Climate Mandates In a State of Flux

• Author: Margaret Kriz Hobson
• Position: Free-lance writer and environmental policy expert working in Washington, D.C.
• Pages: 8-8

Page 8 ❧ THE ENVIRONMENTAL FORUM Copyright © 2010, Environmental Law Institute®, Washington, D.C. www.eli.org.

Reprinted by permission from The Environmental Forum®, Sept./Oct. 2010

Climate Mandates

In a State of Flux

America’s electric utilities are strug-

gling to f‌ind a roadmap to navi-

gate the multitude of environmental

mandates coming out of Washington

while they keep their customers’ air

conditioners and computers hum-

ming. Company of‌f‌icials say the na-

tion’s energy infrastructure is aging

and needs to be replaced with clean,

ef‌f‌icient new power plants. ey are

seeking clear regulatory signals to

plan for those costly assets, some of

which they’ll be using for decades to

come. But the federal environmen-

tal mandates on climate change and

other pollutants are in state of f‌lux,

leaving some companies uncertain

on how to plan for the future.

“We have to retire and replace ev-

ery electric generating plant by 2050,”

Duke Energy CEO Jim Rogers says.

“But we have total uncertainty with

respect to what the regulations are

going to be on our coal plants. We

are going to need certainty to make

smart decisions.”

e industry has been caught in

Washington’s legislative and regu-

latory merry-go-round, unable to

catch the gold ring. Last summer,

the electric industry leaders joined

forces in an attempt to clarify the en-

vironmental ground rules by backing

House legislation that would curb

global warming pollution from all

major U.S. sources — electric power

plants, factories, and transportation.

But momentum to pass legislation in

the Senate collapsed after world lead-

ers failed to reach a climate change

agreement at the UN conference in

Copenhagen last December.

roughout the spring, Senate

leaders tried to revive interest in an

economy-wide climate change pack-

age. is summer, in a last gasp ef‌fort

to gain clear environmental ground

rules, Rogers and a handful of other

utility executives lobbied for a scaled-

back climate bill that would impose

carbon restrictions on electricity pro-

viders f‌irst, with other industries to

be added to the plan in future years.

In the end, however, Senate leaders

were unable to rally enough support

for any kind of bill.

Now electric industry of‌f‌icials are

downplaying chances of passing car-

bon legislation this year. “I think [the

possibility] is very, very slim at this

point in time,” Edison Electric Insti-

tute president Tom

Kuhn said in late July

on Platts Energy Week

TV. “It’s too close

to an election and

there’s too much par-

tisanship right now.”

In the absence of

congressional action, the Environ-

mental Protection Agency is churn-

ing out a variety of climate change

regulations under the Clean Air Act.

But the agency faces strong opposi-

tion in the Senate, where a bipartisan

group of lawmakers wants to stop

EPA in its tracks. In early summer,

Senator Lisa Murkowski (R-Alaska)

tried and failed to block the agency’s

f‌inding that global warming pollu-

tion damages human health and the

environment. Now opponents are

rallying around a proposal by Sena-

tor Jay Rockefeller (D-West Virginia)

to impose a two-year moratorium on

EPA’s power to control greenhouse

gas pollution from energy companies

and manufacturers. Insiders say Sen-

ate Majority Leader Harry Reid (D-

Nevada) has promised Rockefeller a

vote on the bill before November.

e utility industry is split on

whether Congress should block EPA

action. American Electric Power

president and CEO Mike Morris

argued that “Rockefeller’s two-year

hiatus as pertains to carbon has some

real legs.” But some utility industry

of‌f‌icials say privately that they’d just

as soon see EPA handle the climate

change issue because they believe

agency action can be delayed indef‌i-

nitely by legal challenges.

Not everyone has given up on

passing a climate bill this year. Sena-

tor John Kerry (D-Massachusetts)

may try to resurrect a climate bill in a

lame-duck session following the elec-

tions. Other supporters suggest that

a climate provision could be slipped

into another bill. In late July, White

House spokesman Robert Gibbs as-

serted that the House global warm-

ing bill could be added to a Senate

energy bill this fall.

But ef‌forts to pass a post-election

climate bill raise red

f‌lags with some utility

industry executives.

David Ratclif‌fe, pres-

ident, chairman, and

CEO of Southern

Co., contends that a

lame-duck Congress

is likely to produce legislation that

the electric industry might f‌ind hard

to swallow. “It’s really fraught with all

kinds of mischief,” he said. “You’d have

folks who are not going to be back in

the Congress perhaps try to marry a

variety of bills that really shouldn’t go

together at all.”

If Democratic leaders were able

to able to push an energy and cli-

mate bill through the Senate, how-

ever, House Democrats would do

everything they could to get a bill

to President Obama’s desk. Environ-

mentalists, liberal lawmakers, and

pro-climate change bill businesses

wouldn’t let an opportunity like that

pass them by.

By Margaret Kriz Hobson

Margaret Kriz Hobson is a free-lance writer

and env ironmental polic y expert working in

Washing ton, D.C . She can be r eached at

krizhobson@gmail.com.

T F B

We are going to need

certainty to make smart

decisions, according to

Duke Energ y’s CEO

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