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American families have been battered by COVID-19. One-third of households face a challenge in meeting energy needs, according to the Energy Information Administration.
If we want to build back better, we must do what is right for these families and the small businesses that are the backbone of our economy. That starts with keeping costs low for basic needs like food, medicine and energy.
A proposed energy tax as part of the budget reconciliation plan threatens that.
Millions in Arizona rely on natural gas
Nearly 180 million Americans use natural gas in their homes and 5.5 million businesses use natural gas to heat their stores or produce the goods they sell.
Locally, more than 1.25 million households and 365,500 commercial buildings like hospitals, schools and businesses in our state rely on the energy source. Because natural gas prices have remained affordable and stable, nearly two new natural gas users are added every hour in Arizona.
Households that use natural gas for heating, cooking and clothes drying save up to $687 per year compared to homes using electricity for those applications. The affordability of natural gas has led to at least $123 billion in savings for American businesses since 2009.
With all that in mind, it is shocking that a group of U.S. senators have proposed a “methane fee” – or more plainly, an energy tax consumers will have to pay, in the budget resolution making its way through Congress.
This misguided attempt to reduce emissions will have the opposite result by raising prices and dissuading customers from using a lower carbon fuel. Further, this fee lessens the willingness of investors to expend capital for the infrastructure upgrades that natural gas utility companies continuously make to reduce emissions.
There are other ways to reduce emissions
The methane fee proposal has never been the subject of a congressional hearing and therefore has not been appropriately analyzed or debated among lawmakers.
Congress has also not assessed the economic hardship it could impose on lower-income Americans or its actual impact on reducing methane emissions. It would also penalize companies that are currently compliant with the U.S. Environmental Protection Agency’s methane regulations and newer ones coming down the pike.
The methane fee, if enacted, would likely necessitate rate increases for natural gas and electricity customers, including families, small businesses and power generators. In one scenario the industry looked at, such a fee could result in the average customer seeing an approximate increase of 17% in their natural gas bill, or over $100 per year for the average American family.
To be clear, we share the emissions reduction goals of these senators. The natural gas industry has a proven track record of decreasing emissions and a plan to reduce them even further.
Natural gas utilities in Arizona spent 95% more on energy efficiency programs in 2017 compared to 2014. These programs help customers reduce their carbon footprints, helping contribute to emissions from the average natural gas home declining 1.2% per year nationally.
Increasing customer costs is the wrong approach for emissions reduction and penalizes consumers. Now is not the time to place an undue burden on American families and businesses. We’re committed to reducing emissions in ways that preserve energy choice for customers while also keeping costs down.
