Household electricity bills could jump an average of $115 per year by 2025 if the U.S. adopts a White House-backed “clean energy standard” forcing power utilities to use more wind and solar, according to a new government analysis.
The Energy Information Administration’s report came at the request of Rep. Ralph Hall, R-Texas, the chairman of the House Science, Space and Technology Committee. It examined the economic effects of a clean energy standard under 18 different scenarios.
President Barack Obama has asked lawmakers to set a clean energy standard requiring power utilities to generate 80 percent of their power from wind, solar and other easily replenished sources by 2035.
The report concluded that wind and biomass would get the biggest boosts under one such renewable energy mandate, as power utilities retire old coal-fired plants and new nuclear generation capacity comes online.
And the EIA found that between 2009 and 2035, carbon dioxide emissions would be cut by more than 50 percent under the policy.
But the decrease would come at a cost. Although electricity prices wouldn’t increase much initially, by 2025, they would be an average 1.5 cents more per kilowatt hour than expected without the policy, a difference of about 16 percent. In 2035, the EIA estimates electricity prices would be about 2.7 cents per kilowatt hour — or 29 percent — higher than they would be without the clean energy standard.
Nationwide, under the policy, household electricity bills could increase by $115 per year in 2025 and by $211 in 2035, according to the report.
Electricity prices in Texas could increase by 42 percent, according to the study. Other potentially hard hit markets include Oklahoma, Tennessee, Kentucky, Colorado, eastern Pennsylvania, New Jersey, Long Island and southern Illinois.
Hall said it’s too high a price to pay. The report shows that a clean energy standard is nothing more than “an expensive new electricity tax on the American people,” he said.
“This is obviously the wrong policy for America,” Hall said. “Now, more than ever, the United States should be pursuing an all-of-the-above energy strategy that lowers prices through development of all energy resources, not raises them through technology mandates.”
Rep. Eddie Bernice Johnson, D-Texas, the panel’s top Democrat, said the findings of the study were built on flawed scenarios designed by Hall and don’t reflect the White House proposal.
“The requested analysis was designed to show a worst-case cost scenario,” Johnson said. Under Hall’s request, Johnson said, the EIA was forced to omit “a number of important factors and sensitivities that would have made for a much more comprehensive and realistic picture of our future energy economy.”
The EIA is expected to release another study of Obama’s proposed clean energy standard next month — but this time, the document is coming at the request of Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M. He sought a broader analysis that would show the market impacts of a variety of clean energy standards that could be passed by Congress.