This is the third in a series of articles about the operations of Dalton Utilities.�On Tuesday of this past week, an article appeared in the Daily Citizen with the title “Barbour — Energy Costs Could Cripple Southern economy.”�The title of this article resulted from a discussion at the Southern Growth Policy Board and was quoting the governor of Mississippi. Recently, I was accurately quoted saying that if the estimates associated with new energy legislation are true (estimating between a $3,000 to $6,000 annual increase per household), and even if you cut these estimates in half to $1,500 per household annually, that would result in an increase of $125 per month on utility bills.�

If you recall my last article, the average residential electrical usage of 1,000 kilowatt hours (kWh) results in a utility cost of $69.79 for Dalton Utilities’ customers — one of the lowest in the nation.�When you evaluate these numbers, you clearly see that the forecast indicates the potential impact of current legislative action to be extremely costly.�I say all of this in an attempt to explain the issues for our customers in a way that it has likely not been explained, and to further illustrate that the cost of utility service is driven much more by issues outside and beyond the control of your local utility.

We will always work to be as efficient and cost-effective at providing our services as possible.�Remember that the computed cost today for your electricity is 6.9 cents per kWh and less than one half of one cent of this total comes from Dalton Utilities’ operations and functions.�

What is driving these issues and how are they influenced?�In my opinion, there are two key issues. First, from a utility perspective, it is easy to legislate or regulate issues that require the utility to charge their consumers the cost of compliance.�This allows politicians to “tax” without taxing and places the burden on utility companies to collect the “tax” while the politicians can continue to claim they are not raising taxes.�However, you need to follow the money.

In the case of carbon taxing, you will arrive at what I consider to be the second issue.�These monies collected through utility legislation and/or regulation can then be used to fund other programs that are non-utility related. In the current national debate, it has been stated that the revenue realized from carbon cap and trading will be utilized to fund national health care.�Is this what you want?�If so, do nothing.�If not, make your voice heard to your federal representatives.�

Dalton Utilities has attempted to be a good citizen and good steward of our environment and natural resources and will continue to do so.�We do, however, question the impact of the current Energy and Commerce bill on the cost of providing electrical and other utility services to consumers in the Southeast.�In our region of the country, there is very little in the way of viable renewable energy resources.�There is little useable wind except on the coast. There is enough solar for small-scale projects but not enough for large-scale, high-capacity projects.� The only really viable renewable asset within this region of the country is biomass which uses plant material, vegetation or agricultural waste (primarily trees) as a fuel or energy source.

If we are required to place 15 percent of our energy needs in renewable resources, as the Senate version of the Energy and Commerce legislation indicates, our costs will multiply yet again.�To purchase energy from wind power will require billions of dollars of investment in high-voltage transmission wires to move the energy from the Midwest (where there is wind but little population) to areas of the country of higher population density.�It is also interesting to note that the times of the year when the wind is readily available that electrical use is at its lowest.�Conversely, when wind is least available, the use of electricity is at its highest.

Additionally, the mechanical efficiency of a wind-generating device is extremely low.�This discussion leads me to conclude that while it may be noble to produce our electricity from renewable resources, it is extremely costly.�

You may be aware that our country has significant coal reserves — enough to supply our energy needs for several hundred years, in fact. I ask the question would it not benefit us to put the dollars into developing clean coal technology and would this not overall better serve us and the environment?

This technology is viable.�In fact, the Chinese are currently visiting the United States to research it for deployment in their own country.�It seems to me that we would be better served to do likewise.�It also makes sense to me, from an environmental perspective, to develop new nuclear generation and, hopefully, in the process reinvigorate the manufacturing and production capability to support it domestically.�Nuclear energy is proven to be safe, cost-effective, environmentally friendly and has zero carbon emissions.�If we were to put our resources into more efficient nuclear fuel utilization and the federal government were to honor its commitment to the utility industry to store and manage spent fuel, both our environment and economic efficiency would be well served.

It is not only at the federal level, however, that we must be attentive.�Customers of Dalton Utilities and others who purchase energy produced by coal-fired plants in the Georgia system will be required to fund installation of advanced equipment which reduces emissions from the exhaust of these plants.�This year alone, Dalton Utilities will see a 12 percent increase in the energy costs from these plants.��

I write about these issues in hopes that it will motivate the customers of Dalton Utilities to read and study them and recognize that on a local basis, our only power to really influence these costs is at the voting booth.�I hope that we are conscious of the impact of our actions and that before we make decisions we explore all of the impacts.

In future articles, we will discuss other environmental and technological issues, such as “Smart Grid” and demand-side electrical management, along with similar issues that affect our other business sectors.�

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Don Cope is president and CEO of Dalton Utilities