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AEP CEO: Mandatory Cap on Greenhouse Gas Emissions Not in the Cards Near-Term

American Electric Power (AEP) CEO Michael Morris last Wednesday said that he doesn't believe mandatory caps on greenhouse gas emissions in the U.S. are inevitable, at least in the near term. "I don't think that there's a consensus in the Senate that would take you to that place," he told reporters at a Washington, DC, briefing sponsored by the Energy Daily and BP America.

The AEP chief said the "reason I don't think you'll see a U.S. mandatory cap near term is that I don't believe that the U.S. industry is in support of it and therefore I don't think that you will get the necessary support for it in the Senate at the end of the day."

Morris was asked how AEP would address carbon emissions from its conventional coal-fired fleet if a national greenhouse gas emissions cap is put in place in the U.S. AEP has approximately 27,000 MW of coal-fired generation.

"There really isn't a viable technology to hang on the back of the existing fleets," Morris said. "So what I would expect you would see utilities do across the country is an unfortunate reaction to that kind of a demanding mandatory requirement, which is to say -- pick the number, a 10%, 20% reduction -- you would simply shut 10 or 20% of your generation fleet down to satisfy that requirement. I think that would be unfortunate and wrongheaded thinking."

But he also said that "I don't for a moment believe that there isn't plenty of work going forward in the R&D world on technologies that will handle greenhouse gases as we go forward."

Morris said a mandatory push to cut greenhouse gas emissions "is going to be something that most of manufacturing U.S. will not sit still for. I don't think that you'll see the chemical [sector] sit still for it. I don't think that you'll see the metal melter sit still for it. I don't think that you'll see the mobile source auto sit still for it. So you can't single out the utility business and say, 'well, you all have got this and no one else does.'"

Sens. Pete Domenici (R-NM) and Jeff Bingaman (D-NM) in early February released a white paper titled "Design Elements of a Mandatory Market-Based Greenhouse Gas Regulatory System." Domenici is chairman of the Senate Energy and Natural Resources Committee, while Bingaman is the ranking Democrat on the panel. The white paper posed four basic questions (and 31 clarifying questions) about design elements of a mandatory market-based greenhouse gas regulatory system.

Morris said that AEP, as well as the Edison Electric Institute, plan to comment on the white paper. To download the entire white paper, go to http://energy.senate.gov/public/.

Domenici and Bingaman last Wednesday said that a conference on climate change will take place on April 4. The lawmakers also provided guidelines for submitting responses to the Feb. 2 white paper.

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