CLIMATE:

Midwest power companies pushing Senate for more allocations

A group of 14 Midwestern electric utilities continued its push today for a different direction on global warming legislation, asking the Senate's lead climate negotiators to get a full economic study on their bill for businesses and consumers in coal-dependent states.

The Midwest Climate Coalition -- an ad hoc group that includes MidAmerican Energy Holdings Co., Wisconsin Energy Corp. and Alliant Energy Corp. -- requested the comprehensive economic report from all federal agencies that looks into the costs over the next 20 years from the legislation still being crafted by Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.).

"We want to make sure the Senate does its due diligence before they write the bill," said Zach Hill, a senior manager for federal affairs at Alliant, a Madison, Wis.-based company that serves about 1 million customers in Wisconsin, Iowa and southern Minnesota.

The Midwest Climate Coalition formed in 2008 in response to an internal agreement forged by the Edison Electric Institute on how investor-owned power companies would prefer a global warming bill distribute valuable emission allowances.

EEI urged a 50-50 split in allocations between companies based on their historic emission levels and retail sales -- an approach adopted in the House-passed climate bill (H.R. 2454). But the MCC companies insist the formula should be changed in the Senate to reflect allocations based solely on emissions.

MCC companies have since won support from 14 Senate Democrats who wrote Majority Leader Harry Reid (D-Nev.) last November indicating their vote on the climate bill hinges in part on this issue (E&ENews PM, Nov. 12, 2009). Sen. Carl Levin (D-Mich.), a member of that group, met with Kerry on Friday to discuss the legislation, including allocations.

In their letter, the MCC companies suggested that Kerry, Graham and Lieberman obtain more information about how their bill would affect Midwestern electricity rates and reliability, regional and international competitiveness, unemployment and household income rates and the effect on regional jobs if developing countries like China and India don't adopt their own comparable emission cuts.

During the House debate, the MCC companies complained that lawmakers were using outdated information from before the recession that also didn't go into enough detail on a state-by-state or regional basis.

"Hopefully, they get the message to get through the Midwest you've got to make it fair to us," Hill said.

A Kerry spokeswoman declined comment on the Midwestern utilities' letter. And an EEI official said the group would wait until it sees the Kerry-Graham-Lieberman framework before commenting.

Other members of the MCC are Black Hills Corp., CMS Energy Corp., Detroit Edison Co., Great Plains Energy Inc., MDU Resources Group Inc., Minnesota Power, NiSource Inc., NorthWestern Energy, Oklahoma Gas & Electric Corp., Vectren Corp. and Westar Energy Corp.

Click here for the Midwest Climate Coalition's letter.