Imagine you are the owner of a portfolio of electricity generation assets in California with a total average annual production of 485,000 MWh. The State legislature has been considering a bill involving the Cap & Trade market and you see the writing on the wall that the bill will likely get passed, which would cause a 500% increase in the cost of carbon dioxide production from the current permit price of $5/ton CO₂-eq. On an average annual production basis, your portfolio consists of 12% solar PV, 5% onshore wind, 9% geothermal, 45% combined cycle gas turbine (CCGT), and 29% conventional gas turbine (CGT) generation. Assume only use-phase emissions.

Given the O&M and fuel cost in the table below, what would be the percent change in annual operating costs of the portfolio if the bill were to pass? Assume the CGT assets to be 33% efficient and the CCGT to be 54% efficient on average; natural gas emits 0.053 tons of CO₂ per MMBTU; and the cost of natural gas is $3.13/MMBTU. The current permit price is included in the fuel cost.

Asset (averaged per type)	O&M ($/MWh)	Fuel ($/MWh)	Total ($/MWh)
CCGT	$16.00	$21.46	$37.46
CGT	$14.00	$35.11	$49.11
Geothermal	$9.00	$0.00	$9.00
Solar PV	$1.50	$0.00	$1.50
Wind	$2.75	$0.00	$2.75