Cap and Trade and AEP

Did you know that AEP (American Electric Power) uses more coal than any other consumer in the Western Hemisphere? Considering the fact that coal is the most CO2 intensive source of electricity, you would think that AEP would be opposed to Cap and Trade legislation. Think Again!

In September of 2009, the president, chairman and CEO of AEP issued a public letter of support for the American Clean Energy and Security Act. On the surface this would appear to be an excellent PR move, but more importantly than that, it was an excellent financial move on behalf of AEP.

Under President Obama's Cap and Trade proposal, the federal government will establish an infrastructure that will assign carbon credits to existing businesses, factories, corporations etc. A company will be able to trade any unused credits on the carbon stock market and benefit financially. If a company needs additional credits, they will have to purchase these credits on the same market, and therefore be able to exceed or meet their demand for carbon emissions. As absurd as the entire scheme is, it pales in comparison to what the average joe citizen does not know about the infrastructure.

The government quietly withholds from the public one startling fact about the credits, approximately 85% of these credits will be FREE! What does this mean? The free credits will be distributed to existing businesses, such as AEP, therefore, the actual cost of the "free" credits will be transferred to the consumer. In addition to consumers biting the bullet for big business, companies like AEP, will be forced to build new infrastructure, to capture emissions, which in turn will drive the cost of their product (electricity) even higher. The consumer loses on both fronts.

In order to simplify this situation a bit more, consider this. The government is going to "hand out" FREE credits to existing corporations. These same corporations can then trade these credits on a carbon stock market and make even more money. It would be sort of like someone giving you a stock portfolio with 100's of shares in fortune 500 companies, FOR FREE, and then allowing you to turn around and sell those stocks for a profit. Who wouldn't want to participate in a program like that?

Interestingly enough, any new business or up and coming corporations would have to purchase their credits on this phony stock market as well as develop any new mandated infrastructure, making it very difficult for them to move into a competitive market. The companies with the most lobbyist, and largest financial contributions to campaigns will be the companies that benefit from this boondoggle. The federal government in turn will help eliminate their competitors and grant them greater control of their segment of industry. This is commonly called Corporate Fascism!

Finally, allow me to explain a few things about the upcoming rate increases. Most people are opposed to the constant demand for an increase in rates from such entities as AEP. Presently, companies like AEP are permitted to make a slim margin of profit from utility sales. But, under the Cap and Trade program, these companies will be "forced," through legislation, to make changes in infrastructure. They will have to figure out new ways to trap and reduce carbon emissions. When an industry becomes regulated in this manner, the federal and state government, then permits that company to increase rates to pay for these "forced" changes. The only problem is once the rate increases, it never decreases. Thus allowing AEP, or companies like them, to increase the cost of their products. Now, you know why AEP supports these "forced" regulations.

Bottom line, Cap and Trade is exactly what AEP wants. Why? It will make them richer, and it will eliminate the competition. Anyone that knows anything about competition knows that without it the consumer suffers. If this legislation is not stopped, every aspect of our lives will be altered and changed in ways we can only begin to imagine. Cap and Trade is not just another piece of legislation, it is a power move aimed at limiting individual liberty and merging corporations and government.