Problem

Improvement

Significant cost to customers

Cover Actual Emissions: Create an allocation pool that matches 100% of actual emissions from the year that is chosen to start the program. Current versions would provide fewer allocations than utilities and other businesses would need.

Lack of available technology

Develop Technology: Provide funding and allow time for CO₂ capture and sequestration technology to be commercially available.

Allowance allocation formula unfair to coal-reliant states

Provide Customer Relief: Provide free emissions credits (also known as allowances) to local electric distribution companies based on 100% emissions (rather than 50% on sales and 50% on emissions) to provide cost relief to customers. Impose the cap on emissions more gradually in early years.

Customer benefits reduced

Protect Benefits for Customers: All benefits of allocations provided to electric and gas utilities should be used for to help defray the costs to customers, not for energy efficiency programs.

Redistribution of wealth

Prevent Windfalls: Make emissions credits available to those who need them for compliance—no “windfall profits” for companies that do not need emissions credits or for commodities traders.

No cost containment

Contain Costs: Adopt a maximum price (price ceiling) to reduce market volatility in credit trading.

Little impact on global greenhouse gas emissions

Protect International Competitiveness: Require other nations to reduce their CO₂ emissions. Legislation should include “off ramps” if other countries fail to participate.

Some best available generation excluded

Include New Generation: Include power plants under construction and those placed in service after 2005 for allowances. Coal plants built after 2005 contain the latest technology for NOx, SO₂ and mercury emissions. Newer plants could be easiest to convert to capture CO₂ emissions as technology is developed.