CLIMATE:

Utility-only proposal fails to move the needle on Capitol Hill

With the clock winding down on efforts to pass a climate bill this year, Senate Democrats are still adding pages to their policy playbook.

A number of liberal Democrats -- who so far have been unable to attract enough moderate lawmakers to reach the 60-vote threshold needed to pass a climate bill -- are now begrudgingly considering a scaled-down cap on greenhouse gas emissions that would be imposed only on the utility sector as a long-shot effort to cobble together the needed support.

"It's not my first choice, but it's important that we get started in what we're trying to do," Sen. Joe Lieberman (I-Conn.), who caucuses with Democrats, said yesterday. Lieberman is a co-sponsor of a more comprehensive bill with Sen. John Kerry (D-Mass.) that would cap emissions from the utility, manufacturing and transportation sectors.

Kerry, who has spent months relentlessly trying to round up the necessary votes to pass the economywide legislation, likewise left the door open for the scaled-down utilities-only option. "I will support pricing carbon, which is what I've said from day one is the goal here," he told reporters.

"We're looking at that," Kerry said of the power plant-only proposal. "We're looking at a lot of different ways to figure out how to build 60 votes, which I've always said that's the challenge."

The proposal has -- at least for the moment -- taken center stage in environmental and energy circles after White House chief of staff Rahm Emanuel said Sunday that it was one of several proposals that President Obama plans to bring up when he meets with a select group of bipartisan senators at the White House on Wednesday.

Environment and Public Works Chairwoman Barbara Boxer (D-Calif.), whose own climate legislation stalled soon after she passed it out of committee without a single Republican vote, did not rule out supporting a utilities-only proposal. "I'm open to looking at all different proposals," she said.

Sens. Ben Cardin (D-Md.) and Frank Lautenberg (D-N.J.), both members of Boxer's EPW Committee, offered their conditional support.

"I'm for curbing carbon and if that's a step forward, I'll take it," Lautenberg said. "If that's the final step, I don't think it's quite enough."

"I'd have to evaluate it based on whether it gets the job done," said Cardin. "The utility sector is a huge part of the issue, the way it's crafted it could have a major impact, but I would still like to know the full impact. But my preference is a more comprehensive approach."

While most Democrats were less than enthused about the utility-only idea, few were willing to close the door.

"I think we ought to consider any idea that gets us started with a system that prices carbon," said Sen. Mark Udall (D-Colo.). He added that regardless of whether the utilities-only bill gains traction, he still wants to see a full discussion on both the Kerry-Lieberman bill and the "cap and dividend" proposal from Sens. Maria Cantwell (D-Wash) and Susan Collins (R-Maine.)

"I think both those ideas have real merit and I'd expect them to be fully considered," Udall said.

Sen. Jay Rockefeller (D-W.Va.), likewise, said he would not rule out a power-plant only cap. Still, he cautioned that it would be "pretty rough on West Virginia."

Several other Democrats stopped short of weighing in one way or the other, saying that they were still gathering information about the proposal and that they had plenty of questions about how the bill would be structured.

"I am in favor of a comprehensive climate bill providing that it's done right, providing that it meets certain tests," said Sen. Carl Levin (D-Mich.). "I just don't know enough about an utilities-only bill."

Asked about the proposal, Sen. Claire McCaskill (D-Mo.) said, "Oh lordie, I don't know."

In addition to tomorrow's bipartisan meeting at the White House, the full Democratic caucus will huddle Thursday to continue the energy and climate discussions they had last week.

White House spokesman Bill Burton said tomorrow's meeting will be "one part listening but also one part trying to bridge some differences" between the proposals.

"The president thinks that if we're going to change how we deal with carbon, if we're going to move our energy future in a different direction, then we have to be pretty aggressive in how we do it," Burton said yesterday. "But he's not -- he doesn't think there's just one good idea on this. He wants to listen to some of the other ideas that folks have."

Sen. Byron Dorgan (D-N.D.) told reporters that he expects Majority Leader Harry Reid (D-Nev.) to come to a decision on how to proceed with energy and climate legislation by next week, adding that "the longer it takes to get to the floor, the less chance of getting it done."

Republicans

Even if Democrats are able to rally around the utilities-only option -- something that appears far from certain -- they would still face the difficult prospect of securing at least one, and likely several, Republican votes.

"I don't expect that we will get much Republican support for legislation beyond the energy bill," Dorgan said, referring to the bipartisan bill that cleared the Energy and Natural Resources Committee last year, 15-8. "But we did have Republican support for the energy bill," he added.

Sen. Richard Lugar (R-Ind.) was adamant yesterday that he would not support a cap on greenhouse gas emissions, even for just the utility sector. "No, no, no," Lugar said when asked if he would back the approach. Earlier this month, Lugar introduced an alternative energy bill aimed at reducing greenhouse gas emissions and domestic oil consumption without using the controversial cap-and-trade program.

Still, Democrats have been targeting a number of moderate Republicans -- including Collins and Sens. Olympia Snowe of Maine, Scott Brown of Massachusetts, and George LeMieux of Florida -- in hopes that they may break from their party and provide the crucial votes.

LeMieux said yesterday that he had yet to decide on the latest proposal.

"I'm just listening and learning and talking with a lot of folks," he said. "I think energy independence and alternative energy is one of the most pressing issues facing this country, so I think it is time to deal with it."

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 that blocks U.S. EPA regulations and caps utilities' emissions -- but only next year.

"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."

Off the Hill

The utility-only approach got a lukewarm reception from environmentalists yesterday, who cautioned against a bill that leaves other sectors out of the cap.

"We're willing to consider anything that gets us on the road to reducing carbon emissions by an amount large enough to at least be comparable to other bills," said David Hamilton, director of the Sierra Club's global warming program. Still, he said, "a utility-only system limits both the amount of emissions you're targeting and it's restricting the revenue. It's got plenty of problems, but the details matter."

David Moulton, director of climate policy at the Wilderness Society, said yesterday that an economywide approach is still preferable to a bill that caps only the utility sector.

"It's not a better option, it's a weaker option and therefore in this dysfunctional Senate, it becomes more politically doable, but it's not an answer to our climate woes," Moulton said.

Still, environmentalists say that a cap on the utility sector would be preferable to some of the alternative options being floated, including moving forward with the Energy and Natural Resources Committee bill, or pursuing a slimmed-down bill that includes only provisions to deal with the Gulf of Mexico oil spill.

Utilities, meanwhile, were hesitant to take strong positions on a cap affecting only their sector.

"We really haven't formulated an opinion on a utility-only approach," said Southern Co. spokeswoman Valerie Hendrickson. She said the company was focused on an economywide bill.

Edison Electric Institute spokesman Jim Owen said it is tricky to say whether the trade group would support a sectoral approach until the details are revealed. "We have been concentrating on economywide, so this is a game-changer with so many moving parts in the middle of a very fluid legislative situation overall," he said.

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.

"[O]ur first choice has always been a comprehensive energy/climate bill that deals with all sectors of the economy, but if common ground can only be found in the electric utility sector before other sectors are involved, we could support that -- to move the ball forward where we can," said Duke Energy Corp. spokesman Tom Williams in an e-mail.

Reporter Katherine Ling contributed