July 21, 2010

Senators Ready for Carbon Debate

POWERnews

With only about 13 days remaining before the U.S. Senate’s month-long summer recess is scheduled to begin, concerns are mounting about whether it may be too late to delve into an “energy-only bill,” let alone a “utility-only” carbon-curbing bill.

The New York Times quoted Sen. Tom Carper (D-Del.) as saying that Majority Leader Harry Reid (D-Nev.) on Tuesday told fellow Democratic senators that he is considering an energy bill that doesn’t address utility emissions. Only last week, Reid said he would unveil a four-part utility-only climate bill. The package will likely address the oil spill response, energy efficiency, clean energy production, and efforts to slash greenhouse gases from power plants. The bill was expected as soon as this week, with debate starting next week.

The Times reported this week that a new target for debate has not been set, though Democrats are expected to convene a meeting on Thursday to work out a path to move forward with energy legislation.

Still, Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) as well as Sen. Jeff Bingaman (D-N.M.) are reportedly drafting new energy-climate bills that would cap emissions from utilities and potentially some industrial sources.

Modifying the APA

Sens. Kerry and Lieberman are drafting a new version of their energy-climate bill, the American Power Act (APA), which would cap emissions from utilities and a limited group of industrial sources. According to an early draft of the modified bill, utilities would be required to reduce their emissions by 4.75% by 2013; 17% by 2020; 42% by 2030; and 83% by 2050, with reductions measured from 2005 emission levels.

The bill supports commercial deployment of carbon capture and storage (CCS) technologies, and it prevents the Environmental Protection Agency (EPA) from regulating greenhouse gases (GHG) as pollutants. It would also block the EPA from setting New Source Performance Standards for utilities covered under the cap based on their GHG emissions.

But Sen. Kerry remarked on Tuesday after a meeting with power utilities that in the “irony of ironies,” the power industry prefers a draft plan of the APA that he and Lieberman released in May. “They believe the allocations and the structure we created [in the original plan] really meets their needs,” Kerry said. “Whether we can replicate that now in terms of what we’re doing is what we have to go back and try to find out.”

Within the industry, reactions to the modified bill are mixed. Glenn English, chief executive of the National Rural Electric Cooperative Association, said that the legislation could unfairly raise power bills for regions of the country that use coal. Several publicly traded power companies such as Duke Energy are backing the idea of a utility-only bill, saying that such a plan would give them certainty to invest billions of dollars.

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