The American Gas Association (AGA) Wednesday gave high marks to a House Democratic proposal that would exclude residential and commercial natural gas customers from a cap-and-trade system until 2016.
The 648-page draft legislation titled the American Clean Energy and Security Act of 2009 (ACES), sponsored by Reps. Henry Waxman of California and Edward Markey of Massachusetts, recognizes the contributions of these gas customers over the past four decades in terms of increased energy efficiency and lower carbon emissions, said the AGA, which represents gas utilities.
"Our customers are using about 30% less natural gas per household now than they did in 1980 because of the smart energy choices they make every day," said AGA President David Parker.
The release of the draft legislation coincided with a call by the CEO of Piedmont Natural Gas for Congress to exclude residential and commercial gas customers from a cap-and-trade system for reducing carbon emissions. "With [their] track record of energy efficiency improvements...we don't believe a rigid cap-and-trade system is necessary for the basic residential and commercial customers at this time," said Tom Skains, who is also the AGA chairman (see Daily GPI, April 1).
The Waxman-Markey bill also proposes "carbon footprint labeling" that would provide consumers with information about the carbon dioxide emissions of each new appliance. This "will help consumers better understand the environmental footprint of their appliances compared to others nationally, resulting in greater energy efficiency and reduced greenhouse gas emissions," Parker said.
He noted that AGA had concerns about provisions in the ACES bill that would potentially penalize local gas utilities if their customers fail to reach a certain level of energy efficiency.
"While natural gas utilities will do everything in their power to assist their customers in using energy wisely, consumers will make the ultimate decision about how much energy they use," Parker said. "The utility should not be at risk financially for decisions beyond its control."
He further noted that AGA was concerned about different sections in the bill that seem to overlap -- seeking the same goal (energy efficiency) but using different approaches (cap-and-trade versus command and control), resulting in higher compliance costs for utilities and their customers.
Through a Global Warming Pollution Reduction Program, ACES would establish a market-based program for reducing global warming pollution from electric utilities, oil companies, large industrial sources and other covered entities that combined are responsible for 85% of U.S. global warming emissions (see Power Market Today, April 1).
Under this program, covered entities must have tradable federal permits, called "allowances," for each ton of pollution emitted into the atmosphere. Entities that emit less than 25,000 tons per year of carbon dioxide equivalent are not covered by this program. The program reduces the number of available allowances issued each year to ensure that aggregate emissions from the covered entities are reduced by 3% below 2005 levels in 2012, 20% below 2005 levels in 2020, 42% below 2005 levels in 2030 and 83% below 2005 levels in 2050.
AGA said it plans to work with the House Energy and Commerce Committee, which Waxman chairs, to further refine the legislation.
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