I am perplexed. Texas news headlines are hyping the phrases “big electric bill” and “tax could raise bills,” misleading ratepayers everywhere and leaving out a big chunk of the whole story.
ERCOT released its “analysis” of the impacts of CO2 legislation on Texas this week and I’m not really sure what it’s an analysis of, except maybe some bizarre world in which the only option available for reducing carbon emissions in Texas in the next five years is switching entirely from coal-fired electricity to natural gas-fired electricity.
The whole story? In its much-publicized study, ERCOT failed to incorporate carbon offsets, energy efficiency or the impact of renewable energy beyond what is already planned, in the current bill before congress.
In fact, in the first paragraph of the paper, ERCOT acknowledges that it has not attempted to determine the equilibrium price of allowances, which is one of the fundamental benefits of using free-market economics to drive innovation and decision making in reducing greenhouse gasses.
To put it simply, what ERCOT is saying is: “There are a host of inexpensive ways to reduce greenhouse gas emissions under the Waxman-Markey bill. We have not analyzed any of those.” Given the statement Commissioner Smitherman, who requested the report, gave the Dallas Morning News, I can understand why ERCOT may have focused on such a narrow portion of the legislation. “I’m more concerned about climate change legislation than I am about climate change,” he said.
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