I have never seen such far-reaching legislation with so many nuances and so many major implications for stakeholders advance so quickly within the U.S. Congress. The reason is simple: enforcement of the 2008 Supreme Court ruling that CO2 is criteria pollutant and should be regulated by the EPA would threaten the viability of coal-fired power, our economy, and our society as we know it.
 
The legislative alternative around which consensus is rapidly emerging entails 65 percent allocation and 35 percent auction. The auctioned portion will cost a lot but allows coal-fired generation and life as we know it to continue. All stakeholders would rather deal with the costs as opposed to shuttering existing coal capacity and realizing the hard way how much our lives depend on reliable and affordable electricity. This was also the consensus of CEOs who spoke at Electric Power’s keynote.

We've lived in interesting times, but these times are a gettin' fascinating. The allocation/auction approach implies about a five percent increase in average retail electricity costs in the absence of DSM or price elasticity (i.e. electricity is used more efficiently when carbon costs are reflected in a five percent price increase). So if the legislation passes, life goes on and the value of ProcessLink® heat rate improvement increases by 20 percent ramping up to 50 percent over the next five years. I'm pretty confident it is going to pass. And if the CEOs who spoke at Electric Power’s keynote weren’t confident about that, it isn’t likely that they’d be expressing their consensus at a major electric power trade show.