The chief executive officer of Elizabeth City’s electricity supplier acknowledged this week that his recent dire warning about the potential costs of proposed federal “cap-and-trade” legislation didn’t account for offsets that would be available to some residential customers.

Graham Edwards, CEO of ElectriCities, made the concession after published remarks from a speech he gave in Elizabeth City last week sparked a response from U.S. Rep. G.K. Butterfield, D-N.C.

In his speech to the Elizabeth City Rotary Club, Edwards discussed the Waxman-Markey climate change bill that passed the U.S. House this summer. The legislation includes the much-debated “cap-and-trade” mechanism in which total carbon emissions from factories and power plants would be capped, but high-emission facilities would be allowed to buy and trade allowances within the overall cap.

Edwards said the danger with cap-and-trade legislation is that the market cost of allowances could drive up electric costs dramatically, especially for an association such as ElectriCities that is heavily dependent on coal-fired power plants.

Coal-burning plants are widely recognized as a major source of carbon emissions. Cap-and-trade is known as climate change legislation because of scientific evidence linking carbon emissions to a global rise in temperatures.

Edwards told the Rotary Club that ElectriCities’ position on cap and trade is that Congress should pass some kind of climate change legislation but it should be fair to all energy sectors nationwide. The targets should be achievable and affordable and the time-frame needs to be reasonable, he said.

A typical household generates about a ton of emissions per month, Edwards said, and the market price of allowances under cap and trade — while unknown — is expected to be anywhere from $10 per ton of emissions to $100 per ton.

The net effect could be a 20 percent to 55 percent increase in electricity costs within 20 years, he said.

Following the speech, Butterfield sent a letter to The Daily Advance saying he was “disappointed” by Edwards’ assertion about the legislation’s impact on the cost of electricity.

“Studies by the non-partisan Congressional Budget Office found that 40 percent of American households would see little or no cost increase, and that the remaining households would see a maximum increase of 50 cents per day even before discounting the savings achieved from improved energy efficiency,” Butterfield said. “A study by the non-partisan Energy Information Administration resulted in similar findings.”

Asked this week about Butterfield’s response, Edwards acknowledged Congress was planning offsets to benefit some portion of residential customers but he didn’t know the details. He explained his projections concerned only wholesale electric costs.

“We don’t look at the residential or the individual rates,” Edwards said.

ElectriCities, through the N.C. Eastern Municipal Power Agency, is the wholesale supplier of electricity for 32 cities and towns in eastern North Carolina, including Elizabeth City, Edenton and Hertford.

Edwards said cap-and-trade would drive up power costs for ElectriCities because roughly 35 percent of the association’s electric generation is coal-fired and the cost of coal-generated power is going up.

A $20 per ton cost for emissions allowances would mean a 12 percent increase in the cost of providing power to ElectriCities’ members, he said.

ElectriCities doesn’t expect to build additional power plants.

Edwards said he didn’t want to use the word “never” but insisted the NCEMPA has no plans to invest in any new plant construction. Instead, the group’s long-term plan is to buy from the market.

The percentage of NCEMPA’s power that comes from coal-fired generation eventually could shift depending on the market, he said.

Butterfield’s letter states the legislation “features unique compromises between utility companies and environmentalists, between industrial manufacturing and labor unions.” The bill’s supporters include Duke Energy, Environmental Defense Fund, GE, John Deere and United Steelworkers, he said.

The legislation “takes regional differences into account by making unprecedented investment into clean coal technology,” Butterfield said. “This will allow us to maintain the use of this valuable domestic energy source while sequestering the carbon it emits. Further, the bill allocates carbon credits, the currency of this program, for free to coal-fired utilities in the beginning of the program to help ease the transition to clean coal.”