North Dakota Cap-and-Trade Summit

On April 17, 2009, the North Dakota Public Service Commission held a Carbon Cap & Trade Summit to discuss the impacts that carbon legislation currently being debated in Congress could have on North Dakota consumers and electric utilities. The meeting was held at the State Capitol in Bismarck where approximately 170 people attended. The purpose of the meeting was to gather input from experts and utility company representatives on how carbon legislation will impact consumers and what should be done to minimize the negative impacts.

Excerpts from the PSC Executive Summary...

Key Findings

1. North Dakota is one of the most coal dependent states and its consumers will be impacted more than those in nearly any other state.

2. North Dakotans currently pay some of the lowest electricity rates in the nation.

3. Energy bills are regressive in nature and higher energy costs will harm low-income customers the most.

4. Increased energy prices will result in an overall increase in costs of goods and services.

5. Abrupt changes in energy policy could be inefficient and cause undue harm, both from an economic and electric reliability standpoint.

6. Commercial scale carbon capture technology is still in its infancy.

Recommendations

- Revenue generated from any carbon regulation should be targeted for carbon technology research and development, not as an excuse for further government spending. In no instance should cap and trade become a new general government revenue source. Doing so would ensure that North Dakotans would pay a disproportionate share of the cost of federal government spending.

- Any effective solution must be global. All carbon emitting countries like China need to be involved.

- All sources of energy must be included in Cap and Trade. Carbon regulation cannot be targeted only at electricity ratepayers.

- Targets should be achievable and timed with technology advancements, not based on unrealistic or arbitrary Congressional mandates.

- Reduction proposals should have safeguards so the economy and consumers don’t suffer.

- There needs to be protections against market manipulations and large price swings. Emission reduction proposals, such as cap and trade, must include an economic safety valve to avoid excessive financial hardships, market manipulation or large price swings.

- Local distribution utilities should receive free allowances for emissions. State regulation ensures that this will not become a “windfall” for utility shareholders. Free allowances help mitigate the potential for skyrocketing electricity rates that are inherent in the President’s 100 percent auction model.

"The Commission does hasten to note, that even if the recommendations listed above are included in the legislation, it finds the cap and trade concept so inherently flawed and harmful to North Dakota consumers, that it is still a proposal that should be rejected by Congress."

The full executive summary of the summit is available here.