The Obama administration's proposed clean energy standards will cause electricity generation costs to increase by as much as 30 percent or 2.7 cents per kilowatt-hour nationwide, a report from the United States Energy Information Administration showed.
If Congress were to enact President Barack Obama's proposal, the agency, an independent analytical and statistical agency within the Department of Energy, estimates that aside from the increase in generation costs, household electricity bills will increase by $115 per year in 2025 and by $211 in 2035.
By 2035, total electricity expenditures under the proposed standards will increase by 18 percent. Gross domestic product will also be reduced by $74 billion to $127 billion - from a supposed G.D.P. range of $25,623 billion-$25,710 billion to $25,514 billion-$25,705 billion - annually during that time starting 2035.
The report however noted that with the implementation of the standards, carbon dioxide emissions will decrease by more than 60 percent by 2035. Using an estimate of the social cost of carbon of $100 per ton of carbon dioxide, the benefits of that decline will then reach $100 billion a year in 2035.
Utilities that generated more clean energy credits than needed to meet their own obligations can sell clean energy standard credits to other companies.
Under the plan, nuclear and renewable sources will count toward federal clean energy requirements while natural gas and clean coal with carbon capture and sequestration will get partial credit toward the requirements.
Credits for natural gas fired in a combined cycle will count 50 percent toward compliance while credits from coal with C.C.S. will count toward 90 percent compliance.
Mr. Obama's proposal calls for a clean energy standard 80 percent clean electricity production by 2035 - with an initial share of 44.8 percent in 2013 - and focuses on generating much of America's energy from renewable sources, nuclear, natural gas, and coal with carbon capture and sequestration, with the aim to phase out much of the country's dirty coal plants over the next 25 years.
House committee on science, space and technology Ralph Hall, Republican of Texas cautioned people to be wary of the Obama administration's energy plans as they could have deep economic impacts.
"This report - prepared by independent government experts - makes clear that the C.E.S. amounts to an expensive new electricity tax on the American people. With an anemic economy and unemployment stuck above nine percent, it is very troubling that the President continues to pursue an energy policy that would add billions to Americans' energy bills," he said in a statement.
The draft of the proposed legislation is currently being prepared and will be deliberated upon by the Senate on November.
