Monday, March 9, 2009

Energy Costs Take 20% Bite From Average Wallet

/PRNewswire/ -- American families faced the biggest increase in energy expenses on record last year, in large part because of costs for transportation fuels driving global demand.

According to a study released today by the American Coalition for Clean Coal Electricity (ACCCE), for the half of the U.S. families earning $50,000 or less, energy costs consumed 20 percent of after-tax income in 2008. The study also reveals energy costs consumed a quarter of after-tax income when families made $30,000 or less.

"This is our annual household energy cost report card, and this year we would grade 2008 as a D for dangerous," said Joe Lucas, Senior Vice President of Communications for ACCCE. "As our economy is faltering and more and more Americans are finding it hard to make ends meet, adopting policies that help keep energy costs affordable should be a national priority."

Families saw their total energy burden increase by 75 percent between 2001 and 2008. Electricity costs increased less than 38 percent during that same timeframe showing that electricity remains an energy bargain in most parts of the country.

"Primarily because we used lower-cost domestic coal for half our nation's electric generation, electricity costs have increased at less than the inflation rate during the past two decades," Lucas said.

The study notes that gasoline prices retreated from historic highs in July, but they are once again starting to climb, ensuring the total energy cost burden will continue to seriously constrain most people's budgets. Lucas said that this shows the economic peril associated with high reliance on imported energy resources.

"In our focus groups, many Americans say that they feel helpless to reduce energy costs when America is dependent on other countries to meet our energy needs. We can change that. We have domestic fuels like coal available here at home, and we can use those fuels wisely to not only promote energy independence but to also keep energy costs low," said Lucas.

Lucas said that ACCCE supports the expanded use of electricity to fuel transportation energy needs, recognizing that a variety of fuels will be needed to meet the increase in electricity demand as a means of displacing foreign oil.

Lucas also noted that keeping energy costs affordable needed to be a key factor in shaping government policies - especially in designing a federal program to reduce greenhouse gas emissions.

"We support a mandatory program to reduce greenhouse gas emissions," said Lucas. "We just believe that we have to be smart in designing the program to ensure that consumers are not paying a higher than necessary cost of energy."

According to Lucas, the 100 percent auction for emissions allowances being promoted for inclusion in a federal cap-and-trade bill will drive up the cost to consumers.

"Under an auction for emissions credits, you get the very same environmental benefit as you would with an allocation of credits - it is just that the cost to the consumer is higher," said Lucas.

"These auctions really work as a de facto energy tax where the government raises revenue ultimately paid by consumers with the hope of getting that money back at some future date in the form of an increased government service. We say, don't raise the cost of energy on American consumers, if you can keep from it, based upon the promise of repaying that investment somewhere in the future," said Lucas.

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