September 23, 2009

Dear Mt. Wheeler Power Members,

We are continuing our grassroots effort to keep our power rates low by communicating your concerns to Congressional leaders on proposed climate change legislation. We were pleased by the strong response from our members earlier this year.

As you may know, the bill - known as the Waxman-Markey American Clean Energy and Security Act (HR 2454) - was passed by a very narrow margin (50% to 49%) by the U.S. House of Representatives. The debate now moves to the Senate where key committees are preparing to consider the measure.

Earlier this year many of you filled out cards or went to our website to send letters expressing your concerns. This time, we are asking that you simply fill out the two postcards (one for each Senator) in your current statement and mail them to us. We will then deliver the cards to the offices of our Senators.

Low power rates are in many ways the backbone of our quality of life, and increasing the cost of electricity in an attempt to lower global temperatures is forecast to dampen the economy and adversely affect our families and local businesses.

We recognize there are two sides to this issue, but it's important to make your voice heard. Let's work hard to let our Senators know how we feel. Please look for the response cards in your upcoming statement, fill them out and mail them to us.

Together, let's keep our power rates from going through the roof.

Sincerely,

Randy Ewell
General Manager/CEO

Why We Need to be Concerned

• The cost of proposed legislation 

  First and foremost of concern is cost of any carbon legislation. Unlike "cap and trade" systems for other pollutants, where allowances are granted free of cost to utilities and industry, the most recent proposals in Washington D.C. mandate a government "auction" of allowances, amounting to a hidden tax. Without buying allowances from the federal government, utilities like Deseret Power will be forced to shut down, and turn out the lights in most rural communities. The cost of government auctioned allowances will be set by the "highest bidder" so to speak, and the proceeds of sales will mostly be used to fund unrelated government programs and funding requirements. By some estimates, the first year cost to purchase government allowances could equate to $60 million or more, for Deseret Power, which has no choice but to pass those costs through to you - the ultimate consumer. Many area co-op General Managers used the term "devastating" when describing the impact of the 100% increase in electric rates that would result in their service areas.

• A yearly increase 

  According to the most recent proposal out of Washington, the cost of buying allowances that permit CO₂ emissions from the government is designed to increase annually, as the number of allowances the government is willing to sell would be reduced year after year. To some, the goal is simple: as the prices rise, coal-fired power will become too expensive to operate, forcing power providers to switch to non-carbon resources, or increase electric rates so that consumers are forced to shut off the power.
  
  Making fuel switches is not an easy process. Many coal-fired power plants could be forced to close and new, very expensive plants would be built that will use non-carbon fuel sources. The most plentiful and reliable alternative fuel choice would be a major upsurge in nuclear power plants throughout the U.S.

• Customers will shoulder the cost 

  If you rely on power from coal-fired plants you will have no choice but to pick up the bulk of the cost.

• Economic risks 

  Recently, we've witnessed how hikes in gasoline and diesel prices can dampen the U.S. economy, leading to a downward economic spiral, and threatening disaster. Adding a hidden tax on CO₂ at this point is dangerous and risks even higher inflation and unemployment. In any event, any hope of economic recovery would be greatly delayed, and the current economic downturn severely prolonged.

• There are No Low-Cost Alternatives to Coal 

  Energy produced by alternative fuels and renewable resources such as wind, solar, geothermal, and others, are desirable in everybody's book. Right now, all those resources combined supply less than 3% of today's electric needs in the U.S. The cost of these carbon-free alternatives is very high. State of the art wind turbines, built in the very best wind zones, and fully supported with tax subsidies from the government, can't produce electricity at costs competitive with Deseret's existing coal plant. The best solar generating plants result in electric costs that are more than three times the comparable cost of electricity from reliable coal-fired generators. New nuclear power plants will not be permitted or built for another decade or more, and will cost almost as much as solar-powered electricity when and if they can be successfully constructed. The government in Washington D.C. has committed hundreds of billions of dollars in public stimulus funds, hoping to double the amount of electricity supplied from these alternative resources before the end of the current presidential term. Even if these ambitious goals are met, it will barely "move the needle" on the United States' need for domestically produced coal-fired electricity.