Would free allocations to electricity LDCs provide “important consumer protection,” as EEI claims?
EEI’s July 6 letter describes the allowances allocated to electricity local distribution companies under the House bill as “important consumer protection.” This ignores two key facts: • The majority of the resources allocated to electric utilities would likely go to increased profits for businesses rather than to protect consumers. The House legislation requires that LDCs use the allowances to benefit all retail ratepayers, which, as EEI notes, “include[s] residential, commercial and industrial customers.” The Congressional Budget Office has pointed out that fewer than 40 percent of the free allocation to LDCs would go to LDCs’ residential customers; more than 60 percent would go to the utilities’ business customers. CBO has also concluded that businesses that receive relief as a fixed rebate on their bill would retain that relief as added profit, rather than pass it on to their own customers in the form of lower prices for their products. • The higher profits that businesses enj