Tuesday, October 16, 2007

Power companies lobby to weaken already compromised climate bill

From BNA Daily Environment Report
Oct. 16, 2007

12 Electric Utilities Ask SenatorsFor Price Cap on Carbon Allowances

A group of 12 electric utilities called Generators for Clean Air wrote to Sens. Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.) Oct. 12 asking them to put a price cap on any emissions allowances that would be allocated under climate change legislation.

According to the letter, if technology to reduce greenhouse gas emissions is not readily available, "a safety valve would protect our customers and the economy by ensuring that allowance prices remain stable."

"A safety valve would not be a disincentive to invest in carbon capture and sequestration and other cost-effective measures if it is set at a level that maintains an economic incentive for research, development and deployment of new technologies," the letter said. The letter was signed by signed by Paul Bailey, director of Generators for Clean Air.

Members of the coalition include Allegheny Energy, American Electric Power, DTE Energy, Duke Energy, Edison International, MidAmerican Energy Holdings Co., PNM Resources, PPL Corp., Reliant Energy, Salt River Project, Wisconsin Energy, and Xcel Energy.

The letter comes as the Senate Environment and Public Works Committee, of which Boxer is the chairman and Inhofe the ranking Republican, prepares to consider legislation being introduced this week by committee members Joseph Lieberman (I/D-Conn.) and John Warner (R-Va.). That legislation would reduce greenhouse gas emissions from covered sources by 70 percent by 2050 using emissions trading (149 DEN A-9, 8/3/07 )....

A Lieberman aide responded to the Generators for Clean Air letter, saying, "Yes, we continue to be aware that there are electric utility companies who want a price cap. Just as we continue to be aware that there are environmentalists who want emissions to be cut to 80 percent below 1990 levels from 100 percent of the U.S. economy, with no price cap."

Boxer has stated support for the cost-containment approach in the Lieberman-Warner plan and opposes a safety valve (134 DEN A-3, 7/13/07 ).

Frank O'Donnell, president of Clean Air Watch, responded to the letter, saying, "It's an attempt to weaken a plan that's already a political compromise. It is a hint of the sort of battles to come if and when the Lieberman-Warner plan comes to the Senate floor."

Clean Air Watch released a report in September criticizing the Lieberman-Warner plan as a windfall for utilities because it would give them allowances during the first years when it is in effect, allowances they could sell on the open market. Also, according to O'Donnell, because the plan would not cover the entire economy, it actually would reduce nationwide emissions by about 51 percent by 2050, not 70 percent (192 DEN A-8, 10/4/07 )

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