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The Climate It is A-Changin: NecessaryConsumer Protections inClimate legislation
NEUAC June 14, 2010
Marti T. Doneghy
Sr. Legislative RepresentativeGovernment Relations and Advocacy, AARP
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AARP is a nonprofit, nonpartisan membership
organization that helps people 50+ have
independence, choice and control in ways that are
beneficial and affordable to them and society as a
whole. AARP does not endorse candidates for public
office or make contributions to either political
campaigns or candidates. We have staffed offices inall 50 states, the District of Columbia, Puerto Rico,
and the U.S. Virgin Islands.
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AARPs Livable Communities
agenda includes Affordable UtilitiesAARP advocates for policies and
programs to ensure consumers canafford the energy they need to meet
their basic needs
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Solutions to Global Warming Pose
Challenges for Many Consumers
Energy costs are a burden for low and fixed income
consumers.
High energy prices cause consumers to cut back on usage
and other necessary spending.
Energy affordability is linked to health and safety.
Incentives and price signals can increase energy bills
and have negative, even life threatening consequences for
segments of residential consumers
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Older consumers pay a higher percentage
of income for utilities
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Transition to a Low Carbon
Economy At what price?
According to the
EIA, energy
consumption is
increasing by1.07% each year
At this rate
energy demand
will rise by a
full 26% by theyear 2030.
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Energy Costs to Increase
Regardless of climate change legislation, energy costs
will increase for U.S. consumers.
Demand could potentially rise by more than 50% by2030 in the absence of any government action.
Continuing the current trend in energy supply anduse, carbon emissions would rise by 55% by 2030.
Page 10-38 AARP 2009 Policy Book
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H.R. 2454, The American Clean Energy and
Security Act and the Kerry-Lieberman bill
85% of allowances given free to utilities
and other polluters
The percent of allowances given away will
decline over time between 2026 and 2030
when most are auctioned, with the revenuerebated to consumers.
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AARP, NCLC Public Citizen, and more than 40
environment groups on essential consumer
protections for cap and trade billEPW letter, July 22, 2009
The clear preference is to providea greater percentage of allowances
for auction with more of the
revenues used for direct consumerrelief.
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The Carbon Limits and Energy for Americas
Renewal (CLEAR) Act
Cap and Refund Approach
100% auction of allowances - No industry giveaways
75% of proceeds go directly to non-taxable, monthlycash refunds to every legal resident as offset to increased
energy costs.
25% of proceeds fund transition to clean energy
technologies, fuels research, development anddeployment activities (includes worker assistance,
energy efficiency, weatherization and LIHEAP).
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High Energy Costs
Create Incentives to Reduce
Usage-Heat, Cool or Eat.
2008 AARP survey (consumers 45+) found
nearly half (46%) heated or cooled only
certain parts of their homes; 81 percentturned the thermostat up or down.
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Concerns:
LDC Free Give Away of Allowances
Ratepayer benefit under LDC scheme that gives free
allowances is vague. Do regulators need more guidance in
bill?
Does complex market scheme invite speculation, false pricesignals?
Are regional variations overstated?
Cap will affect all economy sectors and increase the cost of
goods and services through out the economy for consumers. AARP also supports an explicit requirement that the value of
any allowances given free to utilities be used to directly
reduce customer bills.
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Challenges:
What is the goal and how can it be achieved at thelowest reasonable cost for consumers?
Consider how the policy impacts specific groups ofconsumers, including low-usage, low income and
older consumers?
Do consumers change their behavior and put their
health at risk? And what about vulnerable
populations?
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We can achieve:
AARP urges Congress to offset increases in
consumer energy costs by returning the
proceeds of a carbon emissions reductionsystem to consumers through a monthly
direct rebate or direct dividend.
AARP has the power to make it better 15
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We Can Achieve:
Who will be at the table when ratepayer
benefitis defined in each of the fifty states
and territories utility commissions
industry -- consumer advocates?
AARP is calling on Congress to create a
Consumer Advocate Office to provide an
independent voice for consumers and
support for intervenor funding.
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We Can Achieve:
A transition to a clean, green world with reduced
greenhouse gas emissions that will protect consumers and
maintain energy affordability for consumers.
Additional assistance to low and fixed income consumers
who pay a disproportionate share of their income on
utilities.
Climate laws and policy that are simple, transparent, and
equitable.
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We Can Achieve:
Reduction of greenhouse gas emissionswhich is crucial for the future of our society
and our planet, but it will certainly come at a
cost.
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Contact Information:
Marti T. DoneghySr. Legislative RepresentativeAARP202 434-3804