Early Effects of Proposed Cap & Trade Legislation on Missouri Communities.

There has been much talk about the proposed Cap and Trade Legislation being pushed by the Obama Administration and supported by Harry Reid and Nancy Pelosi.  Many refer to this so called “clean energy legislation” as Cap and Tax because it will be the largest tax ever imposed on the American people and businesses.

The U.S. House of Representatives passed the legislation last summer.  However, it remains held up in the Senate as lawmakers weigh the possible benefits against potential job losses and higher energy costs. These proposals to reign in carbon dioxide emissions have brought any plans to build or invest in new coal-fired power plants to a screeching halt in the U.S.

Recently 15 Missouri communities saw the early effects when they were told they would no longer be able to buy electricity from Sho-Me power after Christmas of 2013  on  a long term basis.  Sho-Me cited its obligation to the co-ops as their priority.  Associated Electric, which sells wholesale power to Sho-Me, is scaling back on selling electricity to municipal utilities. They cited the uncertain future in generating additional energy as their reason.

The Cap and Trade proposal pushes for the development of alternative energy.  While the source of wind power is free, wind and other alternative energy sources cannot produce electricity that can be sold at reasonable rates. This is especially true when it comes to carbon legislation pending in Congress.

Associated Electric indefinitely suspended plans to construct a new 660-megawatt coal-fired power plant after $2 billion and financing dried up. Increased environmental regulation was cited as one of the factors in all but abandoning the project.

Due to the passage of the clean energy legislation in the House, investors and financiers are not interested in coal-fired power plants.  This is in spite of the fact that burning fossil fuels remains less expensive for generating cheap electricity.

What does all of this mean?

First, losing Sho-Me Power as a source for their power needs will most likely result in much higher electricity rates for the customers in the 15 effected communities.   They must try to find an energy supplier that’s going to give their residents economical rates.

Secondly, some cities are worried the perception of them not having a long-term power supplier could hurt their growing community’s economic development.  Developers my shy away from these communities due to concerns over a lack of affordable and reliable power.

Additionally, the situation shines light on Missouri’s lack of a long-term and affordable energy source if burning coal becomes too expensive to produce.  As a result the cities will have to band together to pool resources and negotiate for bulk power on their own.

The residents of these 15 communities are the first in Missouri who will feel the effects of this job killing tax.  Those on fixed income will be forced to make choices between electricity and food or medicine.  Businesses will be forced to cut costs elsewhere to offset the greatly increased cost of energy.  As the cost of energy increases for these communities companies could be forced to eliminate these 15 communities from plans for facility expansion or new construction.

This so-called clean energy legislation is not what is needed at a time when businesses are already having to determine means of cutting costs to survive in this strained economy. These 15 Missouri communities will be worth watching to give us a look at what the short and long term effects will be.

Call your Senator’s offices and once again express your opposition to this legislation. Then keep calling them every week until it is stopped.