EPA’s Estimates H.R. 2545 will Increase Electricity Rates by 300%
October 14, 2011 Leave a comment
Texans will pay a price for cap and trade
Copyright 2009 Houston Chonicle
Published 05:30 a.m., Sunday, July 5, 2009
The proposed climate change legislation, intended to reduce carbon dioxide emissions over the next 40 years, will substantially raise electricity bills. An analysis recently released by ERCOT, the electric grid operator for most of Texas, joins other reports from around the country that project significant job losses and dramatic increases in the cost of electricity if this legislation is enacted.
About 50 percent of all electric generation in America comes from burning coal and about 20 percent comes from natural gas. And, even though Texas has more wind generation than any other state (and all but a handful of other countries), we still burn fossil fuels to generate the vast majority of our electricity.
What is the justification put forward by the bill’s proponents, including President Barack Obama, for destroying jobs and dramatically increasing your electric bill? An attempt, based upon computer models with no guarantee of success, to prevent the Earth’s temperature from rising a couple degrees by the year 2100. (In fact, one study projects that at best this proposed legislation reduces the already projected rise in temperatures by only 9/100ths of one degree in 2050.)
This is almost the equivalent of eating only tofu and water for the rest of your life in order to lose a pound or two. It’s no wonder that the director of the Texas Bureau of Economic Geology called a recent finding by the Environmental Protection Agency that carbon dioxide is a pollutant “absurd.” And, while it is certainly hot now, does anyone in Washington know that back on May 17, in Amarillo, the temperature was 43 degrees — close to the record low set back in 1945?
U.S. Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., have drafted a bill — H.R. 2545, entitled the “American Clean Energy and Security Act of 2009” — that is intended to reduce CO2 emissions 3 percent below 2005 levels by 2012, and increasing thereafter to reductions of 83 percent below 2005 levels by 2050.
This bill, recently passed by the U.S. House of Representatives, was posted for discussion on April 1, but formally introduced only after six weeks of back room wheeling and dealing and substantial arm twisting of opposed members. H.R. 2545 has emission reduction targets that are more aggressive than those found in the Lieberman-Warner bill (S. 2191) that was briefly debated in the last session of Congress. Many reports have concluded that Lieberman-Warner would cause massive job losses in many parts of the country and result in large increases in the price of electricity.
For example, EPA’s analysis of this bill estimated the possibility, under certain circumstances, of an almost 300 percent increase in electricity rates and trillions in lost productivity by 2050. EPA also highlighted the fact that those areas of the country with: 1) long driving distances; 2) large demands for residential air conditioning; and 3) an electric generation portfolio heavily reliant upon fossil fuel, would be negatively affected the most. That pretty much describes Texas — 835 miles from one end of the state to the other, really hot summers and more than 80 percent of our electricity comes from burning fossil fuels. We are the state that will suffer the most under this proposed climate change legislation.
An analysis by the National Association of Manufacturers found that job losses in Texas would be from 250,000 to 330,000 in 2030, and that electricity prices would increase between 100 and 145 percent.
Another report, by the Western Business Roundtable, looked at the economic destruction likely to be caused by climate change legislation and found that five Western states would lose more than 600,000 jobs and suffer $220 billion in economic loss, all in an attempt to produce a future temperature benefit in the year 2100 of a fraction of one degree Celsius.
A third study recently found that more than 95 percent of the cost of proposed climate change legislation would be paid for by electric consumers living outside of the Pacific coast and New England. In other words, those of us living in “fly-over country” will pay almost the entire costs of climate change legislation. It’s no wonder that the sponsors of this proposed legislation, who are from California and Massachusetts, think this is good legislation — their constituents won’t have to pay for it, but those of us living between the coasts will.
ERCOT’s recent report tells the story. In order to meet the emission reduction goals in the Waxman-Markey legislation, carbon allowance costs must rise to about $50 per ton (this is consistent with a recent study done by the MIT Joint Program on the Science and Policy of Global Change, which projects CO2 prices in 2015 of between $48 and $67 per ton). This level of allowance costs would result in an increase in wholesale power costs in 2013 of approximately $10 billion. That translates into an increase in the average customer’s monthly bill of $27. During a time of economic recession, increasing the electricity bill of the average Texan by almost 25 percent per month is foolishness. (There is one note of good news in the ERCOT study — the 18 gigawatts of wind generation that we are putting in Texas is already reducing carbon emissions and will decrease the cost of climate change legislation for our residents from $10 billion to $7 billion.)
Texans and others living in Middle America must engage in this debate. Waxman and Markey have already passed this bill out of the U.S. House. Call and/or write your senator or representative and tell them how you feel about this legislation that is likely to destroy jobs and increase your electricity bills — all in pursuit of speculative results.
Our Texas leaders have already taken steps to use more renewable energy resources, increase our energy efficiency goals, and clean up the air. We don’t need any help from Washington.
Smitherman is chairman of the Public Utility Commission of Texas.