The Hancock-Henderson Quill, Inc.
Greetings to everyone in Western Illinois and surround'n territory. I'm a hope'n all you readers has a good air conditioner or at least some way of obtain'n a little relief from all the heat and humidity. Maybe by the time you read this column the weatherman will have rewarded us with some temperature reprieve along with hopefully, some rain.
Senator John Sullivan and The Great Tax Debate
My friends and I gots us together fer some post holiday jaw'n about something strong and foremost on their minds. Heavy like ya might say.
The debate centered around whether Obama-care was a "tax" or a "penalty". The vast majority in this group at this time was Democrats by persuasion and it was painful fer them to think their party would impose a "tax" dure'n these hard economic times. Therefore, the natural conclusion amongst this group was to accept Obama-care as a "penalty" although even that thought hurt them a great deal!
With that discussion be'n settled, by a somewhat overly biased group of local Democrats, the discussion quickly turned to the recently passed bill in both the Illinois House and Senate, referred to as the "Leucadia project" (SB3766 Trotter, D- Chicago).
The Leucadia project is the proposed construction of a synthetic natural gas plant (Leucadia) in the Chicago area. The bill will require residential, commercial, and industrial rate payers to subsidize the construction and operation of this synthetic natural gas plant. It provides that all costs of building the plant or facility are guaranteed recoverable, include'n a profit fer the investors. Those costs and profits are transferred as an expense to rate payers. What a sweet deal! It involves government get'n involved in our free enterprise system which many folk feel is an inefficient scary proposition, at its best! Essentially this project is a high sulfur coal gasification project.
The fellers in our group argued the time'n of this legislation to be illogical. They reasoned the U.S. is in the midst of a boom in natural gas production. The result is prices have lowered to the point that natural gas producers are now push'n to begin export'n to other countries.
They also made the point that currently the price of natural gas is or around $2.25 per mmbtu. It was also felt the price is expected to remain in the range of $2-4 per mmbtu fer the forseeable future. Consequently, the project simply is not needed and would inflate the price of natural gas. One of the local fellers questioned why Illinois would mandate that gas customers purchase synthetic natural gas at an estimated cost of between $ 6-10.85 per mmbtu, when the current market rate is so much cheaper? The bill provides fer a blended cross structure betwixt market gas and synthetic natural gas. A minimum cost is provided on the get-go with typical cost over-runs that minimum might only be a start'n point fer further hikes in our fuel bills.
The point was made by one of the fellers that if'n the Leucadia project is such a great investment, why doesn't Leucadia take the risk and cover the costs of the project themselves.
Why are they insistent on require'n rate payers to take the risks? An interest'n point was made in that with 84% of the project covered, Leucadia was still unable to find investors to cover the remain'n 16% of the project.Those in on this discussion felt investors viewed Leucadia as a poor investment. Kinda like some of those other subsidized "Green" projects that have gone broke on taxpayer money.
The folk in this conversation felt the legislators should of followed the investor's lead and killed off the Leucadia project before hook'n rate payers with above market rates fer natural gas fer the next 30 years.
Manufacturers in Illinois as well as farmers utilize'n natural gas fer grain dry'n, and consumers are being taxed or "penalized" at an unfair economic disadvantage in comparison to other surround'n states. Jobs could be lost and opportunity for growth within our state stymied. Rates for natural gas in Illinois would be nearly doubled compared to what competitors in other nearby states pay.
Some manufacturers in Illinois, as a result of this bill, might see natural gas expenses increase many thousands monthly depend'n on the volume mmbtus used per month. This bill, the fellers felt, will cripple some companies.
The Leucadia project will substantially increase natural gas costs fer all rate payers ( residential, commercial, and industrial) in the Ameren and NICOR territories (downstate and suburbs). Ameren estimates the cost of natural gas to their customers will increase by an additional 21 cents per therm or an approximate increase to consumers of 84% in natural gas rates.
One feller spoke up and said " Illinois has enough problems attract'n industry and keep'n jobs without make'n every business, resident, school, hospital, fertilizer plant, grain elevator, county and township entities, and farmers buy over priced natural gas. Everyone will be locked into this bad deal through a 30- year contract." It's a heck of a compound whammy!
All of the fellers in on the conversation figure they wouldn't be around and kick'n fer another 30 years. Therefore, they felt this rate increase fer them is fer a lifetime.
