Based on the allowance allocation formula in H.R. 2454 (the Waxman-Markey cap and trade bill) for electricity consumers, most states will not have enough allowances to cover their emissions from electricity generation. (Click here for the map detailing the allocations and the shortfall or windfall for each state.)

The shortfall in allowances to most states will lead to higher electricity costs for consumers, the total of which will roughly correlate with the dollar losses noted on the map. For example, Ohio consumers will see electricity costs go up by roughly $642 million, Indiana consumers will be hit with increased costs of $763 million, and Texas electricity consumers will see electricity costs go up by roughly $1 billion. Along with West Virginia ($684 million) and Pennsylvania ($636 million), they are the 5 hardest hit states under the bill.

To make up the shortfall, the states that are 'shorted' on the allocations (i.e., the vast majority of states) will have to seek high-cost, non-CO2 emitting electricity sources, reduce electricity production and consumption, or purchase allowances from the green states, or purchase domestic and international offsets, likely a combination of the three.


Information courtesy of GOP.gov. The map was created based on data from the Energy Information Administration and the Congressional Budget Office ("CBO"). The costs identified are approximate costs to customers in 2012 based upon the CBO's estimate of $15/ton.