Aug. 2, 2009
Legislation Offers Users Lowest-Cost Approach
Albuquerque: As climate-change legislation moves to the Senate, public debate around the issue has risen to a new level, with both supporters and opponents sharing opinions on what it ultimately will mean to Americans. Robust public discussion is appropriate. This is one of the most important issues our nation and the world face.
While discussion is healthy, most of the debate on the issue has missed a key point — carbon caps and greenhouse gas emission controls will happen. The question is whether we achieve our environmental goal through legislation at the lowest possible cost or through regulation by the U.S. Environmental Protection Agency without all available consumer protections.
The EPA has the authority — and some would say the mandate — to regulate greenhouse gases. But it doesn't have the authority to do it at the lowest possible cost to consumers. Only Congress can ensure that all the cost-containment opportunities are included in greenhouse-gas regulation. That is why we need Congress to pass climate change legislation.
As stewards of New Mexico's energy future, PNM Resources and its subsidiary, PNM, have been long-time supporters of federal climate change legislation. From a business perspective, we support federal legislation because if done properly it can provide our customers with effective cost controls and our industry with some needed certainty for long-range planning. From our perspective as citizens of this state and country, we support federal legislation because it is the right thing to do for our environment, our economy and our national security.
The bill that passed the House is not perfect, but it's a very important start. We didn't want to see a bill that gets 90 percent of it right fail; otherwise, climate legislation would likely not be enacted for at least another year or more. The EPA has already begun the regulatory process, and legislative delay would leave it no choice but to advance regulation. We now have an unprecedented opportunity to work on the Senate version of the bill to ensure it balances the need for reducing greenhouse gasses with the need to minimize the impact on individuals, families and businesses.
The projected economic impact on consumers will continue to be one of many, frequently discussed topics in this debate. But let's stick to credible information so we have a useful debate. Analysis by the Environmental Protection Agency and the Congressional Budget Office estimate that the average annual cost to an American family will be no greater than $175 in 2020. While there are several studies claiming that climate legislation will cost American families no less than $1,600 per year, these studies do not actually model the House bill. The EPA also concluded that the allowance allocation method used in the House bill provides the lowest possible cost to electric customers.
No single study can truly predict the impact, and the impact will most likely be somewhere in between what is stated above, but with the right cost control mechanisms, legislation can keep the cost as low as possible.
Make no mistake — there is a cost to addressing climate change that we will all bear. But the highest cost would come from ignoring climate change, and the lowest cost will come from sound federal legislation. I think our choice is clear. It's time to take charge of our future and work with our federal legislators on legislation that will address climate change at the lowest possible cost to our consumers. At PNM Resources we remain committed to thoughtful legislation that provides real and measurable environmental results and that lowers the economic consequences for our customers.
PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 497,000 retail customers in New Mexico. The company also sells power on the wholesale market in the West. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information, see the company's Web site at PNM.com.