Wednesday, June 10, 2009

Berkshire Hathaway's MidAmerican Sees Carbon Trading Adding $120 to Bills (BRK.A)

Great minds and all that. Yesterday in response to Environmental Capital's "Clean Tech in China: Duke Energy Aims for Clean-Energy Cooperation" I commented:

Duke ratepayers will pay for buildout of Chinese infrastructure, which DUK will take as Waxman_Markey offsets.
Then when the cap ratchets down they will pay for U.S. infrastructure.
We might see headlines like this one from last week:
“Duke Energy Carolinas Asking for 12.6 Percent Rate Increase in North Carolina”
And the Chinese say thank-you.

Today Bloomberg reports:

MidAmerican Energy Holdings Co., the utility owner controlled by Warren Buffett’s Berkshire Hathaway Inc., said carbon-emissions trading as proposed under pending U.S. legislation would add $120 a month to an average customer’s power bill.

A so-called cap-and-trade system for reducing carbon emissions would raise power costs without cutting emissions from plants, MidAmerican Chairman David Sokol said today in an interview in Washington.

“It creates a false tax,” said Sokol, whose Omaha-based company owns utilities and power plants in the U.S. West and Midwest. “For the average family, it’s a $120 per-month increase in their electric bill, and nothing of value comes from it.”

The bill’s target, an 83 percent reduction of carbon dioxide emissions by 2050, can be achieved, Sokol said.

Utilities must replace coal-fired and gas-fired power plants or develop commercial technology to strip carbon dioxide from their exhaust, he said.

“That’s where the money should be spent,” Sokol said. “Adding this trading regimen is a duplicative cost.”

MidAmerican would spend $9.3 billion over the next 20 years on physical plant improvements to meet the bill’s carbon-dioxide reduction target, Sokol said. Buying emissions allowances would add another $9 billion of costs, he said. The brunt of the additional costs would be passed on to consumers....MORE