Energy Challenges
January 27, 2010

Hi, I’m Gene Barr, vice president of the Pennsylvania Chamber. Welcome to this month’s Pennsylvania Chamber Minute.

With the expiration of electricity rate caps, the price of energy is no doubt on the minds of many.

But beyond the adjustments of a deregulated market, many other factors could impact future costs, as well as supply.

I’m pleased to report that one of these factors – the 2006 state-specific mercury rule – has been resolved in the business community’s favor.

In December, the state Supreme Court invalidated this unnecessary regulation. The Chamber was at the forefront in fighting this rule out of concerns it would have provided no additional health benefits beyond federal mercury regulations, but would have increased electricity costs for consumers, and threatened jobs and electric supply.

Chamber members applaud the court’s decision.

But other threats remain, including a federal cap-and-trade bill, which would have a negative impact on the Commonwealth in particular as the nation’s fourth-largest coal producing state.

The Chamber is urging Congress to resist hasty enactment of a program that could create a hostile economic climate, resulting in thousands of job losses across many industry sectors.

At the state level, legislation that would increase certain renewable energy mandates could also lead to higher costs and hurt supply.

The additional mandates contained in House Bill 80 could add as much as 9 to 12 billion dollars to the cost of electricity in future years at a time when job creators and residents can least afford it. Now is not the time to increase mandates for more expensive energy.

Government should recognize, as business does, that all sources are needed to meet current and future demand, and that renewable energy must exist within the framework of the free market system in which consumers choose the best options for their needs.

And with the economy starting to rebound, now is also not the time to distort the promise of green jobs, many of which would come at the expense of jobs in the traditional energy industry.

Lawmakers should learn a lesson from some European countries in which the government mandate approach to energy policy has proven more expensive than beneficial. After all, our country’s approach to energy strategy will have great bearing on our overall economic well-being.

Pennsylvania’s job creators want to work with federal and state lawmakers to develop an energy strategy that balances environmental protection with lasting job growth and economic competitiveness.

In closing, I want to thank APPI for its sponsorship of this month’s message. If you are concerned about how the expiration of rate caps will impact your business, APPI is available to help you find the best options to manage your electricity costs. I encourage you to click on the link to find out more.

Thank you for your support and thank you for spending a minute of your time with the Pennsylvania Chamber…The statewide voice of business.