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U.S. Chamber Loses Exelon, PNM to Climate Change Differences

October 5, 2009
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The hits just keep on coming for the U.S. Chamber of Commerce as two more of the country's largest utilities -- Exelon Corp. and PNM Resources -- announced plans to drop their memberships over the chamber's opposition to federal climate change legislation. In an effort to prevent more defections by its membership, the U.S. Chamber last week defended and clarified its position on House climate change legislation (HR 2454).

"Sensible" climate change legislation that puts a price on carbon with a focus on energy efficiency should be a top priority for U.S. utility industry leaders, regulators and policymakers," Exelon CEO John W. Rowe told the audience at the American Council for an Energy Efficient Economy's national conference in Chicago.

An Exelon spokeswoman confirmed that the company is pulling out of the U.S. Chamber because of the chamber's "strong opposition" to climate legislation. "We support climate legislation," the spokeswoman added.

Rowe highlighted the need to balance the nation's fragile economic recovery with the need to address climate change and pointed to energy efficiency as a lower-cost way to meet those goals.

"The carbon-based free lunch is over," he told the audience. "But while we can't fix our climate problems for free, the price signal sent through a cap-and-trade system will drive low-carbon investments in the most inexpensive and efficient way possible. Putting a price on carbon is essential because it will force us to do the cheapest things, like energy efficiency, first."

Based in Chicago, Exelon is one of the nation's largest electric utility companies. Through its subsidiaries it distributes electricity to approximately 5.4 million customers in northern Illinois and southeastern Pennsylvania and natural gas to approximately 485,000 customers in the Philadelphia area.

Rowe discussed how Exelon utilities ComEd and PECO plan to spend $290 million per year over the next five years on energy efficiency and demand response programs. He said the plan aims to help customers reduce their energy use by more than 3.7 million MWh and cut peak load by 388 MW. The chief executive said Exelon's energy efficiency programs place the company third among the nation's utilities in terms of customer energy savings.

He noted that to drive additional energy efficiency investment, the nation's response to climate change also must incorporate competition and the power of markets.

"Inaction on climate is not an option," said Rowe. "If Congress does not act, the EPA [Environmental Protection Agency] will, and the result will be more arbitrary, more expensive and more uncertain for investors and the industry than a reasonable, market-based legislative solution."

Under the company's environmental and business strategy, known as Exelon 2020, energy efficiency is a key ingredient of the plan to reduce, offset or displace more than 15 million metric tons of Exelon's greenhouse gas emissions per year by 2020. In April Exelon said it had reduced its greenhouse gas emissions by more than 35% from 2001 to 2008.

Albuquerque-based PNM Resources, which through its subsidiaries has more than 2,700 MW of generation resources and serves electricity to more than 884,000 homes and businesses in New Mexico and Texas, said it also was exiting the chamber due to the group's opposition to federal climate change legislation.

"We strongly disagree with the chamber's position on climate change legislation and particularly reject its recent theatrics calling for a 'Scopes Monkey Trial' to put the science of climate change on trial," PNM said in a statement. "We believe the science is compelling enough to act sooner rather than later, and we support comprehensive federal legislation to meaningfully reduce greenhouse gas emissions and protect customers against unreasonable cost increases."

At PNM Resources, "we see climate change as the most pressing environmental and economic issue of our time. Given that view, and a natural limit on both company time and resources, we have decided that we can be most productive by working with organizations that share our view on the need for thoughtful, reasonable climate change legislation and want to push that agenda forward in Congress," said Don Brown, a spokesman for PNM, New Mexico's largest electricity provider.

The organizations that share PNM's views on climate change include the Edison Electric Institute (EEI) and the U.S. Climate Action Partnership, a group of businesses and environmental organizations of which PNM is a founding member, he noted.

PNM and Exelon joined San Francisco-based Pacific Gas and Electric Co. (PG&E), which pulled out of the U.S. Chamber late last month over what it called "fundamental differences" on climate change (see NGI, Sept. 28).

A strong critic of the Obama administration, the Washington, DC-based Chamber, a major organization for big business, has told Congress that climate change legislation would kill jobs while making little to no difference on global carbon dioxide concentrations.

Defending the group's position, Chamber President Thomas J. Donohue said that some in the "environmental movement claim that, because of our opposition to a specific bill or approach, we must be opposed to 'all' efforts to reduce greenhouse gases, or that we deny the existence of any problem. They are dead wrong.

"We oppose the Waxman-Markey bill because it is neither comprehensive nor international, and it falls short on moving renewable and alternative technologies into the marketplace and enabling our transition to a lower-carbon future," Donohue added. "It would also impose carbon tariffs on goods imported in the United States, a move that would almost certainly spur retaliation from global trading partners."

He added that the chamber -- in public documents, Capitol Hill letters and testimony, and in concrete policy recommendations -- has supported efforts to reduce greenhouse gas emissions in the atmosphere while keeping the economy healthy.

"We have vigorously supported the production and use of renewable and alternative energy. We have repeatedly supported tax incentives and credits, appropriations and stimulus funding to promote the accelerated development of new technologies," he said. "We are leading the fight to clear the regulatory, legal and not-in-my-backyard roadblocks that are currently delaying promising wind, solar, nuclear and other renewable or emissions-free energy projects across the nation."

Donohue said the chamber supports "strong" federal legislation and a binding international agreement to reduce CO2 emissions and address climate change.

"We believe that in order to succeed, any climate change response must include all major CO2 emitting economies, promote new technologies, emphasize efficiency, ensure affordable energy for families and businesses and help create American jobs and return our economy to prosperity. The Congress should carefully deliberate on and enact legislation that meets these goals," he noted.

"We also have called upon the United States to join with other nations to negotiate a new international agreement that sets binding CO2 reduction commitments for each nation, while allowing each to devise its own best path to meeting its target.

"Furthermore, we believe that Congress should set climate change policy through legislation, rather than having the EPA [Environmental Protection Agency] apply existing environmental statutes that were not created to regulate greenhouse gas emissions," Donohue said.

PG&E CEO Peter Darbee pulled no punches in his letter informing the organization that the company was dropping its membership. "We find it dismaying that the chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored."

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