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North Dakota utility regulators are taking a hard line on proposals for a cap-and-trade system for carbon emissions—one that is very different from the plan emanating from Washington.
In May, the Public Service Commission released a report opposing a cap-and-trade system. The state’s citizens and industries would suffer disproportionately, the report said, because about 95 percent of the power generated by in-state utilities—much of which is exported—comes from in-state coal mines. A cap-and-trade system would induce significant cost increases for in-state utilities, which would be passed on to ratepayers. The coal industry itself—a big employer in the state—would also bear the brunt of such regulation.
The report urged that any carbon regulation be targeted for technology research and development rather than be considered general government revenue. But it added that even if all recommendations for improvement were embraced, the commission found the concept “so inherently flawed” that it should be rejected by Congress.
Ron Wirtz is a Minneapolis Fed regional outreach director. Ron tracks current business conditions, with a focus on employment and wages, construction, real estate, consumer spending, and tourism. In this role, he networks with businesses in the Bank’s six-state region and gives frequent speeches on economic conditions. Follow him on Twitter @RonWirtz.
