The Climate Bill and Your Bills: Getting Clean Energy at Low Cost

The American Clean Energy and Security Act, now before the Senate, is poised to transform the way America produces and uses energy, and in the face of such major changes, Americans are asking what this new law might cost them. The answer is very little.

I want to be honest with you: shifting to clean energy will entail some costs. But numerous studies have found that the added price per family will be small.

According to the Congressional Budget Office, America can create millions of green jobs and combat global warming for the cost of 48 cents a day per household. That's about $175 a year, or $15 a month.

That's less than most people pay for Netflix, less than going to see two movies a month. And the return on the investment is extraordinary: cleaner skies, fewer asthma attacks, more job opportunities for friends and family, and the knowledge that you are building a sustainable future for your children. All for $15 a month.

Keep in mind that the Congressional Budget Office produces independent research and is not afraid to release challenging numbers. Earlier this year, it said the economic stimulus plan passed by Congress would hurt America in the long run, and it recently reported that health care reform will cost more than the Obama administration says.

The CBO reached its climate conclusions based on numbers, not politics.

And its findings have been corroborated by other sources. The Environmental Protection Agency found that the overall cost of implementing ACES would be even smaller: between $80 and $111 per household per year. That is less than $10 a month.

The bill also ensures that low- and moderate-income households will not be burdened with these minor increases in energy costs. It calls for selling 15 percent of pollution allowances at auction and using that money to provide energy refunds to families who receive food stamps, senior citizens, and people with disabilities.

The Bill Will Save Consumers Money on Utility Bills
The CBO and EPA reports looked at total costs across the economy. Other studies have examined what the ACES bill will do to your utility bills.

Using data from the EPA and the Energy Information Agency, analysts at MJ Bradley (a research firm that works with PG&E and other utilities) found that your electric bill would be an average of just $2 a month higher if the ACES bill passes. You can see their state-by-state breakdown here.

But this data is missing something important: it does not factor in the numerous energy efficiency measures included in the ACES bill that will save Americans money. Indeed, lots of money--approximately $750 per household by 2020 and $3,900 per household by 2030, according to the American Council for an Energy-Efficient Economy.

How can you achieve these savings? Thanks to smart incentives to invest in energy efficiency upgrades, ACES will encourage consumers to quickly cut their energy use by at least 10 percent, resulting in a net reduction in their energy bills. Even bigger savings -- 30 percent or more -- can be made as they replace obsolete appliances and inefficient vehicles with state-of-the-art models.

NRDC analyzed what would happen to utility bills when the ACES efficiency measures are factored in. We found that Americans in nearly every state will save an average of $5.99 a month. Even in the few states where savings compared to business-as-usual are not projected, bills will still be lower under ACES than they were in 2007.

No Changes While the Economy Recovers
In this economy, consumers are monitoring every bill and watching every penny. People are rightly concerned about even small increases in monthly expenses right now. But the ACES bill will not go into effect until 2012.

That means there will be no impact on energy prices while we're in the depths of the recession: zero impact in 2009; zero impact in 2010; zero impact in 2011.

History Shows that Environmental Regs Don't Cause Price Spikes
I know opponents of climate legislation claim that ACES will cause price hikes (see my colleague Laurie Johnson's post examining how cost data has been misrepresented). We have heard these false predictions before. Do you remember back in 1995? Where you stunned to open you utility bill back then? Was there an enormous spike in the cost of powering your home or business?

That was the year when acid rain regulations went into effect and utilities howled that complying with the new pollution rules would send prices through the roof. My guess is you don't remember your bills from back then, because if they changed at all, it was too minimal to notice.

A national climate law is far more sweeping than the acid rain regulations, but I still believe we will not see dramatic changes in our monthly bills. Rather, we will get a cleaner energy future for just $15 a month--the added cost of one extra pizza per household.

This post originally appeared on NRDC's Switchboard blog.

Comments

[entropygal]

Conventional energy is costly because of pollution. Auto emissions, coal, nuclear waste. We pay for it all. Let's total the costs before we compare alternative energy to conventional.

