CNNMoney.com reports that a new proposal before the Senate could mean big news for how energy is bought and sold in the U.S. – and for how much average consumers pay.
Proposed Money Saving Measures
Currently, Congress has made little headway toward passing legislation that would limit production of greenhouse gases, despite various attempts. The new bill offers an alternative to the now familiar cap-and-trade model that could potentially lower energy costs for average Americans.
If successful, the measure would work like this:
- Permits required: Each month, coal, oil and natural gas companies would be required to buy permits to sell their greenhouse gas-emitting products to Americans.
- Money comes back: Naturally, higher costs for energy distributors would mean higher prices for consumers, but the proposed measure would return 75 percent of the companies’ fees to consumers. The remaining 25 percent would apparently go to development of sustainable energy sources.
Supporters have reportedly claimed that this cap-and-dividend program, as it’s called, would provide a much simpler way for energy providers to meet new emissions standards than the oft-discussed cap-and-trade proposals would.
Opponents, on the other hand, fear that removing Wall Street investors from the equation would dry up a significant source of revenue that could otherwise be invested in explorations of new technologies.
One of the most easily understandable explanations of the differences between cap-and-trade and cap-and-dividend reportedly comes from an analyst of the energy sector, who noted that this proposed bill would essentially shift money around within the U.S. economy, whereas cap-and-trade could potentially inject new capital.
How Your Energy Bill Could Change
Sources indicate that the rebate part of the bill would likely translate to about $1,100 returned to each household annually. Of course, some of that money would be funneled directly into covering higher energy costs.
But, it seems, as much as 80 percent of the U.S. population would either save money from this proposal or see no change in their expenditures. The other 20 percent, according to CNNMoney.com, would be wealthier consumers who use more energy (in the form of multiple residences, frequent air travel, etc.) and essentially pay for that privilege.
While energy costs are a big part of any budget, these changes shouldn't cause anyone to file bankruptcy.
Because the effects of the bill would vary in each state, you may want to contact your local congressional office for details.