Wednesday, November 11, 2009 8:20 AM
Electric Companies Want Cost-Controlled Transition
By Beth Sussman, NationalJournal.com
Edison Electric Institute
This association represents shareholder-owned electric companies, which make up about 70 percent of the country's electric power industry.
What They Want
EEI wants climate change legislation to include provisions that will make the transition affordable and reasonable. To that end, EEI pushed to have emissions allowances allocated, not auctioned off. The association's preference was included in House and Senate versions of legislation.
"In particular, we commend the House for taking the critically important step of allocating -- rather than auctioning -- some of the emissions allowances required, which is absolutely essential to helping reduce increases in electricity prices, without jeopardizing any environmental progress," Thomas Kuhn, EEI's president, said in a statement after the House passed its climate change bill in June.
But EEI is still pushing for some additional measures, like cost-containment provisions and altered timetables.
Electricity companies are worried that energy costs could rise higher than anticipated because of the legislation, making some type of cost-containment provision, like a price collar, necessary to minimize the hit of reducing greenhouse gas emissions, said Brian Wolff, EEI's senior vice president of external affairs.
One of the factors that could cause a higher-than-expected price increase is unreasonable timetables for reducing emissions, Wolff said. The House and Senate bills require reductions to begin by 2012, and that is "going to be too soon," Wolff said. EEI suggested in a January document that legislation mandate a reduction of emissions by 80 percent by 2050, shifting the focus to longer-term timetables that would ease the transition.
Deal Breakers
The Senate's version of climate change legislation aims to reduce greenhouse gas emissions 20 percent by 2020 compared to 2005 emissions. EEI calls that reduction too steep given the schedule. The bill passed by the House cut emissions by 17 percent, and President Obama has said he supports a 14 percent reduction.
"The 20 percent is really going to be tough for us to support," Wolff said.
How Much They've Spent
EEI spent about $7.8 million on lobbying this year through September, compared with $5.8 million in the first nine months of 2008, according to lobbying disclosure forms.
EEI's PAC has contributed $286,000 to federal candidates and committees during the 2010 election cycle, according to Federal Election Commission records. Of the money given to candidates, 68 percent has gone to Democrats, according to the Center for Responsive Politics. Recipients have included House Majority Leader Steny Hoyer, D-Md.; House Minority Leader John Boehner, R-Ohio; Rep. Edward Markey, D-Mass.; House Energy and Commerce Chairman Henry Waxman, D-Calif.; and the congressional and senatorial campaign committees for both parties. During the 2008 election cycle, EEI's PAC contributed $615,750 to federal candidates and committees.
The association has spent about $750,000 on an advertising and advocacy campaign, Wolff said.
EEI's total revenue for 2007 was $74.4 million, according to IRS forms.
Key Players
Kuhn and Wolff have led the association's efforts on climate change legislation. EEI has been "very active" in meeting with lawmakers on Capitol Hill, Wolff said. The association launched an advocacy campaign, Smart Climate Policy, to educate electricity consumers about the legislation and is encouraging its members and consumers to contact lawmakers.
EEI is also working with various organizations, from environmental groups to business groups, on the legislation. "It's going to take everybody coming together," Wolff said.
Kuhn has been an executive at EEI since he joined in 1985; he was previously president of the American Nuclear Energy Council. Before Wolff joined EEI this year, he was executive director of the Democratic Congressional Campaign Committee and a political adviser to House Speaker Nancy Pelosi, D-Calif.
Kuhn and Wolff are registered lobbyists, as are 20 other EEI employees.
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