Calif. to officially launch greenhouse gas system

Associated Press Modified: November 12, 2012 at 3:16 pm •  Published: November 12, 2012
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Some groups have proposed using part of the money to help businesses regulated under the cap to buy and install energy efficient technology to help save money.

While no one believes California's cap-and-trade program alone will remedy climate change, the system is designed to show it can be done in the world's ninth-largest economy and provide a blueprint for other governments, the board said.

Officials believe the re-election of President Barack Obama, who in his acceptance speech voiced support for battling climate change, will embolden states to follow California's lead.

"With the election, we expect states that had dropped their own climate efforts to take a new look at what they can do, and some of these ideas will be adapted or adopted elsewhere," Nichols said.

Business groups say California's regulations and high taxes are already a threat to their bottom lines, and adding more costs in a bad economy is perilous to growth.

Utilities say ratepayers should expect increases.

The Modesto Irrigation District — which provides its customers with a mix of energy from traditional coal-and-natural gas-fired power plants and renewable sources — said customers will see bills increase in 2013 due to cap and trade.

"We will have on our billing a surcharge that will address cap and trade, and show ratepayers exactly how much more they will pay," said Greg Salyer, resource planning and development manager at the district.

Salyer said the district will not know exactly how much higher rates will go until after Wednesday's auction, which will set prices for each ton of carbon emissions.

Ratepayers will see a bit of relief early on because some of the auction proceeds have been earmarked for return to utility customers. The California Public Utilities Commission will ultimately decide how those rebates are handled next year.

In the end, proponents of California's ambitious new program say the increases in costs will be offset by gains in the state's clean technology sector, and by air quality improvements and other benefits of emission reductions.

That said, even supporters acknowledge that changes in the price of energy are likely to occur.

"We don't want to dismiss the idea that there will be changes to the energy price structure because of a program like this," said Timothy O'Connor of Environmental Defense Fund. "But that's not a reason to throw it out."

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Jason Dearen can be reached at http://www.twitter.com/JHDearen

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