The Obama administration and a key player in Senate climate negotiations would consider a bill that caps greenhouse gas emissions from just the electric utility sector, which may face better political odds than an effort to cap emissions across the economy.
President Obama will likely discuss setting caps on the utility sector when he meets with senators this week, White House Chief of Staff Rahm Emanuel told the Wall Street Journal on Friday.
"The idea of a 'utilities only' [approach] will also be welcomed," Emanuel said, noting that "a wide range of ideas will be discussed." Obama is scheduled to meet with a bipartisan group of senators Wednesday as Democratic leadership plans its strategy for bringing an energy and climate package to the floor this summer.
Sen. Joe Lieberman (I-Conn.) -- who is co-sponsoring a Senate climate and energy bill with Sen. John Kerry (D-Mass.) -- said he would also consider a power plant-only cap.
"Well, I would say we -- yes, I would like to look at that," Lieberman said yesterday on CNN's "State of the Union" program. The Kerry-Lieberman bill would cap greenhouse gas emissions across multiple sectors of the economy.
A strong energy independence bill must include a cap on carbon emissions, Lieberman added. "But if we can all agree on a compromise proposal, as Rahm Emanuel said, that begins with the utilities sector of our economy pricing carbon in it, I think that's a significant step forward to a better, safer country."
The Kerry-Lieberman bill would begin limiting power plants' emissions starting in 2013, followed in 2016 with restrictions for heavy manufacturing. Transportation emissions would face their own emission caps, but the industry cannot participate in any trading with the other industrial sectors.
Sen. Lindsey Graham (R-S.C.), who helped negotiate the Kerry-Lieberman bill but has since dropped out as a co-sponsor, has indicated that he would support legislation next year that blocks U.S. EPA regulations and caps utilities' emissions.
"What I would suggest is that we come back next year to replace the EPA with a comprehensive approach that looks at pricing carbon on the utility side, exempting heavy energy users because the technology's not there to sequester carbon, and on the transportation side, lower emissions without a cap," Graham said earlier this month. "That is what I will be pushing next year, a utility-only bill" (Greenwire, June 9).
A handful of utility industry officials have also signaled they won't knock down the idea of a power plant-only emissions cap.
Electric utilities emit about a third of U.S. greenhouse gases per year. The industry has been involved for about 15 years in a similar market-based mechanism that has successfully reduced acid rain, and the sector is seeking regulatory certainty as companies look to make significant new investments over the next several decades.
"It's a possibility," Duke Energy Corp. spokesman Tom Williams said earlier this month of the power plant-only approach. "We're still pushing for a comprehensive plan. But we've said before, it if it comes down to that, we'd certainly support it" (Greenwire, June 3).
Edison Electric Institute spokesman Jim Owen said yesterday the trade group has been focused on an economywide climate bill and hasn't fully discussed a utility-only approach. "However, we believe that any utility-only legislation would have to incorporate major consumer protections to attract 60 votes in the Senate," he said.
Sen. Lisa Murkowski (R-Alaska), the ranking member of the Senate Energy and Natural Resources Committee, expressed doubts about a utility-only approach yesterday.
"It still puts you in the world of cap and trade," Murkowski told CNN. "And this is where we just simply have not been able to get to 60.
Instead, Murkowski said, the Senate ought to focus on an approach like the energy bill from Sen. Jeff Bingaman (D-N.M.) that cleared the Energy and Natural Resources Committee 15-8 last year, which creates a national renewable energy standard but doesn't cap on greenhouse gas emissions.
"It's got all the right pieces," Murkowski said. "The only thing it doesn't have is cap and trade. Well, that's how we got to a bipartisan bill. So let's build on something like that."
Lieberman said yesterday the Senate has a "fighting chance" at getting the 60 votes needed to pass a bill that caps carbon dioxide emissions, especially now that Obama is making the bill a priority.
"I'll tell you what my count is in the Senate," Lieberman said. "There are 50 -- in my opinion, there are about 50 senators who want to vote for a strong comprehensive energy bill that puts a price on carbon pollution. There are 30 who are set against it and there are 20 undecided.
"You have got to get to 60 to pass anything in the Senate. We need half of the undecided, and we can do it. And the fact that the president has now made this a priority, and not just in his Oval Office statement last week, but in reaching out during the week on the phone and calling a bipartisan group of us to the White House Wednesday, I think we have got a fighting chance at this," Lieberman added.