Testimony on Carbon Tax Bill

David Hauck, chair of the executive committee of the Montgomery County Sierra Club, testified on behalf of "Bill 29-10 - Excise Tax on Carbon Dioxide Emissions" on April 22 and May 18. Bill 29-10 was passed by County Council on May 18 making Montgomery County the first county in the nation to create a carbon emissions tax on major emitters of carbon dioxide. Below are David Hauck's statements.

April 22, 2010 Press Conference

Background

On April 22, Montgomery County Councilmember Roger Berliner announced that he will be introducing a bill that will tax major emitters of carbon. The bill, which would only impact the Mirant power plant in Dickerson, could raise as much as $15 million a year, with no discernable impact on County residents. At the announcement in Rockville were Michael Tidwell, executive director for the Chesapeake Climate Action Network; Councilmember George Leventhal; Councilmember Berliner; Councilmember Marc Elrich; David Hauck, chair of the executive committee of the Montgomery County Sierra Club; and Gino Renne, representing UFCW 1994.

Statement by David Hauck

The Montgomery County Sierra Club strongly supports Councilmember Berliner's bill that would impose a fee on major emitters of carbon dioxide within the county. Carbon dioxide emissions are the primary cause of global climate change and steps must be taken now to reduce this carbon pollution. For too long there have been no costs associated with releasing greenhouse gases into the atmosphere. For too long major producers and users of fossil fuels have said we can't afford to put a price on carbon emissions. The truth is that the costs of global climate change far outweigh the costs of reducing greenhouse gas emissions.

This bill recognizes that truth and includes two key provisions:

It places a specific price on carbon dioxide—$5.00 a ton—that lets large emitters know exactly how much their contribution to global climate change will cost them in the future, as well as how much reducing their carbon emissions can save them.
It dedicates half of the money raised by the fee to the county's greenhouse gas reduction programs which help homeowners, renters and businesses save energy, reduce their carbon emissions and lower their utility bills.

The Montgomery County Sierra Club recognizes the hard work and creative thought Councilmember Berliner has demonstrated in finding ways for Montgomery County to have an impact on reducing greenhouse gas emissions. This bill is the next step in that effort and we look forward to its being enacted.

May 18, 2010 County Council Meeting

Testimony by David Hauck

My name is David Hauck and I am the chair of the Sierra Club, Montgomery County Group. The Sierra Club strongly supports Councilmember Berliner's bill that would impose a fee on major emitters of carbon dioxide within the county. Carbon dioxide emissions are the primary cause of global climate change and steps must be taken now to reduce this carbon pollution. For too long there have been no costs associated with releasing greenhouse gases into the atmosphere. For too long major producers and users of fossil fuels have said we can't afford to put a price on carbon emissions. The truth is that the costs associated with global climate change far outweigh the costs of reducing greenhouse gas emissions now.

In the three weeks since this bill was introduced, the Mirant Corporation—operator of the coal-fired power plant in Dickerson—has launched a campaign that is breathtaking in its cynicism. It has aggressively rolled out a push poll in the county where only respondents' answers critical of the bill were recorded. Recently, it was discovered that e-mails opposing this bill were being sent to you, our Councilmembers, falsely using the names of county residents who had no idea their identity was being hijacked in this manner. The Mirant-paid for website that generated these fake emails now notes that "due to recent fraudulent email activity on this site, the 'Take Action' portion of the website has been disabled." I wonder who could have been responsible for the fraudulent activity?

Now, let's look at Mirant's argument that the approximately $15 million it would have to pay under this bill will cause it to reduce the output of electricity from its Dickerson plant. A few facts from the company's filings with the SEC:

The Dickerson plant provides "baseload" power. Baseload plants are designed to run nearly continuously because they supply the power that meets the day-in, day-out demands of homes and businesses. Baseload plants provide the bulk of the power Mirant generates annually and the bulk of its profits.
In 2009, Mirant's Mid-Atlantic operations (three power plants in Maryland and one in Virginia—all of them baseload plants with some peaking capacity—provided 77 percent ($380 million) of the company's total profit of $494 million. The public doesn't know how much of the $380 million in profit came from the Dickerson plant, but if it's proportional to Dickerson's share of the total generating capacity of the four plants in Mirant's Mid-Atlantic division then, in 2009, the Dickerson plant may have generated $61 million in profits.

So, I would ask how likely is it that Mirant would shut down its Dickerson plant and throw away $60 million in profits in order to avoid paying a $15 million carbon tax? And if they do not reduce the output of their Dickerson plant, then Mirant's warning of more "dirty" power being imported into Maryland from West Virginia, Ohio and Pennsylvania and a possible need to build "more high voltage transmission lines that cut through forest and farmland" is nothing more than a scare tactic.

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