Utilities object to business group's climate stance

29 September 2009

Exelon will not be renewing its membership in the US Chamber of Commerce in protest at the organization's opposition to climate change legislation. The company is the biggest US operator of nuclear power plants and the third energy company to take such a stance.

In June, the US House of Representatives narrowly passed the American Clean Energy and Security Act (ACES). The bill would require the country to cut greenhouse gas emissions by 17% from 2005 levels by 2020, and create a market-based program called "cap-and-trade" in which companies could buy and sell the right to emit carbon dioxide.


Tom Donohue, president and CEO of the US Chamber of Commerce, said shortly afterwards, "Although the US Chamber supports comprehensive legislation to reduce greenhouse gas emissions, we believe that ACES is fundamentally flawed."


He added, "From the outset, the US Chamber conditioned its support of any climate change bill on these fundamental principles: Balancing environmental objectives with the need for economic growth and job creation, promoting technology development and deployment, investing in clean energy, promoting energy efficiency, and addressing climate change as a global challenge. ACES fails every one of these tests."


According to Donohue, "While cap-and-trade might successfully reduce our use of the carbon-based fuel sources that power our economy, it does very little to make up for it and provide the country with the energy we need to grow and thrive."


However, Exelon chairman and CEO John Rowe told the national conference of the American Council for an Energy Efficient Economy: "The carbon-based free lunch is over. But while we can't fix our climate problems for free, the price signal sent through a cap-and-trade system will drive low-carbon investments in the most inexpensive and efficient way possible. Putting a price on carbon is essential because it will force us to do the cheapest things, like energy efficiency, first."


He discussed how Exelon utilities ComEd and PECO plan to spend $290 million per year over the next five years on energy-efficiency and demand response programs. The plan aims to help customers reduce their energy use by more than 3.7 terawatt hours and cut peak load by 388 MWe. Exelon operates 17 nuclear power reactors.


"Inaction on climate is not an option," Rowe said. "If Congress does not act, the [Environmental Protection Agency] will, and the result will be more arbitrary, more expensive, and more uncertain for investors and the industry than a reasonable, market-based legislative solution."


He added, "I am disappointed that Congressional Republicans and business groups can't recognize this reality." Rowe noted, "Because of their stridency against carbon legislation, Exelon has decided not to renew its membership in the US Chamber this year."


Last week, Pacific Gas & Electric (PG&E) and PNM Resources also quit the Chamber of Commerce over its stance against climate and energy legislation, in particular comments made by the organization on the science of climate change.


PG&E, owner of the Diablo Canyon nuclear power plant in California, has said it finds it "dismaying that the Chamber neglects the indisputable fact that a majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored."


PNM owns just over 10% of the Palo Verde nuclear power plant in Arizona. It said, "We believe the science is compelling enough to act sooner rather than later, and we support comprehensive federal legislation to meaningfully reduce greenhouse gas emissions and protect customers against unreasonable cost increases."


David Chavern, chief operating officer of the Chamber of Commerce, told the Wall Street Journal that the companies' departures are unlikely to change the Chamber's position on climate change policy.