Congress needs to take action on carbon pricing to establish more parity between renewables and fossil fuels that historically have enjoyed generous tax code subsidies, FERC Commissioner Marc Spitzer, a former tax attorney and Arizona state regulator, told a Law Seminars International conference, “Energy in California,” Tuesday in San Francisco.

Unlike natural gas and electric infrastructure siting where federal regulators have received increased authority to grant incentives, the carbon cap-and-trade question needs to be addressed by Congress, Spitzer said.

“I’m one of those Republicans who supports legislation regarding carbon,” said Spitzer, qualifying his stance to emphasize that he doesn’t “want to put the coal industry out of business,” but at the same time, he feels “coal has had a free ride in terms of externalities.

“I have my own opinions on how I’d craft that bill, but I’ll leave it to Congress. I think that there should be action at the federal level. Eventually FERC should have the authority to police the physical carbon markets and the CFTC [Commodity Futures Trading Commission] should have the authority for the derivative markets, which is the same breakdown we have for physical electricity and natural gas markets. I think that is an appropriate demarcation line.”

Noting that people can debate how Congress crafts the bill from various perspectives, Spitzer said that when energy CEOs come to his office they are looking for more certainty even though they might have coal-fired generation in Midwest and Southeast companies, they still can’t do planning right now.

He said California utilities for the most part have “cleaned up their acts,” but in other areas where there is what Spitzer called “an overallocation to coal,” those ratepayers in the coal-dominant areas are being subsidized by the ratepayers in places like California.

“So I think the ultimate answer is through Congress, and unfortunately we seem to have lost a lot of priority to debate over health care, and I would like to see energy legislation reactivated.”

Spitzer said there is a need for “more concrete rules” on pricing products, harking back to his earlier career as a tax lawyer and how the oil and gas industry has received major subsidies through the tax code going back to the 1920s.

“I would like to see a law that created a symmetrical approach to the tax benefits where carbon pays for carbon — no more, no less,” Spitzer said.

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