Somehow we only compare the upfront costs when examining solar, wind, fuel cell , etc. Conventional energy is highly subsidized and alt energy should have a fair playing field to compete. Germany is smart and takes on the cost of solar; they are far-sighted.

[research]

Yes, but it's so much easier for us NOW!

Solar has dropped in price, just this year!
rooftop solar is now the cheapest electricity source including financing and taxes, and BEFORE incentives!

2$ per peak watt, 3 cents per KWH. 1.85 per peak watt! retail!
http://www.atensolar.com/14.html
http://www.ecobusinesslinks.com/solar_panels.htm see my profile for more links etc...

[SusanRen]

Ok can someone tell me what a "green job is?" Is our electrical contracting business "green" because we do install solar and wind turbines. BTW those are not cheap the only people that buy those from us have money. So tell me what is a green job?

[research]

building, selling and installing rooftop solar panels.

Same for BioChar.

[plantguy]

Tired of hearing about green jobs which most of them will be short term jobs . What about the people losing their jobs now, thats what we need to look at. Read the whole bill like if you sell your house under this bill you must hire a green energy inspector and your house must be energy efficient or you cannot sell it. More expense!!

[research]

This Cap and Trade bill is a Investment bankers wet dream.

It will create largest new derivatives market, in history.

Just think of how productive those gambling bankers will be.

read it. It's 80% investment Jargon, including derivatives like Credit Default Swaps investment insurance that cause the crash, that TARP funds reimbursed. It rewards the very polluters we claim to be trying to reduce. See my profile for links and proof.

A simple 1$ per ton carbon tax is what we need.

that will raise a about 10-20Billion per year, that should be funneled into gov mass purchase of rooftop 3 cent/KWH solar installations and waste biochar R$D.

Safe clean quiet electricity cheaper, forever.

[BannedNBoston]

The climate bill will raise food prices.
It will raise food prices on US exports causing millions of deaths.
CAP AND TRADE is a wallstreet giveaway.

[alvdh1]

The sky is falling, the sky is falling, run for the hills before BannedNBoston starts passing out cyanide laced Kool Aid. The policy in recent years that caused food prices to sky rocket was the ill advised ethanol program of Bush. Of course, having Chenny as vice president helped drive petroleum based fertilizer costs much higher. BNB, what do ya think is going to happen to food prices when the Earth is scorched from climate change?? The sky is not falling fella.

[Eggsackley]

Cap and Trade would not cost nearly as much if they auctioned off all the permits, instead of giving them away, and used the revenue to give tax deductions to every household. Otherwise, the increased costs per household will end up being a regressive tax, the poorest people will end up paying a greater percentage of their income for energy.

[sc300nc]

don't worry about that, as part of Obama's income redistribution philosophy, the rich will pay for the electricity use of the poor.

[CentralVA]

Have you ever stopped to think that $175 (the Congressional Budget Office estimate) is a lot of money to many people?

Imagine if you were making $10 an hour and were told you were going to have to pay an extra $175 per year. That is almost half of one week's pay. What would you cut back on? Fresh fruits and vegetables? Your child's birthday party? Memorial Day weekend at the beach? Prescription medicines?

Please reflect on how callous and insensitive you sound.

[sc300nc]

Politicians always use that ploy. "it's only $15 a month, it's only a 1/2 % increase in your sales taxes, it's only a 5% increase in your property taxes, it's only a $20 increase in your annual license fees, it's only an extra 50 cents for a movie ticket"...etc etc etc. Add them all up and it's a big number, every year it is more and more.

You know if they predict $175 a year it will be much more than that, it never fails. They sell you on the small price tag, once you take the bait they take you for all that they can.

[jimrs6]

I work with Utilities across the country. Every one that generates or delivers power from coal plants (nearly every one) is currently preparing rate cases (official requests for increasing rates) to cover the significant additional costs that ACES will bring. Rates will increase 70-100% in the northeast. These rate cases will be public docs in each state.