One of the fellers in on this conversation produced a chart made by experts in predict'n such things, which shows increased cost impacts of the Leucadia project. The chart showed averages in Ameren territory:
Typical Residential User: 800 therms/yr - $170-$192 increase X 30= $5100-$5760
Typical 2500 sq. ft. residential: 1,250 therms/yr -$262-$300 increase X 30= $7860-$9000
Typical Convenience Store: 2,000 therms/yr-$420-$480 increase X 30= $12600-$14400
National Chain Drug Store: 3,000 therms/yr- $630-$720 increase X 30= $18900-$21600
Typical Elementary School: 20,000 therms/yr - $4,200-$4,800 increase X 30 = $126000-$144000
Typical High School : 30,000 therms/yr - $6,300-$7,200 increase X 30 = $189000-$216000
Typical Grain Dryer : 60,000 therms/yr- $12,600-$14,400 increase X 30= $360000-$432000
Golly Gee, the conversation went, with all the increases it don't look good. That's a heap of an increase between $719,000-$842,760, by this chart on an individual basis. Multiply 842,760 by the total residential, schools, government offices, and grain dryers in Western Illinois and you have pulled millions and millions of dollars brought out to our local economy and placed it elsewhere fer the good of others, fer all practical purposes, fatcats, in Chicago. For example, the state is strangle'n our schools by cutt'n out their fund'n then they plan on heap'n additional expenses on top of it. "That does not seem fair or reasonable" one feller spoke up. I sez to him once again, " Life is not fair or we'd die in the order we was born".
One feller asked " Why would any downstate legislator place this burden on his voters?" Another feller spoke up "It was sneaked in as a last minute proposal near the end of the session". "Yes votes were given, in all probability, as a reward to the sponsor of this bill; a legislative man soon to retire, as a kind of gift for years of service and loyalty to the party."
Another feller sez, "Don't those fellers get rewarded enough, already?" Another gent sez, "Maybe the vote was made to create jobs and to save the Illinois coal industry in southern Illinois? But then, what about job loss up north as a result. And why force Western Illinois residents to incure such a large expense when they're suffer'n already. Why harm the next generation of gas users?"
One of the fellers sez, "You can bet your bottom dollar that our local Senator John Sullivan did not vote fer this bill. He was just named Ag legislator of 2012. The Illinois Association of Agricultural Fairs (IAAF), The Illinois Association of Soil and Water Conservation Districts (IASWCD), and Extension Partners all teamed up to honor the Senator. He would not vote fer either a "tax" or a "penalty" such as this that would be so harmful and unpopular in our voter district, and he would not do it in a sneaky last minute way without adequate input and discussion! My vote and support continues with Senator John Sullivan, the rural voters friend and only farmer in the Senate!"
"Hand over your money" his Democrat friends demanded of the gent. "We looked it up and Sullivan voted "yes" for Senate Bill No. 3766, The Leucadia Project.
"Well", the feller sez, "Keep the faith. I'm a bet'n he feels the Governor will veto the bill and politically the unions and coal folk will feel good about his support without penalty to gas users. This gives him strength in the Senate, along with other awards and recognition. "No sir ee", one party loyalist sez, "I'm a stick'n with the Senator and besides, after awhile, what's another tax? It's worth it to me to keep a good man in office". "This is Illinois politics at its best!" another feller sez.
The crowd broke up on that one with not so much as a whimper. "They shouldn't be complain'n no how", one Democrat sez, "because we's still gots it pretty good and Senator Sullivan has helped in that regard by the evidence get'n those recent awards.
As fer me, I just listened intently. I'm a gonna have ta dwell on them their thoughts fer a spell to try'n sipher it all out.
Big numbers, taxes, and politics can confuse a feller, and fog up his brain and think'n power. Maybe, the Senator can provide some critical additional information on these matters when he comes around look'n fer votes fer reelection this fall. Try'n remember to ask Senator Sullivan why he would vote fer such an awful ill conceived illogical bill that's gonna hike our gas rates.
Don't forget to urge Governor Pat Quinn to veto SB3766 Leucadia Project., Phone: 217-782-0244 or 312-814-2121.
Try and make someone feel better this week. If'n ya see's a natural gas user, don't bring up the subject. It occupies too much time! And be careful about bett'n your bottom dollar on anything political. Hope to see ya in church come Sunday morn'n. Keep on Smilen:
Catch ya Later