GREENHOUSE GAS LEGISLATION CHALLENGES

Proposed Greenhouse Gas legislation creates additional uncertainty over the future economic viability of NGS. In 2009, the House of Representatives passed the Waxman-Markey Bill, which would place an economy-wide cap on carbon emissions. The bill contains emission allowances for most electrical utilities that will reduce or delay the cost impact of the legislation for most utilities. Unfortunately, from the definition of eligible utilities, it appears that none of these allowances will be available for the CAP share of NGS.

The eventual cost of carbon emissions controls is unknown. However, the impact of climate change legislation on CAP water rates and the ability to sell the Navajo Surplus to help repay the cost of the CAP and fund Indian water rights settlements could be substantial. For example, if CO2 allowances cost $100 per ton of CO2 emitted, that would increase CAP water rates by about $200 per acre-foot.

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