[Photofarm]

The trouble with this story is that it is not really complete, and until congress passes a final bill, no one really knows what the costs will be.

The example you use of the acid rain debate of the 1990's started out very restrictive and prices would have gone up dramatically. Through the legislative process, the law was changed to lower the impact on costs, or string them out over a longer period of time so it wouldn't shock the system.

[Rhetticent]

Acid rain is a very poor analogy, as it affected few areas, and was mainly a localized problem. We also solved some of that problem by shipping the manufacturing jobs to other countries.... never forget the law of unintended consequences.

[guinganbresil]

When Spain pushed Green Jobs it was a major loser - 2.2 jobs lost per green job created.

I know MediaMatters 'debunked' the report... I urge you to READ BOTH the report and MediaMatters - note that the ad hominem attack on the report's author by MediaMatters DOES NOT address the argument of the report. I found the analysis in the report very convincing and supported by specific examples.

http://www.windturbinesyndrome.com/wp-content/uploads/2009/05/alvarez-report-march-2009.pdf

http://mediamatters.org/research/200906260033

When someone says "We read it so you don't have to" they have something to hide.

[CentralVA]

Thanks for these links. They are very informative.

[guinganbresil]

"History Shows that Environmental Regs Don't Cause Price Spikes"

Nuclear power was thought to be "too cheap to meter"... It is suprising that it is still competitive with regulatory burden it is under.

[sheila]

Or, if WE are allowed to generate, own and sell power from our own roofs, as they do in 48 more grown-up countries where Big Enviros aren't Big Energy mouthpieces, we can all MAKE MONEY and stop the Chevron-Industrial Complex.

Yep, Chevron is behind many of the Big Solar Boondoggles being planned to destroy the Mohave. Curiously, NRDC, Wilderness Society, Sierra Club, Nature Conservancy - NOT ONE OF THEM has supported loan funding or feed in tariffs, so that democratic, AFFORDABLE clean power generated within the built environment can become a reality. Quite the opposite, which is horrifying.

Please, don't believe the greenwashing, people. Big Energy IS THE PROBLEM, NOT THE SOLUTION. The DOE proved that we can produce 100% of our electricity needs using thin film on EXISTING ROOFTOPS. So why the rush to slaughter pristine ecosystems for wasteful, poisonous, central station power?

Feed in tariffs and loans are all we need. We will do the rest, and WE will profit from it, not Chevron aka Bright Source.

[jbatch]

Shiela:

We need base load power -- power which underpins the distributed systems on rooftops etc. Concentrating solar is pretty close to being baseload in that it can deliver power for 14 or more hours. It's worth a few acres of Mojave desert to avoid turning the rest of the world into the Mojave.

[sheila]

Spoken as someone totally unfamiliar with the Mojave, CSP or global warming.

CSP wastes BILLIONS of gallons of water a year, drops in production whenever it's HOT OUTSIDE - when power is needed most, and permanently destroys 10 acres/mW plus roads, staging and transmission. Transmission infrastructure is responsible for 80% of the emissions of SF6, one of the absolute worst GHGs in existence (23,900 times as potent as CO2, and was listed as 1 of 6 GHGs the EPA recently announced it would regulate).

The helpful uses of the Mojave - a VERY ALIVE ecosystem - would be to:

1. preserve it as a highly effective carbon-sequestering ecosystem (as effective as temperate forest);

2. study it to learn more about how to survive and thrive in cases of desertification (most drugs and designs are derived from observing the natural world)

3. allow its residents to produce clean, non-deadly power on their roofs and sell it into the grid.

We can simply sub in gas for coal while storage capacity develops, since gas will no longer be wasted on peaker power. 80% drop in GHG emissions. no dead wilderness. democracy. yay.

[research]

Yes! rooftop solar is the CHEAPEST electricity! 3-4 cents per KWH!

1.85 per peak watt! retail!
http://www.atensolar.com/14.html
http://www.ecobusinesslinks.com/solar_panels.htm

Solar peaks at the same time air conditioning peaks!

