Some Utilities Push Congress to Act on Carbon Emissions

By REBECCA SMITH and STEPHEN POWER
Utility executives are stepping up calls for legislation to cap greenhouse-gas emissions, fearing that if Congress doesn't act, the EPA will establish rules that would be costlier and less effective.
The executives' desire for prompt action is colliding with Washington's focus on other issues and growing reluctance to tamper with power-industry costs during a weak economy.

Some executives said last week they think intervention by the Environmental Protection Agency would be doomed because, for the most part, all the agency can do is order firms to install "best available control technology." Most power companies don't think any effective, affordable technology exists to capture and store carbon-dioxide emissions from power plants.
Most power companies prefer so-called cap-and-trade legislation to EPA regulation because the former is expected to give them greater flexibility on how to comply and thus cost them less than EPA regulation, they say.
Still, plenty in the utility sector continue to oppose legislation to cap carbon emissions.
Under cap-and-trade legislation -- which the House has passed but the Senate hasn't vote on yet -- the government would require companies to hold permits to emit greenhouse gases. Over time, the government would issue fewer permits, bringing emissions down gradually while allowing companies to trade the permits among themselves. Companies that find it too expensive to reduce their own emissions could pay other firms to reduce theirs. They could also invest in activities that offset carbon-dioxide emissions, such as planting trees.
The EPA would be "forced to pursue a technology road map that doesn't exist," warned Jim Rogers, chief executive of Duke Energy Corp., Charlotte, N.C., who also has lobbied the Hill repeatedly to pass a bill.
John Rowe, head of Exelon Corp., Chicago, said that EPA regulation would be "more arbitrary, more expensive, and more uncertain for investors and the industry than a reasonable, market-based legislative solution like cap and trade."
The executives said they want legislation -- and soon -- because utilities need to make billions of dollars of investments in coming years and risk bad choices in a legislative void.
Republicans have largely opposed a Senate bill as economically ruinous, and some have indicated that they won't be pressured into voting for a bill, even if the EPA moves forward with regulations on power plants.
"The actions the EPA has taken and its plans to regulate greenhouse gases are a serious concern," said Sen. Saxby Chambliss (R., Ga.). "However, EPA's actions should not scare Congress into passing bad legislation."
An EPA spokeswoman said Friday, "We agree that we need Congress to step in and enact comprehensive and integrated energy reform as quickly as possible."
Even some executives who have opposed bills in the House and Senate say they would rather have legislation than EPA oversight. David Ratcliffe, CEO of Southern Co., Atlanta, said Friday that he would prefer legislation because "the EPA process is not designed to deal with this complex an issue." But, he said, he would still take EPA regulation "over a bad legislative framework."
The Senate has been consumed recently with health-care legislation, and isn't expected to pass a climate bill this year. The Democratic party's moderates -- who tend to wield more influence in the Senate than House -- are moving to assert more influence over the issue.
Many in the power industry still hope that legislation will be passed that is technologically neutral and would embrace any method of reducing carbon-dioxide emissions -- including nuclear power.
Write to Rebecca Smith at rebecca.smith@wsj.com and Stephen Power at stephen.power@wsj.com