Viewing blog posts written by Gino DiCaro
Energy: We agree with Environmental Defense Fund -- Understand costs and benefitsPosted by Gino DiCaro, VP, Communications on Oct. 18, 2013
Affordable and reliable energy is essential to California's economy and the prosperity of our workers. Manufacturers are leading the way in investing in energy efficiency and new energy sources to help us meet future energy demands.
California manufacturers already pay 50 percent higher industrial electricity rates over the rest of the country. Because of a wide range of new energy policies, those rates are increasing for not just us but the rest of the different rate classes from top to bottom. Even our poorest will pay in both higher energy costs, as well as fewer job opportunities. It's not too late to fix this.
It's not just electricity costs of course. All of our energy needs will be more expensive over the coming months and years. The total bill is unknown. The true environmental benefits are not exact.
California can do this though. We simply need thorough analysis so we know which policies provide the biggest benefit for the least cost. This will allow us to prioritize and implement a statewide energy policy that grows our economy, meets our energy goals, and drives our environmental leadership throughout the country.
This is why the Californians for Affordable and Reliable Energy coalition took the time this week to pen the following excellent blog response to the Environmental Defense Fund (EDF) reaction to a preliminary CARE and Navigant Consulting cost assessment study. We agree with CARE and EDF! California needs more analysis to ensure our energy cost effectiveness.
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California's clean energy drive will increase pricesPosted by Gino DiCaro, VP, Communications on Aug. 20, 2013
California is a national leader in pushing renewable energy, lower greenhouse gas emissions and energy efficiency. State manufacturers have contributed to the effort by installing cost-effective technologies and instituting lean manufacturing processes to reduce their demand for electricity, natural gas and transportation fuels.
No other state’s manufacturers have done as much. But with more climate and energy policies being proposed every day, it’s time to take stock of where we are and where we are headed.
If California wants to be a model for others to follow, energy supplies must be both affordable and reliable to support a massive state economy that includes manufacturing and exporting products.
Successful California manufacturers -- who employ 1.3 million workers at an average $74,000 salary – depend on priced and reliable energy to operate in this state. They need to stay competitive with manufacturers around the country and the world.
Yesterday a group including CMTA, the Little Hoover Commission, the California Small Business Association, the California Business Roundtable, and others gathered to discuss the uncertain costs of California's programs on everyone who pays for electricity, powers a vehicle, or purchases a product in the state.
“There is not a single, credible source of analysis and data that can inform companies and policymakers regarding the cumulative costs of California’s recent energy-related policies,” said Patrick Mealoy of the Navigant Consulting group. Navigant had examined key cost drivers of three prominent California-only energy programs -- the 33 percent renewable power requirement, the carbon cap and trade auction, and the low carbon fuel standard.
Navigant’s analysis showed that the industrial community alone has dropped 17 percent of its electricity demand over the last two decades. At the same time, the residential and commercial class grew their demand by about 30 percent. In part, this means that industry is already lean and spent lots of money retrofitting facilities and finding efficiencies so they could compete with the rest of the country. Any new efficiencies could be expensive and either raise the cost of goods or cause the loss of jobs in the California economy.
This month, electricity ratepayers, including manufacturers, will see their first big rate increase due partly from the 33 percent renewable power requirement. On average it will be a two-digit percentage hike for ratepayers in the Southern California Edison territory. Industrial electricity rates are already approximately 50 percent higher than the nation. Estimates are far higher than cost of living increases into the future.
Job loss and high energy prices will be unintended consequences of our complex and overlapping clean energy goals. To avoid this outcome, lawmakers should require robust cost-benefit analysis to show how regulations can be reformed to achieve reasonable goals at the lowest possible costs.
The Little Hoover Commission might have said it best at the event, “what California really needs is a ‘timeout’ on new energy mandates.” A timeout so we fully understand what we are getting into can only help make California’s exclusivity a trailblazing success for us and others.
Most of the participants at Monday’s event were part of the simultaneous launch of the Californians for Affordable & Reliable Energy coalition (CARE) – a growing group of companies and trade associations to raise awareness about California’s escalating energy costs. List here | Join here.
