Kerry Looking to Strike Deal With Utilities on Carbon Emissions Cap


Senate Democrats are searching for a way to entice the utility sector to sign on to an industrywide emissions cap in a final bid to salvage President Obama’s goal of pricing carbon this year.

Sen. John Kerry (D-Mass.) told reporters yesterday that conversations between Democrats and utilities are ongoing and that he remained optimistic that they could strike a deal. Convincing the electric power industry to back a scaled-down carbon cap as part of a utility-only proposal is widely seen as the Senate’s best shot at directly limiting greenhouse gas emissions this year.

“I think one could work out some formula that appeals to industry,” said Kerry, who is the co-author of a sweeping cap-and-trade bill that prices carbon emissions across multiple sectors of the economy, including utilities.

“I think there’s something hopefully we’ll be able to do that moves in the right direction,” Kerry said of efforts to include carbon-pricing language in the broad energy and climate package Democrats hope to bring to the floor in the coming weeks. “I can’t tell you what it is yet.”

Kerry and other senators are hoping to convince Senate Majority Leader Harry Reid (D-Nev.) to include a carbon pricing mechanism in the final energy package that Reid is planning to send to the floor this month. Kerry has been working with Sens. Joe Lieberman (I-Conn.) and Olympia Snowe (R-Maine) on climate language to be added to an energy bill, according to a Senate aide familiar with the discussions. That could take the form of a cap on only electric utilities, the aide said.

“There is a lot of work going on with Harry Reid and his staff, and a lot of intervention with a lot of different offices, and there are a bunch of meetings in the next few days,” Kerry said. “So hopefully, you know, a piece of legislation comes together. I’m very optimistic that we can pass something here that deals with energy and gets us started in the right direction. If it’s the best we can do, it’s the best we can do.”

Reid will meet with Democratic committee leaders this week to review options for the energy package and hopes to announce a decision by the end of this week, Reid spokesman Jim Manley said.

Reid and other top Senate Democrats will meet with President Obama today to discuss the administration’s legislative priorities during the four or five weeks before the August recess. In addition to an energy debate, the president wants the Senate to take up financial regulatory reform, a tax extenders bill, a small business lending package, an arms control agreement and Elena Kagan’s Supreme Court nomination, White House press secretary Robert Gibbs said yesterday.

Utilities have been mixed in their reactions to the power plant-first approach. The Edison Electric Institute — a trade group whose members represent about 70 percent of the U.S. electric power industry — has not taken a public position on a utility-only emission cap. White House officials met last week to discuss energy and climate legislation with Senate staffers and representatives of EEI, according to a White House aide.

Several utilities, including Duke Energy Corp., have said the plan would offer regulatory certainty as companies look to make significant new investments over the next several decades. Still, broad industry buy-in is seen as critical to moving the legislation.

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