Electricity Group Backs Emission Caps

Because the association's members are 'competitive' suppliers, meaning they operate in deregulated markets, some of them view an emissions cap as potentially a way to expand their markets.

Published: 09-Feb-2007

A trade group of electricity suppliers representing about one-third of U.S. power generation is expected to call today for a federal constraint on global-warming emissions.

The group, the Electric Power Supply Association, includes some utilities that generate much of their power from coal, which among the fossil fuels commonly used to generate electricity is the dirtiest in terms of global-warming emissions. Carbon dioxide, the main greenhouse gas, is produced when fossil fuels such as coal, oil and natural gas are burned.

The announcement by the Washington-based trade group marks the latest sign that much of U.S. industry is shifting its position on global-warming policy, concluding it is likely to get hit with a U.S. emissions cap whether it wants one or not and that it behooves it to try to shape any eventual policy.

Within the electricity industry, Duke Energy Corp., the nation's third-biggest coal burner, is among companies that have endorsed a national emissions cap. Duke isn't a member of the Electric Power Supply Association. Duke Chief Executive James Rogers also serves as chairman of the Edison Electric Institute, the utility industry's biggest trade group, which remains opposed to a federal cap.

Even oil giant Exxon Mobil Corp., whose executives have stressed remaining uncertainties in the science behind global-warming concerns, has begun talking about how it would like a U.S. global-warming constraint to be structured, though Exxon hasn't endorsed such a rule.

Members of the Electric Power Supply Association tend to rely on coal less, and natural gas more, than do members of the Edison Electric Institute. Coal produces more carbon dioxide than natural gas for every unit of electricity it generates, so gas-reliant utilities are likely to fare better under a global-warming-emissions cap than coal-reliant utilities are.

Still, even the Electric Power Supply Association's members produce more of their electricity from coal than from gas, says John Shelk, the association's president and chief executive. "We have a lot of coal-based suppliers," he says.

Among them: Atlanta-based Mirant Corp., which according to the company generates 60% of its electricity from coal. "It's in our best interest to find a way collectively to address environmental concerns while also finding ways to produce reliable energy," said Felicia Browder, a Mirant spokeswoman.

The association also includes the unit of oil company ConocoPhillips that sells natural gas and power on the wholesale market. That would appear to make ConocoPhillips unusual among U.S.-based oil companies in endorsing a mandatory global-warming-emissions cap. But a spokesman for ConocoPhillips said that, despite the association's vote, the Houston-based company doesn't support a mandatory emissions constraint. "We're still working on a specific policy," he said.

Mr. Shelk, the electric association's head, said the group voted unanimously to endorse a federal emissions constraint at its board meeting last month. He said the group wants a single national policy to supercede the patchwork of state emission caps emerging in places like California and the Northeast. But the association isn't endorsing any specific piece of legislation.

In addition, because the association's members are "competitive" suppliers, meaning they operate in deregulated markets, some of them view an emissions cap as potentially a way to expand their markets.

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