest of the nation hundreds of thousands of jobs. Lastly, Rep. Whitfield noted his concern that Kentucky power generators will not get all of the allocations they need to cover their carbon dioxide emissions as mandated under the legislation, while states such as California, Washington, and New Jersey would receive more emissions credits than they need. Consequently, the bill will cost Kentuckians an additional $543.3 million to purchase emission permits from other states in addition to the costs required to bring on new technologies. Whitfield pointed out that this discrepancy will unfairly hurt consumers in Kentucky who will be forced to pay much higher electricity costs while rates in other states decrease by comparison.
Rep. Davis noted his strong opposition to ACESA, calling the bill “nothing more than the economic colonization of the heartland States by States like New York and California to subsidize their social programs.”4 He went on to say that “[t]his legislation is not just about energy; it has become about confiscating wealth.” Rep Davis cites a report by the non-profit Heritage Foundation which concludes that ACESA would cost Kentucky nearly 22,000 jobs in 2012, the year that ACESA would go into effect. The same Heritage Foundation report predicts a $1.8 billion drop in Kentucky’s gross state product in 2012 directly attributable to ACESA. The report further predicts that the drop in Kentucky’s GSP would average $3.5 billion in the years between 2012 and 2035.5 Rep. Davis notes that ACESA is opposed by multiple local and national organizations, including: the House of Representatives of the General Assembly of the Commonwealth of Kentucky; the Senate of the General Assembly of the Commonwealth of Kentucky; the Kentucky Chamber of Commerce; the Kentucky Association of Electric Cooperatives; the Kentucky Association of Manufacturers; the Kentucky Farm Bureau Federation; the National Association of Home Builders; the Center for Fiscal Responsibility; the National Cattleman Beef Association; the American Farm Bureau; Greenpeace; the U.S. Chamber of Commerce; the National Association of Manufacturers; and the National Federation of Independent Businesses.
In a very strongly worded statement following the vote, Rep. Rogers called ACESA “reckless,” “disturbing,” and “unimaginable” and condemned its supporters as “irresponsible.”6 Rep. Rogers noted that an independent analysis predicted that 2.3 to 2.7 million jobs would be lost nationwide over the next 20 years due to ACESA. Rep. Rogers has also expressed his concern over the disproportionate affect of ACESA on Kentucky in particular. He notes that the enormous tax on coal-burning companies will necessarily be passed onto consumers. He states that the bill will cost Kentucky electric consumers an estimated $561 million in 2012. Furthermore, Rep. Rogers states that when the increased costs of gasoline, diesel, food, and goods are taken into consideration, some studies show that ACESA would cost each Kentucky family an additional $4600 a year when fully implemented.
This article was co-authored by Kevin McGuire and Mary Beth Naumann, Jackson Kelly PLLC. For more information on the authors see (McGuire) here and (Naumann) here.
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1 http://yarmuth.house.gov/index.cfm?sectionid=6&parentid=1§iontree=6&itemid=503
3 http://whitfield.house.gov/news/press.aspx?id=345
4 http://geoffdavis.house.gov/News/DocumentSingle.aspx?DocumentID=134809
5 http://www.heritage.org/Research/EnergyandEnvironment/upload/wm2504_table1.pdf
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