Wednesday, April 22, 2009

EPA Estimates Electricity Prices Would Rise by 22% with GHG Regulation

Highlights from Congressional Hearings.
This week the House is holding congressional hearings on potential climate legislation, which includes cap-n-trade. Highlights:

- The EPA estimates that putting a price on carbon would raise electricity prices by 22% and natural gas prices by 17% by 2030. This would be around $150 per household in the US, less than some estimates of $3000 per household.

- CEOs from a utility company (Duke), a chemical company (Dupont) and a senior person from an oil company (Conoco) all testified that the passage of a climate bill would provide guidance and direction to business for investment decisions; i.e., these CEOs want regulation. Congressmen Waxman noted that he has rarely has seen industry and environmentalist agree on need for environmental legislation over his decades in Congress.

- Resistance to any climate bill comes from coal states and other business groups. Disagreement also centers on whether bill will have a large or minor negative impact to economy.

- Many details remain undefined, such as mechanism to allocate allowances, details on renewable portfolios, and time of implementation, especially for certain industry sectors and geographies.

WSJ article
EPA analysis of Waxman bill

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