Insiders Cash In, Consumers Pay Under New Energy Bill

Posted on Thu 05/13/2010 by

1


By Ernest Istook

Major players in Washington cheered the latest version of an energy bill, which tries to buy votes with “something for almost everyone.”  But beleaguered consumers will get stuck with skyrocketing bills after others feast on new government benefits.

We can expect any new “green jobs” to be offset by a larger loss of existing jobs, possibly up to 3-million, depending on details of how the bill’s cap-and-trade system is implemented to tax carbon dioxide emissions.

“Climate Plan Aims to Provide Something for Everyone,” headlined Congress Daily about the re-worked legislation from Senators John Kerry (D, MA) and Joe Lieberman (D, CT).  That same phrase was echoed by a multitude of media.

But the “something” for everyday Americans is higher utility bills—another hit for struggling families in a sour economy.

If the massive new bill stalls from its own complexity, Sen. Harry Reid says he’ll pursue a simpler-but-still-costly backup plan:  Dictating that an ever-increasing portion of electric power must be generated from sources other than fossil fuels—a so-called RES “renewable energy standard” which by itself could cost a million jobs as well as higher electric bills averaging $2,400 a year for a typical family.

Just like the Kerry-Lieberman bill, the RES would force higher bills on unwilling and skeptical Americans.

According to Rasmussen Reports, only 18% of voters are willing to pay even $300 a year for cleaner energy or to fight global warming.  And 56% of all voters say they aren’t willing to pay anything more at all in taxes and utility costs.  (19% said they’d pay only $100 more a year.)

Consumers would pay as businesses passed along the new costs created by the bill.  Many benefited groups gathered to attend and support the Kerry-Lieberman announcement, thanks to the potpourri of billions in federal subsidies, incentives and programs.  The New York Times wrote, “The Kerry-Lieberman proposal . . .  provid[es] something for every major energy interest — loan guarantees for nuclear plant operators, incentives for use of natural gas in transportation, exemptions from emissions caps for heavy industry, free pollution permits for utilities and modest carbon dioxide limits for oil refiners.”  The Times identified the Edison Electric Institute, Nuclear Energy Institute, Duke Energy, and FPL Group as being there; stated that written statements of support were expected from oil giants British Petroleum, ConocoPhillips and Royal Dutch Shell; and reported that the bill had bought silence from the American Petroleum Institute and the U.S. Chamber of Commerce.

The Chamber’s public response was timid:  “We thank Senators Kerry and Lieberman, as well as Senator Graham, for their work to constructively engage the business community on these issues.  The Kerry-Lieberman bill is a work in progress.  Few in Congress or the business community have had a chance to review the entire bill.”

For everyday Americans, the bill is nothing to cheer.  Ben Lieberman, senior energy and environment policy analyst at The Heritage Foundation, told Talk Radio News Service that the APA amounts to nothing more than a giant energy tax.  “The only way to reduce these greenhouse gas emissions from fossil fuels is to raise the cost of energy,” he said. “They have to raise costs high enough so that people are forced to use less, that’s how this works.”

But according to handouts from Kerry and Lieberman, “roughly two-thirds of the revenues generated by the new law would be passed back to consumers through energy bill discounts or direct rebates”.   That sounds like a store that jacks up prices then offers a “discount” that still leaves a 33% price hike.

A major backer of the Tea Party movement, FreedomWorks, quickly condemned the measure as “the largest tax hike in history, and would hit the poor and middleclass, who spend a higher proportion of their income on essentials like electricity and fuel, the hardest.”

They added, “Cap and trade will bring sky high energy prices for consumers and a new government slush fund for Washington. A twenty-seven cent “Fuels’ Fee” on every gallon of gasoline included in the bill means not just higher prices at the pump, but higher prices on shipping and food production.  Higher energy costs will put the cost of doing business through the roof and send American jobs overseas at a time of record unemployment.”

As President Obama personally predicted, his own plan will make our electricity rates “skyrocket” as higher costs are passed on to consumers.

TonyfromOz adds …..

Take this link to Consumer costs for electricity.
This is from the Government’s own site, the Energy Information Administration (EIA)
The data was released in January, and is current for end of year 2008, as you might expect with such a huge amount of data.

Click on Residential.
It shows the costs for each State.

Bottom right shows the monthly U.S. average cost for electricity of $103.67 per month which is around $1240 per annum.
If costs are expected to rise to around $2400 PA, then that is an effective doubling of your electricity bill. Take out your most recent electrical bill, and double it. That’s what you’ll be paying.

Any, and I mean any, changes you make in your household usage will be so minor that it will barely even be noticed.
This is for a residential application.

The same percentage rise will also be applied to the other two sectors, Commerce and Industry, eg, where you work, shop, everything you do in your everyday life. As costs rise in those two sectors, then that too, will be passed directly down to consumers, so they get you at home, at work, and where you shop and live your life.

Anything the Government promises you in return will not cover this sort of rise. otherwise why would they do it in the first place.

This has nothing whatsoever to do with the environment.
It’s just about the money.

For two further posts on this same subject, as this legislation is introduced to the House today, see the following two posts, also posted at The Foundry

Window Dressing Cap and Trade Won’t Make the Costs Go Away – By Nicolas Loris

A $9 Million Villa for Al Gore, Sky-High Energy Costs for the Rest of Us – By Mike Brownfield

Ernest Istook contributes posts on public policy issues at The Foundry. He served for 14 years in the House Of Representatives before joining The Heritage Foundation, where he is a Distinguished Fellow.

Read more informative articles at Heritage – The Foundry

About these ads