CLIMATE:

Scramble for utility-only bill continues

Environmentalists and utility officials are still hustling to reach an agreement this year on legislation that caps greenhouse gas emissions, despite widespread speculation that Senate Democrats cannot muster the votes for a climate bill this session.

A working group consisting of utility companies and advocates of pricing carbon continues to negotiate behind the scenes on principles of "key elements" that would be part of a climate bill that caps emissions from only the electric power sector, according to a source familiar with the discussions.

The three-page discussion draft is dated July 23 -- the day after Senate Majority Leader Harry Reid (D-Nev.) announced plans to drop emission limits from the energy bill he plans to bring to the floor this week, saying those provisions fell short of the 60 votes needed.

The draft closely mirrors a July 19 draft memo obtained by The Hill from the working group that includes Duke Energy Corp., Exelon Corp., the Natural Resources Defense Council, the Environmental Defense Fund and the Pew Center on Global Climate Change. Both drafts outline agreements on the schedule, distribution of emissions allowances, cost controls and offsets (E&E Daily, July 23).

The most recent draft, however, includes another section that would offer additional financial incentives -- beyond the price of allowances and the gradual phase out of allocations -- if owners of existing coal plants retire them before 2020 or replace or retrofit them with other resources that qualify.

Representatives from groups involved in the talks declined to comment on the negotiations over the utility-only measure. But the draft signals that advocates are holding out hope the Senate could pass a bill pricing carbon this year if utilities and environmentalists can strike a deal.

Sen. John Kerry (D-Mass.), the Democrats' top climate negotiator, has said he still hopes to win the support of industry and Republicans for a bill pricing carbon this year. He has suggested that a lame-duck debate was possible after the November election.

"Harry Reid, today, has committed to giving us that opportunity, that open door, if you will, over the next days, weeks, months, whatever it takes, to find those 60 votes," Kerry said last week. "So the work will continue every single day."

Lawmakers are still hoping to win the backing of the Edison Electric Institute, the utility industry's leading trade group, whose support is seen as critical to passing a utility-only emissions cap.

Brian Wolff, a senior vice president with EEI, said Friday that election-year politics on both sides might make it difficult to pass a bill this fall but said his group is still willing to talk. "If they said, 'Look, we want everybody back to the table,' we would certainly be there in a heartbeat," Wolff said.

Click here to read the utility-only discussion draft.

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