Revenue Commissioner Reagan Farr is quoted by Tom Humphrey today as saying that Gov. Phil Bredesen’s administration is “very supportive” of the proposal in the amended version.

He’s talking about a tax increase on coal. With some very uncomplicated ciphering, that translates to a bigger electric bill for you and me. Energy drives the engine of Tennesseans and this nation. According to TVA, there are eleven fossil plants in Tennessee that generate about 60 percent of the electricity TVA produces for its customers.

Customers? Yes, again, that’s me and you.

Politicians love bogeymen. And courtesy of Al Gore, coal is a big bogeyman. So the politicians see an opening to tax coal.

Increasing the price of energy, that’s electricity in this case, has a domino effect. It affects the decision of a major plant or industry contemplating locating here, or expanding. It affects those on fixed incomes who need to heat or cool their homes. It affects the price of goods relative to the cost of production.

While saying that they’re going to do some good enviro-deeds with all this cash might make a nice photo-op or headline, it doesn’t help Tennesseans get the bills paid.

If they want to eliminate or discourage the use or mining of coal, then so be it. I would like to see as much effort put into pushing for nuclear energy as we see beating up on fossil fuels. But crushing consumers with such ill-conceived ideas without the benefit of a consumer option is really not a productive direction for our legislature.

This bill passed the sub-committee. It’s next appearance will be in the Senate Finance Committee. Tom Humphrey at the Knox News Sentinel says that Sen. Jackson(D) is optimistic about its passage. I encourage you to contact the members of the Senate Finance Committee. Here’s the link to the Legislature. Here are the members of the Committee:

•Randy McNally, Chair
•Douglas Henry, Vice-Chair
•Tim Burchett, Secretary
Diane Black, Raymond Finney, Joe Haynes, Rosalind Kurita, Jim Kyle, Mark Norris, Bo Watson and John Wilder 


From Mr. Humphrey this morning:

A Senate subcommittee approved Tuesday a substantial increase in Tennessee’s tax on coal, with half the revenue earmarked for reclaiming abandoned strip mines.

and this:

The state coal tax is currently set at 20 cents per ton and has not been increased since 1984.
As introduced, the bill would have set the tax at 4.5 percent of gross value, which Jackson said is the same rate charged in neighboring Kentucky. Members of the Senate Tax Subcommittee suggested the levy was too high at an earlier meeting and presented an amendment Tuesday that calls for a two-step increase to 3 percent.
As approved by the committee, the tax would increase to 1 percent of gross value on Jan. 1, 2009, then to 3 percent on July 1, 2010.

Will a tax increase on coal…

Leave you looking like this?

And just in case you’re interested, here’s some info from TVA:

The coal-fired generating facilities of TVA’s Fossil Power Group have 15,075 megawatts of capacity. They have been the backbone of the power system since the 1950s, when TVA first began using coal to make electricity for the Tennessee Valley.  The eleven fossil plants generate about 60 percent of the electricity TVA produces for its customers.
TVA’s fossil system also includes 83 generators powered by combustion turbines with a total capacity of 6,003 megawatts. These generators can be quickly started and are vital for meeting peak electricity demands.  

End of Session UPDATE: Thankfully, this legislation didn’t make it out of committee.  Prepare for next year!