Will consumers face rising energy prices once smart grid technology is in place and the United States begins to use more renewable energy? During today's OnPoint, David Holt, president of the Consumer Energy Alliance, explains how the energy provisions in the stimulus could affect consumer energy prices. Holt also addresses how a federal renewable electricity standard could affect the cost of energy.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is David Holt, president of the Consumer Energy Alliance. David, thanks for coming on the show.

David Holt: Thanks so much, Monica, thanks for having me.

Monica Trauzzi: David, your organization is focused on the development of a sound energy policy that also maintains stable energy prices for consumers and energy has been a core component of the stimulus. How have you and CEA been involved in the stimulus discussion and does the stimulus, as it reads now, put us on the right track, put the U.S. on the right track in terms of having that clean, affordable, reliable energy?

David Holt: Good question. Monica, there's a lot obviously in the stimulus package. The Consumer Energy Alliance hasn't been engaged with the stimulus discussion. We don't have any requests. There's nothing that we're looking for in terms of a handout, in terms of additional incentives. There's nothing that we've met with members of the Congress saying, hey, you should look at this. We are continuing to look for a balanced playing field. All energy resources need to be considered. We are very encouraged by some of the things we see in the stimulus package. The clean technology incentives that are in the Senate provisions, in particular would help nuclear power generation and nuclear expansion. We're encouraged by that. We're encouraged by some of the energy efficiency things we see in the package. But in terms of real, tangible, near-term benefits one of the things that's not in there is anything for access. Natural gas is an increasingly important component of meeting our energy needs. There's nothing really in this energy bill or in the stimulus package now that would enhance or incentivize additional natural gas production in the country. That's a near-term, real, tangible impact that would help reduce consumer prices now and stabilize consumer prices so we don't have a return to what we saw in 2008, which, frankly, that wound is still very fresh. On that issue, just very quickly, a little discouraged by what we saw yesterday from Secretary Salazar saying that some of the proposals from the Bush administration that were recently put forward ...

Monica Trauzzi: You're talking about offshore drilling?

David Holt: Talking about offshore drilling and he wanted to take a hard look at that and kind of felt that might be Congress's purview. We disagree, respectfully disagree. We thought that the Bush proposal for offshore, the OCS, that looked at the Atlantic that said let's find out what we have in the Atlantic. It's an open question. We don't really know. There's strong suspicion that there's a lot of natural gas in the Atlantic. Let's find out. That's what the Bush proposal asked for. Sorry to hear that Salazar may be backing away from that a little bit and saying that's a congressional decision because we think it's a decision for the Department of Interior.

Monica Trauzzi: But how do you balance President Obama's goals for climate and the environment and then talk about offshore drilling?

David Holt: I think you've got to. It is a very difficult question. We've had a very good, vibrant discussion on energy and the environment. What has been lacking in that discussion a little bit is the discussion on energy and the economy and we've got to balance the economic implication from climate change legislation with protecting the environment, with doing the things that clearly are on the table, that need to happen. Limiting carbon in a hydrocarbon-based economy is going to be a challenge. Clearly, we've all got to recognize that, but we are going to be a hydrocarbon-based economy for decades while we ramp-up alternative energy. And clearly we need to invest in alternative energy. We need to reinvest in energy efficiency. But we've got to recognize that we're a hydrocarbon-based economy and anything that limits carbon in that economy will impact consumers and small businesses and manufacturing in this country and that balance needs to be better addressed, I would say.

Monica Trauzzi: Well, I think the Obama administration would argue that they're focusing on the economy and the energy/enviro puzzle by implementing all these green collar jobs that we're seeing in the stimulus. Do you think that that doesn't provide the right balance?

David Holt: No, I think that's a start. I think that investing in alternative energy, investing in green collar jobs, creating jobs…listen, bottom line, it's about jobs. There are jobs in traditional energy resources that also we need to examine and make sure that we're not risking increased costs on consumers while we're doing that and some of the proposals, you could argue, skirt that line.

Monica Trauzzi: So, talking about cost to consumers, a concern with the Smart Grid, which we're hearing a lot about now, is that consumer prices would rise. I mean how can the U.S. sort of balance those types of efforts with the need maintain low prices? Can both be done or does something have to give?

David Holt: You would hope so. The ultimate goal of the Smart Grid is to improve efficiency. You know, 60 percent of energy is lost in the current grid system and improving efficiency in buildings, in housing codes, as well as improving the grid, is a laudable goal and something that we need to strive for. There is a, I think, $11 billion provision in the House stimulus package for Smart Grid. It is clearly something that Chairman Waxman has a strong desire to pursue. I think we all agree with the concept of the Smart Grid, but when you get into the details of how that grid is implemented, how we go about that, it's a little bit amorphic at this point and we need to kind of drill down on that a little more and understand how we would go about doing so that when the ultimate goal of reaching that Smart Grid, how we get there, and that we don't drive up costs for consumers in the process.

Monica Trauzzi: All right, let's step away from the stimulus and talk about some other legislation because we're expecting a comprehensive energy package at some point this year and Chairman Bingaman has indicated that he has some strong goals for passing a federal RPS. How might having a federal RPS impact prices that consumers see and what are some of the key things that you think need to be addressed in that energy package that sort of punt off of the stimulus?

David Holt: You know, first, a lot of the members of Consumer Energy Alliance are already living in an RPS environment. A lot of states have already implemented their RPS. Some of the concerns with a national RPS is we need a national RPS along the lines of what Chairman Bingaman has proposed in the past. We need to recognize regional concerns. We also need to recognize that there are things in place such as hydropower in the Southeast that aren't currently going to be credited in an RPS in the future. The last major U.S. fiscal crisis, financial crisis we went through, one of the end results of that was the creation of dams and a lot of hydropower in the Southeast. Here we are kind of going full circle, but let's make sure that that is also recognized. Nuclear power, that should be something that should be considered as well. So all these things need to come into a little clearer focus as we move forward with the comprehensive energy package and make sure that we are thinking comprehensively, because frankly we need it all. The country needs at all, jobs would be created, on and on, so hopefully all these things will be considered in both the House and Senate packages.

Monica Trauzzi: And you had mentioned cap and trade before. How might an emissions reductions plan impact the members of CEA?

David Holt: Well, there's concern. There's an economic consequence to capping carbon emissions. I think that's ...

Monica Trauzzi: An economic consequence that not everyone agrees on.

David Holt: Clearly.

Monica Trauzzi: I mean at U.S. Climate Action Partnership they have industry and environmentalists coming together on a plan.

David Holt: Yes, agreed, and more of that needs to occur. I think you need to hear more from the consumer sector. The small business and consumers in this country haven't been that engaged in this debate and they need to get more engaged. It needs to be a thoughtful conversation that includes this massive sector of the economy. And the economic implications, consequences if you will, need to be fully discussed. The American people need to understand that, yes, if you agree we need to do this here is what could happen. Here is a number, here's a dollar figure that it could mean for this sector of the economy. All that should be considered, all that should be discussed, and it's been a partial debate I would argue at this point. Not all these different sectors of the economy have been engaged.

Monica Trauzzi: OK, we'll end it right there. Thanks for coming on the show.

David Holt: Thank you Monica, appreciate it.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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