EEI President Tom Kuhn released the following statement regarding today’s release of a study on the impact of allocating emissions allowances to merchant coal generators under federal cap-and-trade legislation to cap greenhouse gas emissions:

“For more than two years, EEI has worked to help support enactment of federal legislation to address climate change while also ensuring that price increases to customers can be reduced to the fullest extent possible as we move to a low-carbon economy.

“The study released today by various groups completely sidesteps the reality that compliance costs for merchant coal generators under H.R. 2454 will be increased significantly. Ironically, it would be some of the very consumers they profess to protect who would suffer if merchant coal generators are deprived of any emissions allowances.

“If merchant coal generators do not receive any of the allowances allocated to the electricity sector, the result will be upward pressure on wholesale electricity costs.

“As a result, customers whose local distribution companies are buying electricity from these generators will see even higher prices.

“Without receiving a portion of the emissions allowances, some merchant coal generators would simply shutter their plants, harming their local economies, creating an even greater demand for natural gas-fired electricity, and putting upward pressure on natural gas prices.

“The House leadership worked tirelessly to forge an emissions allocation formula that will benefit electricity customers nationwide by helping to reduce what we all recognize will be higher costs under a cap-and-trade bill.”