November 24, 2009
How Will Clean Energy Legislation Affect Electricity Prices?
As debate heats up around the proposals for clean energy legislation in Congress, one of the main points of contention is the amount of money it will cost. More specifically, everyone wants to know how the average American household will be impacted by the respective energy bills in the House (Waxman-Markey’s American Clean Energy and Security Act) and the Senate (Kerry-Boxer’s Clean Energy Jobs and American
Power Act). This article will investigate the change in energy prices one can expect from legislation that could be passed within the coming months, and try to sift through the wide discrepancy in figures that are being tossed around. Then some recommendations will be presented as to how energy usage can be reduced, to preempt any anticipated rises in cost.
How much will it cost?
How much more money per year should a typical American household expect to pay if clean energy legislation were to pass? Depending on where one gets their information from, this figure varies hundreds of dollars!
It helps to learn where the information is coming from. Analyzing the House’s proposal, the U.S. Government’s Environmental Protection Agency found that, “the overall impact on the average household, including the benefit of many of the energy efficiency provisions in the legislation, would be 22 to 30 cents per day ($80 to $111 per year).” Meanwhile, the Congressional Budget Office estimated the cost to be about $175 per household. On the other hand, an August report by the conservative Heritage Foundation claims that “a typical family of four will pay, on average, an additional $829 each year for energy-based utility costs” after the passage of Waxman-Markey.
Although it may be difficult to agree on how many more dollars Americans can expect to pay from clean energy legislation, nearly every study concurs on one fact – we can expect energy prices to increase in the future with the passage of a clean energy act. For anyone in the country paying utility bills, from homeowners to property managers to retail owners, this means they can expect to see their electricity prices rise.
So what should we do? Fight legislation?
Hardly. Aside from ecological and health arguments for reducing greenhouse gas emissions and mitigating global climate change, there would be catastrophic impacts on the world’s economy were we to proceed at our current pace of fossil fuel consumption. In fact, most scientists argue that we need to take much more drastic and strict measures at combating climate change than even the more ambitious proposals worldwide are suggesting – meaning many feel that the House and Senate acts would not go far enough in reducing greenhouse gas emissions. Thus, fighting any attempt at curbing greenhouse gas emissions (such as stymieing clean energy legislation or not participating in international climate talks) is near-sighted and irresponsible, because of the enormous toll we would be placing on our future’s environment and economy. The current House and Senate proposals may not be perfect, but they are a step in the right direction – so let’s not let the perfect be the enemy of the good.
A better solution: Energy efficiency!
A better solution: start using less electricity and less energy as we make the shift from fossil fuels to renewable energy. The best way to do this is by reducing energy demand and using energy more efficiently. How does one do that?
A good place to start is with an energy audit of a building, which analyzes the energy usage of a building and recommends measures to improve efficiency. These are often done for free or at a discounted rate by a utility company. Another option is to hire a certified Home Energy Rater, who typically use high-end equipment to thoroughly diagnose a building’s efficiency. It is up to the user to implement the recommend improvements once the audit is complete.
Another recommendation is to have the systems of the building commissioned. Commissioning entails hiring a commissioning agent to come inspect elements of the building – such as the HVAC system, lighting, water heating – and make sure they are all operating at maximum efficiency and as they were intended to do. Then the agent will make the adjustments to correct any deficiencies and have the systems running at optimal performance levels.
For a larger building or commercial space (such as an office or retail store), one can attempt to implement an overhaul in operations and management that will demand less energy use by the individuals occupying the space. There are several programs that exist which provide guidelines for instituting these changes, which include such recommendations as switching to more efficient appliance to informing building occupants about energy-saving techniques.
In any approach, it is important to use the tools and information available and put them to use. Whether this is the latest in IT or simply common sense that should be shared, applying intelligence to our system of energy consumption will reap huge rewards.
HR 2454 or the Waxman-Markey bill, named after its two major supporters Henry A. Waxman and Edward J. Markey of the Energy and Commerce Committee, was passed in the US House of Representatives on June 27. Its major mandate is a cap and trade system though it does have other green practices scattered throughout. There has been a lot of talk recently, because of this bill, of the viability of a cap and trade system in the US. To evaluate the government’s ability to implement this new system we have to first understand it.
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