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Theory meets reality on California's carbon cap-and-trade programPosted by Gino DiCaro, VP, Communications on Aug. 16, 2012
Theory met reality on Tuesday at a Senate informational hearing on California's carbon cap-and-trade program that is set to start with an auction in November 2012. Craig Anderson from Solar Turbines, an industrial gas turbine manufacturer with 4,000 employees in San Diego, testified that the soon-to-be-fully-implemented cap-and-trade program is the most significant threat to his company's growth.
"I can say without hesitation that AB 32 is viewed by our company leaders as not only the most significant environmental regulation we have faced in California, but also the greatest threat to the growth of our business in California," said Anderson.
You can view Anderson's full testimony here (5:45 min).
Following are more real world impacts from employer testimony on Tuesday. These are companies that, as you'll see in their video remarks, are already some of the cleanest and most efficient in the world.
Mona Schuman with Pacific Coast Producers
View testimony here (5:49)
Ryan Modlin with Owens-Illinois
"It costs us 30 percent more already for us to do business in California than anywhere else in the United States. Under this program, it will add a couple million dollars at $20 per ton."
View testimony here (8:49)
Rob Joyce with Guardian Industries
"Compliance costs associated with cap-and-trade regulation will likely erode the competitiveness of flat glass manufacturers in California without providing a meaningful incentive to reduce greenhouse gas emissions."
View testimony here (7:49)
Key questioning and testimony also came from Sen. Rod Wright (Committee chairman), Sen. Michael Rubio, Sen. Bob Dutton, LAO's Tiffany Roberts, CMTA's Dorothy Rothrock, Insulation Manufacturers' Angus Crane, WSPA's Cathy Reheis-Boyd, NFIB's John Kabateck, CLFP's John Larrea, and a Gallo glass worker and representative. (click names for video).
Collectively the hearing's appeal to the California Air Resources Board was to freely allocate emission allowances up to the cap, for all industries, for all eight years of the program. There is no reason to do otherwise. California will still reach its goals and companies will still be forced to reduce to their capped benchmark. (Here is a chart to show how the current auction will charge the food processing industry beyond the cap over the next eight years).
The cap-and-trade concerns reached far beyond employers and workers this month too. The Federal Energy Regulatory Commissioner Philip Moeller wrote a letter last week to Gov. Jerry Brown asking him to
View the complete letter here.
It's now CARB's turn, before it is too late, to get realistic about making this program work for California's economy and environment.
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California's cap-and-trade auction creates billions in needless costsPosted by Gino DiCaro, VP, Communications on April 25, 2012
The California Air Resources Board's (CARB) cap-and-trade auction will create needless costs for employers at a time when our state must compete, scrap, wrangle, advocate and fight for every high-wage job we can get.
These costs will seriously hamstring our ability to grow. What most people don't know is that CARB is asking employers to pay for far more emission credits than are needed to reach our goals. California will reach it's 1990-level greenhouse gas emissions without the economy-debilitating cap-and-trade auction, but CARB continues to move forward.
In the charts below, the red zone represents the amount that two particularly critical sectors -- refiners and food processors -- will have to pay to purchase emission credits in CARB's auction over the next eight years. Those credits will be purchased even though the particular sector will already be on track for 1990 levels, with annual 2 percent reductions.
This punitive energy tax equals $2.96 billion in California-only costs on the refining industry and $163 million on the food processing sector. Remember too, while this auction raises a windfall of money, the 2006 AB 32 legislation prohibited revenue collection beyond the administration of the program.
(click images for larger pdf)
The high price of the proposed cap-and-trade system was also highlighted in the following Sacramento Bee piece authored by CMTA President Jack M. Stewart:
ARB twisted cap-and-trade into a job killer
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AB 32 was not intended to be a revenue raiserPosted by Gino DiCaro, VP, Communications on Jan. 30, 2012
This weekend, Gov. Jerry Brown proclaimed that revenue from the cap-and-trade system under AB 32 will go toward the construction of California's High Speed Rail project.
AB 32 was not intended to be a revenue raiser for the state of California. We dug up then-Assembly Speaker Fabian Nunez' 2006 letter of legislative intent before the bill was passed, which made it unequivocally clear that revenues raised under the regulations were not to go beyond the administration of the AB 32 program. Have a look:
Click image for full pdf
While more than 500 facilities struggle to pay for a costly cap-and-trade system in just the first year of the program, the State of California is already finding other ways to spend the money they weren't supposed to collect in the first place.
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