ENERGY COSTS
Will climate and energy policy cause energy costs to skyrocket?
No – increasing energy efficiency and the supply of renewable energy will actually be a tremendous stabilizing force for energy costs in this country. Over the last few decades we have seen fossil fuel prices fluctuate wildly – oil, for example, has jumped near $140 a barrel, sending prices at the pump upwards of $4 a gallon for gasoline. Coal prices also spiked, with the benchmark Central Appalachian coal hitting $175 per short ton.
The Congressional Budget Office projects that the climate portion of the ACES bill will cost the average family less than the price of a postage stamp a day in the year 2020, while studies suggest that the energy efficiency provisions of the bill could save U.S. consumers an average of $215 per household in 2020 and $486 in 2030.
The Congressional bills protect against negative consumer impacts. In the House ACES bill, for example, electric utilities are required to use their freely-allocated allowances to protect consumers from electricity price increases. The bill also provides rural electric cooperatives with allowances for energy efficiency, renewable energy, and low-income ratepayer assistance programs. Natural gas companies similarly have to use their allowances for the exclusive benefit of retail ratepayers.
How much will this legislation cost consumers in Tennessee?
Actually – if federal policy includes strong energy efficiency and renewable energy standards in addition to a price on carbon – consumers will SAVE money. New economic analysis from the University of Illinois, Yale University and the University of California shows that by 2020, comprehensive climate and energy policies will increase Tennessee’s real Gross Domestic Product by -$0.3 billion to $0.9 billion more than without legislation and lead to average real household income in Tennessee that is -$129 - $406 higher per year.
Energy efficiency protects consumers by reducing their energy use – and saving them money. Strong energy efficiency provisions lower electricity demand such that prices will go down for all – it’s like offering every American a tax cut.
The American Council for an Energy Efficient Economy (ACEEE) estimates that the House ACES bill’s energy efficiency provisions alone, by 2020, would save consumers in Tennessee an average of $280 per household.
