The claim is that HR 2998, drafted in large part by Duke Energy, will protect ratepayers, reduce carbon emissions, and help solve global warming. But it is an attempt to maintain business as usual in the electric utility industry.

The reason for HR 2998 is that in the past 2 to 3 years numerous coal plants have been cancelled because lenders would not assume the risk of financing overly expensive and polluting coal-fire power plants that take years to build. Instead, the market was (and is) pushing renewables and efficiency. For once, the market is heading the right direction. However, HR 2998, as written, would stunt the growth of the renewable and energy efficiency sectors of the economy in favor of expensive, polluting coal plants.

Remember, the only power plants that have been completed since Governor Mitch Daniels took office are wind farms in Northwest Indiana. Daniels did nothing to provide incentives for these wind farms. The only incentive was a federal production tax credit. Coal plants, the other hand, require massive taxpayer and ratepayer subsidies to be built and to keep running, such as: state tax incentives; federal loan guarantees (putting federal taxpayers on the hook); Construction Work in Progress (CWIP) so that utilities can recover financing costs from ratepayers during construction; and automatic rate adjustment mechanisms (trackers that increase rates) to invest in air pollution control technology. Coal plants are already financially unviable. Now utility companies need HR 2998 to keep their coal plants running and have an excuse to build more.

• Give away billions of dollars to the utility industry in the form of emission permits (allowances) for carbon dioxide and create loopholes to keep the existing fleet of obsolete coal plants running.

• Force electric ratepayers through a surcharge on their bills to pay for research & development that the industry should be paying for to determine if capturing carbon and injecting it deep underground is feasible.

• Create a sham moratorium on the construction of new coal-fired power plants by exempting 45 plants, including Duke’s proposed coal gasification plant at Edwardsport.

• Create a Renewable Electricity Standard that maintains the status quo for renewable investment. Research conducted by the Union of Concerned Scientists shows that the RES in HR 2998 will most likely be weaker than what the market is doing today in terms of wind and other renewable energy investment.

• Prohibit the U.S. Environmental Protection Agency from regulating carbon dioxide emissions.

• In 2007 the private health insurance system cost $2.4 trillion.

• In the U.S., we spend more per capita on health care than any other country on earth.

• America’s health care system is ranked 37th in the world, right after Costa Rica, by the World Health Organization.

• 1 in 7 Americans have no health insurance coverage at all. That’s 47 million people, 15% of the population. Millions more struggle with increasing premiums, deductibles, and co-pays.

• The uninsured live sicker and die younger. The Institute of Medicine calculates that 18,000 people die every year purely because they don’t have any insurance.

• Medical bills are the leading cause of personal bankruptcy. 75% of those declaring bankruptcy had insurance at the time they got sick.

• Public opinion polls consistently find that 65% or more of Americans surveyed favor Single Payer health insurance (Medicare for everyone), even if it means tax increases. More and more, business and labor groups are coming to the same conclusion. In a 2008 poll of U.S. physicians, 59% favored Single Payer health insurance.

• Both the General Accounting Office (GAO) and the Congressional Budget Office (CBO) reached the same conclusion: Eliminating private health insurance and covering everyone under a Single Payer public program would increase efficiency and cut overhead so much that it would leave enough money to cover all the uninsured.

• 96% of Indiana’s electricity comes from coal-fired power plants.

• From 2003 to 2007 electric rates in Indiana increased almost 30%.

• Despite the high cost of living in California, the average electric bill in California ($83.60/mo) is cheaper than the average electric bill in Indiana ($87.44/mo) because of California's aggressive implementation of energy efficiency and renewable sources of electricity.

• $5 billion each year is spent in Indiana (and nearly $170 billion nationwide) on health care costs and job related losses due to the particulate matter emissions (soot) coming out of the smokestacks of coal plants.

Penalizing Pollution While Rewarding Consumers: Tax is not always a dirty word
HR 2998 would attempt to establish a market-based system to trade pollution allowances (much like trading stock). The idea is to reduce CO₂ emissions by capping the number of allowances available and reducing them over time. This is called a cap and trade system. But instead of forcing big polluters to pay for the allowances up front, HR 2998 gives most of them away. The bill also provides for loopholes (known as offsets) to allow utility companies to keep emitting carbon dioxide. This means that we’ll be seeing more speculation and gaming to make money on allowances than actual reductions in carbon emissions.

Conservative and liberal economists agree that a carbon tax (or dirty fuel fee) is preferable because a carbon tax:

• Is transparent;

• Avoids gaming and corruption;

• Creates price stability;

• Envisions the proceeds to be used in the public interest, not a private giveaway;

• Does not require additional bureaucracy, unlike the cap and trade system; and

• Penalizes the unproductive end of the economy (pollution) and rewards the productive end of the economy.

Revenue from the carbon tax could be used for offsetting increases in energy costs, helping to reduce the cost of public health insurance, and defraying payroll taxes.

