Clean energy bill bad for Midwest consumers, Dusty Johnson tells Senate panel

WASHINGTON — Mitchell resident Dusty Johnson engaged in a face-to-face intellectual confrontation Wednesday with one of the nation’s leading Democratic senators over the issue of global warming.

Johnson, the chairman of the South Dakota Public Utilities Commission, testified to the U.S. Senate Committee on Environment and Public Works about his opposition to legislation seeking a reduction in greenhouse-gas emissions. The Daily Republic watched the Webcast of the hearing.

Johnson acknowledged that the planet is warming and said action is needed, but he said the pending legislation is beset by “regional dispari- ties” that will result in dramatically higher utility bills for South Dakotans and other Midwesterners.

“I’m concerned that this bill is not fair,” Johnson said during his opening statement, “and I’m concerned that it hurts consumers — especially Midwestern consumers — far more than it has to.”

The legislation is called the “Clean Energy Jobs and American Power Act.” It seeks to cap the nation’s greenhouse-gas emissions — which are thought to be contributing to global warming — at a level 20 percent below 2005 emissions by 2020, and 83 percent below 2005 emissions by 2050. Power plants, factories and other emitters would be allowed to buy and sell pollution allowances. The combination of the cap with the allowances market is known as a “cap and trade” system.

The bill’s supporters think the cost of the allowances would motivate polluters to reduce their emissions over time. At issue is the degree to which those costs would initially be passed on to consumers in the form of higher energy prices.

Supporters of the legislation say its environmental benefits will justify the minimal price increases, while Johnson and other opponents think the price increases will be too high — especially in certain regions of the country — to justify what they think will be a minimal impact on global warming.

Furthermore, Johnson thinks the initial allocation of the allowances has been politically manipulated to benefit coastal states such as California while hurting Midwestern states such as South Dakota. The result, he claimed, would be a migration of money and jobs from the Midwest to the coasts.

“That is I think one clear example of how this bill, at least in its current form, is bad for the Midwest, and I think is an example of a provision that is more about politics than about the environment,” he said.

Johnson, a Republican, was part of a seven-member panel of witnesses and was the last of the seven to deliver an opening statement. Immediately after Johnson finished speaking, the committee chairwoman, Sen. Barbara Boxer, D-Calif., began criticizing what she called his “gloom and doom” testimony.

“I want to start with you,” she said to Johnson, “because you said a few things that I want to correct in the record.”

Boxer, one of the authors of the climate-change legislation, commended Johnson’s concern for energy consumers but insisted that her legislation has the consumer in mind.

“I am considered a champion of consumers,” she said. “Got the award from the Consumer Federation of America a while back, and I’m very proud of that. So let’s talk about that, because I wouldn’t support a bill that wasn’t fair to consumers.”

She then asked Johnson if he knew what percentage of the legislation’s allowance allocations are dedicated to protecting consumers. Johnson began to say that he’s seen different numbers, but he was quickly was cut off by Boxer.

“Do you know the percent?” she demanded.

“I do not, ma’am,” Johnson said.

“OK, it’s 70 percent,” Boxer said. She then acknowledged that the percentage might need to be increased to meet the needs of South Dakota consumers, but she said the existing legislation would result in only 30 cents per day of increased costs for the average American. She later threw out a figure of $5 per month.

Boxer didn’t give Johnson a chance to respond to her cost predictions, but he returned to the issue later in response to a question from a different senator. He said the legislation would cause South Dakotans to pay as much as 25 percent more for electricity as soon as 2012, which would equate to a $250 million impact on the state.

“When we start talking about a postage stamp a day or we talk about a hundred dollars a year, those are national numbers, and I think they gloss over the very real and the very problematic regional disparities,” he said. “Five dollars from South Dakotans? I don’t believe it. Most of that analysis has been done on flawed presumptions.”

During his opening statement, Johnson referenced a provision in the legislation that would extend rebates to low- and middle-income people to help them pay their higher utility bills. Johnson said he doesn’t want Americans to grow more dependent on a check from the government.

Boxer attacked that statement in her response to Johnson’s comments.

“You don’t want people to be dependent on the federal government. Do you want people to be dependent on foreign oil?” she asked. Without allowing Johnson time to respond, she continued, “I doubt it. That’s a patriotic issue, too. So I think the issue is how do we do this in the right way where we become energy independent, create jobs for our people and keep consumers whole. I think we share those goals.”

At multiple points during the panel’s hour-long hearing, Boxer expressed a desire to work with the opponents of the legislation.

“The bottom line here is let’s continue to talk, because I sense from everybody’s comments that we all want the same thing,” she said.

Johnson expressed a similar view. “I am no Neanderthal,” he said. “I believe the globe is warming, and I believe we should reduce our carbon footprint. … I am hopeful that we can improve this bill so it moves us farther down the field in the right way.”

The panel that included Johnson was one of four to testify Wednesday before the committee. The committee began its hearings on the legislation with testimony from two panels Tuesday and will conclude with four more panels today. It’s expected that 54 witnesses will have testified by the time the hearings end.

Johnson told The Daily Republic earlier this week that his name was on a list of potential witnesses forwarded to Congress by the National Association of Regulatory Utility Commissioners, on whose board of directors he serves.

Sen. John Thune, R-S.D., was among the high-ranking senators who saw the list and suggested Johnson’s selection.

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