Solar reduces gird load and maximum required generating standby capacity.

Waste BioChar can supply all the additional energy and fuel we need while solving most of the waste management problem.

[Rhetticent]

Frances, would you stake your cushy Washington Lobby job on the CBO figures? Have you looked at the starting points they were given to generate those numbers? Garbage in, Garbage out. The fact of the matter is that liberals have never met any kind of government they don't like, because they know that government employees are their natural constitutents. It's sufficient for you to see this bill pass with NO environmental impact at all, because it gives the feds control over energy and a new, ever increasing income stream. MORE BUREAUCRACY!!! MORE GOVERNMENT UNION JOBS!!! MORE TAX DOLLARS TO BUY VOTES WITH! It's power and money pure and simple, and the scientists are playing the willing shill for this nonsense.

[martinfrosa]

Goodness Frances, can't you or anybody in the Obama adminstration do a little elementary math?

Millions of green jobs?? For your information, the March 2008 non-farm payroll number was about 137 million. So how many millions will be working in green jobs? Five million? That's about 3.65% of the population and about 1 million higher than the number of teachers we have - are you kidding me? Maybe 2.5 million or 1.8% of the population? Don't make me laugh. And what kind of "green jobs" will those be? The only concrete jobs the administration has mentioned are "weatherstripping" and "insulation installers". Whoo-hoo!

Speaking of pure fantasy, the CBO numbers regarding Cap and Trade fit the bill. Britain's Taxpayer's Union estimates that that country's green energy program has cost each family there about $1,500 per year. The CBO assumes the government takes all the new revenue and returns it to each household in the form of tax credits, rebates, etc. If anyone believes they will actually get $1,500 in cash from the government, they are dreaming.

Cap and tax is the best description of this bill, which the EPA admits will not lower carbon emissions enough to reduce global warming. China and India have said they will not lower their carbon emissions so we will be exporting our jobs to them courtesy of high energy prices.

Nice use of numbers!

[stepshep]

You obviously don't understand a thing you're talking about.

[CentralVA]

Can you explain your objections? Lots of martinfrosa's points made sense to me.

[SonofLiberty1]

So we looked at rooftop Solar...

About $40 to $50, 000.00 BEFORE REBATES...

And that's NOT the new Shingle solar power panels that have been featured on

PBS's "This old house".

Additionally, we in Pennsylvania wil be paying MORE FOR ELECTRICITY in 2010...

So, don't you dare talk to us in PA about PAYING MORE FOR ELECRICITY!

[Overtone]

Future cars can pay for themselves and can catalyze rapid change!

Breakthroughs include the MagGen. These magnetic generators will initially make it possible to cut the cord on a plug-in hybrid so it no longer needs to plug-in. Later, they can replace the batteries in an electric car. Then, the MagGen can run when the car is parked and sell power to the utility. Prototypes are under development.

Next is a Self Powered Internal Combustion Engine - SPICE, which can power a hybrid. It will need no fuel and is another path to ending the need to plug-in. The engine can run when parked.

Both systems can wirelessly transmit and sell power to the local utility.

The SPICE will be powered by hydrinos - which let a barrel of water equal hundreds of barrels of oil.

Scientists and engineers will doubt these technologies are possible until validation by Independent Laboratories, an important step on the agenda.

Until now, car ownership has been an expense. Payments to car owners driving a hybrid with a SPICE, or powered by MagGen, are likely to be substantial.

The cost of many vehicles might be paid for by utilities, as they purchase power. Parked cars each will become decentralized power plants - a rapid, cost-effective path to catalyze reduction of the need for fuel.

Consumers worldwide can generate substantial demand for such vehicles and accelerate the needed change regardless of government failings.

[noneIn2008]

Good deal, don't follow the second law of thermodynamics and power is unlimited. Break the paradigms that limit most engineers.

[heartlandjim]

We need reality - not these kind of pipe dreams to get alternative energy started in the US of A!!!

[Eggsackley]

SPICE isn't that what they used in "Dune"?