Please call, write, and/or e-mail:

1. Tell them to oppose HR 2998!

2. Urge them to replace cap and trade with a carbon tax (like HR 1337, authored by Rep. Larson).

3. Encourage them to use the revenue from the carbon tax to help transition to Single Payer health insurance, or Medicare for everyone (like HR 676, authored by Rep. Conyers).

Senator Bayh refuses support a strong Renewable Electricity Standard (RES) in the U.S. Senate. He says he is concerned about near term rate increases from an RES, but he also publicly supported Duke’s proposed coal plant in Edwardsport, IN that will result in much larger rate increases than an RES ever would.

Moreover, in 2007, his wife, Susan Bayh, collected $248,700 in cash and stock as a board member of Anthem/WellPoint, one of the largest insurance companies in the U.S. She also sits on four other health-related boards. Senator Bayh says he is “agnostic” about health care and refuses to recuse himself from votes regarding health care, despite this obvious conflict of interest.

And finally, Senator Bayh said he is in the U.S. Senate to “protect business interests.”

Tell Senator Bayh to start protecting consumer interests instead of business interests by:

1. Supporting a carbon tax;

2. Supporting a strong Renewable Electricity Standard of at least 25% by 2025; and

3. Recusing himself from any votes regarding Health Care. His family's income from Anthem/Wellpoint creates an obvious conflict of interest!

At the Indiana Utility Regulatory Commission (IURC) public field hearing in Gary on March 3, 2009, over 600 people showed up to testify against NIPSCO’s requested rate increase. The hearing was held at a venue that only seated about half of those people, so about 300 people were left outside protesting and chanting “Fight the Hike!” Here is why:

• In the 4th quarter of 2008, NiSource profits rose nearly $100 million dollars compared to the same quarter in the previous year. Their profits rose to $162 million, up from $67 million in the 4th quarter of 2007.

• NiSource directors more than doubled their salaries last year. In 2007, NiSource directors made $80,000. In 2008, they raised that to $165,000.

• NiSource announced that it plans to cut about 370 jobs across its 16-state operating territory over the course of 2009.

• If NiSource profits are increasing and it is doubling the salaries of it’s board members, why is it cutting jobs and asking for rate increases in the worst economy we have seen since the Great Depression? We need to make our voices heard! We need to demand more public field hearings across Northern Indiana so that all of the people who did not have the chance to testify can voice their plights and let the IURC understand how this rate increase would impact them!

Tell them to DENY NIPSCO’s request for a 16.5% rate increase!

• Tell them to make NIPSCO credit 100% of off-system sales to ratepayers;

• Tell them to deny NIPSCO’s request for additional “reliability” trackers. It is NIPSCO’s responsibility as a regulated utility is to provide reliable service. They should not need incentives to do what they are already supposed to be doing.

• If you have had problems with NIPSCO’s quality of service, include that in your letter. Let the IURC know that NIPSCO does not deserve to have the highest rate of return for the poorest quality of service of all the Indiana investor-owned utilities.

• Tell them to demand that the Indiana Utility Regulatory Commission schedule more public field hearings across Northern Indiana!

• Ask that your letter be included in the testimony that the OUCC files with the Regulatory Commission for Cause No. 43526.

Attn: David Stipler
National City Center
115 W. Washington St., Suite 1500 South
Indianapolis, Indiana 46204
uccinfo@oucc.in.gov
(888) 441-2494

Congress is currently debating the future of nuclear power. As early as this Tuesday, the Senate Energy and Natural Resources Committee will take a "Sense of the Senate" Vote to set the stage for expansion of nuclear power in the U.S. Senator Evan Bayh sits on that Committee. Please call Senator Bayh and urge him to VOTE AGAINST Senator Murkowski’s “Sense of the Senate” amendment regarding the strategic role of nuclear energy. This amendment states "additional nuclear energy generating capability is critical for the economic well-being, energy security, and welfare of the people of the United States."

From conversations with CAC canvassers, we understand that many of you have questions about nuclear power, and some of you see merits in expanding nuclear power investments. CAC is convinced that energy policy in the U.S. and Indiana needs to avoid the expansion of nuclear energy, and instead create the expansion of energy efficiency, renewable resources, and distributed power. There are many reasons why, but the top of the list is the cost. Nuclear power is far too expensive to taxpayers and ratepayers. To read our analysis of why, click here.

Please call or e-mail Senator Bayh by Tuesday morning (June 16th) and urge him to OPPOSE the “Sense of the Senate” resolution that would build support for expanding nuclear power. Urge him to support the expansion of energy efficiency, renewable resources, and distributed power instead. These resources can meet electric energy demand much more cheaply and cleanly.

Call Sen. Bayh’s Washington, D.C. office at (202) 224-5623.

Email him via his web form at http://bayh.senate.gov/contact/email/.

Thanks for taking action at this critical juncture – your phone call will make a significant difference in the future of energy policy in this country and this state.

Grant Smith
Executive Director
Citizens Action Coalition