June 9 (Bloomberg) -- MidAmerican Energy Holdings Co., the utility owner controlled by Warren Buffett’s Berkshire Hathaway Inc., said carbon-emissions trading as proposed under pending U.S. legislation would add $120 a month to an average customer’s power bill.

A so-called cap-and-trade system for reducing carbon emissions would raise power costs without cutting emissions from plants, MidAmerican Chairman David Sokol said today in an interview in Washington.

“It creates a false tax,” said Sokol, whose Omaha-based company owns utilities and power plants in the U.S. West and Midwest. “For the average family, it’s a $120 per-month increase in their electric bill, and nothing of value comes from it.”

The bill’s target, an 83 percent reduction of carbon dioxide emissions by 2050, can be achieved, Sokol said.

Utilities must replace coal-fired and gas-fired power plants or develop commercial technology to strip carbon dioxide from their exhaust, he said.

“That’s where the money should be spent,” Sokol said. “Adding this trading regimen is a duplicative cost.”

MidAmerican would spend $9.3 billion over the next 20 years on physical plant improvements to meet the bill’s carbon-dioxide reduction target, Sokol said. Buying emissions allowances would add another $9 billion of costs, he said. The brunt of the additional costs would be passed on to consumers.

The legislation would require refiners, utilities and manufacturers to acquire carbon dioxide pollution allowances that could be traded on a market as part of an effort to cut emissions 17 percent below 2005 levels by 2020. The House Energy and Commerce Committee approved the bill May 21 and it is awaiting review by other panels.

Some allowances would be given away free to companies and states, who might sell them to finance carbon-dioxide reduction.

To contact the reporters on this story: Jim Polson in New York at jpolson@bloomberg.net; Peter Cook in Washington at 1869 or pcook6@bloomberg.net

Last Updated: June 9, 2009 11:25 EDT