The following is from a Climate Wire story today on Kerry-Lieberman:
Here is how the Kerry-Lieberman bill divides the allowances among key industries through 2029, after which all of them must purchase credits via an auction:
The local distribution companies, or LDCs, that service electric utilities get the largest share of allowances in the early years of the climate program. From 2013 until 2015, the LDCs get 51 percent of the overall climate program’s credits for free. The amount slowly phases down to 35 percent from 2016 to 2025, 32 percent in 2026, 24 percent in 2022, 16.5 percent in 2028 and 8.5 percent in 2029.
This is from a January Forbes magazine article, oddly describing just that approach:
Exelon also invented a scheme . . . giving the utility industry’s portion of free emission allowances to electricity retailers instead of generators. . . . Exelon’s retail subsidiaries, ComEd and Peco, would get allowances, but Exelon’s power generation subsidiary wouldn’t get any. Exelon would still benefit, though indirectly. Competitors with big fossil fuel fleets would have to raise electricity prices to cover the cost of emissions permits. Exelon would benefit from higher power prices without having to buy permits.
As, of course, does this:
Exelon discloses that it expects a revenue boost of $1.1 billion a year if carbon is priced at $15 a ton. Exelon would gain simply because a price on carbon would raise the cost of production for fossil-fuel-powered electricity. Most of that would be passed on to customers, raising the wholesale price of power. Exelon’s revenues would rise, but its costs wouldn’t.
The entire mess is explained in Power Grab.