Utility warns carbon emissions regulation could triple electric bills

New clean air rules and potential legislation that would limit carbon emissions nationally could cause local electric bills to triple, says Dalton Utilities president and CEO Don Cope.

Cope briefed utility board members on the legislative and regulatory outlook at their meeting on Monday.

He said he had listened last week to a presentation by the Edison Electric Institute, an organization that all of the large, shareholder-owned utilities belong to, on the possibility of legislation capping carbon emissions produced by fossil fuels such as coal and oil.

"Their estimate is that it will cost the average household in the United States between $3,000 and $6,000 per year," he said.

Cope said that is likely a high estimate. But he said if the real cost is even half of the lower end of that range, it will still cost the average household $1,500 a year or about $125 a month.

"That's a $125 increase on every electrical bill on every household in the country," he said. "On our system, the average customer doesn't have a $125 electrical bill."

Data provided by Dalton Utilities shows its average residential power bill is $69.79 a month so a $125 increase would basically triple the average bill.

Cope said state rules that took effect earlier this year mandating that coal-fired plants be retrofitted to reduce sulfur dioxide, nitrogen oxide and mercury emissions will also drive up the utility's costs.

"We are going to have about a 12 percent cost increase right now because of Georgia law for everything that we buy that is powered by coal. You add on top of that the federal legislation and the regulation that is going to be associated with it and who knows what the costs of electricity will be," he said.

Dalton Utilities officials said they currently get about 40 percent of their electricity from coal-fired plants.

"People need to understand what these costs are, where they are coming from and what the tradeoffs are," Cope said.

Larry Johnson, an economist at Dalton State College, said that utilities have the technology to reduce sulfur dioxide and nitrogen oxide emissions from coal-burning plants, but removing carbon dioxide is a different matter.

"About all they can do is collect it, and then you'd have to store it underground or something like that," he said.

The U.S. Environmental Protection Agency last week declared carbon dioxide a danger to public health, which gives the government the power to impose regulations on industries that emit it.

Cope said regulators are also pressuring utilities to get an increasing share of their power from "renewable" sources such as solar or wind. But he said they do not allow utilities to count nuclear generation as a renewable source, something he and others in the industry disagree with. Dalton Utilities is part owner of nuclear reactors at Plant Vogtle and Plant Hatch.

"They are going to force things on us like wind power, which is at best only available to run 30 to 40 percent of the time and conservatively only available 20 percent of the time," he said.

Cope said the only wind power that would be available in Georgia would be offshore. Otherwise, he said, the state would have to buy wind power from producers in the Western states, and that would require new high-voltage transmission lines running across the country.

Cope said carbon emissions per dollar of gross domestic product has been declining in the United States even as it has been growing in other parts of the world.

"We are doing the right things in this country already. It's the rest of the world that has problems. Yet we are going to take the lead, even though we are in an economic crisis. We are going to take the lead and shut down things," he said.

Brian Anderson, president of the Dalton-Whitfield Chamber of Commerce, said such regulations could take a big bite out of manufacturing, especially in the Southeast. They could drive more manufacturing offshore, especially if other nations do not adopt such stringent measures, allowing those countries to keep their energy prices down.

"Companies have to survive, and they are going to go where they can," he said.

Anderson said some companies are actually looking at bringing some manufacturing back to the United States because they have found the benefits of being close to their customers outweigh any savings from lower labor costs overseas but driving up their costs here could hinder that trend.

The Dalton Utilities board voted to put the extension of sewerage to Tunnel Hill out to bids. The estimated cost of the project is $2.25 million and the estimated construction time is 210 days. The project will lay 23,200 feet on eight-inch pipe from the Mill Creek treatment plant north along Highway 41.