Federal carbon cap legislation would be a $20 billion disaster for Texas, according to a new report released by ERCOT. The billions of dollars in added electricity production costs would inevitably be borne by Texas consumers, some of whom already have trouble paying the bills. ERCOT estimates that the typical consumer’s monthly bill would increase by $27 a month, or $324 annually. And this is only a partial estimate of the carbon cap’s total costs.

ERCOT then went on to make recommendations on how to mitigate some of these federally imposed costs by increasing wind energy capacity. It doesn’t necessarily follow, however, that spending billions of more dollars on costly wind projects will leave consumers better off than they are today. The Foundation found in its report on the state of wind energy that combined subsidies, tax breaks, market disruptions, and increase production costs associated with wind energy in Texas could equate to more than $4 billion per year. This more than offsets the estimated carbon cap savings of $3 billion generated by wind power.

Federal carbon legislation would impose one of the most profound, new financial burdens to electricity consumers in Texas. Residential consumers will be faced with higher monthly bills, while business owners will be faced with higher production or overhead costs. There is little doubt that Texas economy would ultimately be worse off under a carbon cap scheme. It is less clear, however, that spending additional billions in taxpayer money on costly wind subsidies will leave consumers better off.

– Chris Robertson