Cap and Trade:
What Will It Cost?

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The cost of climate change legislation for American companies and their customers ultimately will depend on the architecture of the legislation that is signed into law and how it is implemented through regulations.

That is why PNM is working hard with our congressional delegation and other partners, including the U.S. Climate Action Partnership and the Edison Electric Institute, to ensure that strong cost-containment provisions are included in climate legislation.

Edison Electric Institute (eei.org)
U.S. Climate Action Partnership (us-cap.org)

Economic analysis of House climate bill

A study by the Congressional Budget Office of the American Clean Energy and Security Act of 2009, a cap-and-trade bill that passed the U.S. House of Representatives in summer 2009 estimated the bill would cost the average American family about $175 per year in 2020.

That figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change

The U.S. Energy Information Administration found that the overall impact on the average household, including the benefit of many of the energy efficiency provisions in the legislation, would be 23 cents per day ($83 per year).

This is consistent with analysis by the EPA, which projects a cost of 22 to 30 cents per day ($80-111 per year). Even under "high-cost" assumptions for new power plants, EIA projects a household cost of 34 cents per day ($124 per year).

At PNM, we are following cost estimates for climate change legislation very carefully to make sure we support legislation that works both environmentally and economically.

While no one study or model can accurately predict what the cost of climate change will be in the future, we can and are working hard to ensure that climate legislation includes cost-containment mechanisms that work to keep costs as low as possible.