Prospects aren’t good for enactment of major energy legislation aimed at “greening” America’s power and transportation sectors, and much of the media are portraying it as a win for big business over environmental groups.
That explanation is half right: The energy bill’s problems are largely due to opposition by utility companies, but the lobbying effort on the other side has been equally driven by big business seeking profits.
One particularly controversial provision in the Democrats’ current energy bill would require all utility companies to buy 15 percent of their electricity from renewable sources such as wind and solar, but excluding hydroelectric dams and nuclear.
Similar laws, called renewable portfolio standards (RPS), exist in many states, but not the South, and Southern senators have led the charge against a federal RPS. Many media outlets have pointed out the relevant fact that Southern Co., a huge firm that generates, distributes and sells electricity, has spent millions lobbying against the mandate.
When these same press accounts look for balance, they usually pit these industry objections opposite the arguments of environmentalists. More helpful and revealing would be to contrast the utilities’ anti-regulation arguments with the pro-regulation arguments of the solar and wind industries, which are no mom and pop outfits. Indeed, Goldman Sachs is among the pro-RPS lobbyists looking to cash in on its investments in wind and solar.
Southern Co. owns Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. It has 4.3 million customers and pulled in $1.5 billion in profits in 2006. Last week, The Associated Press reported that Southern Co. spent $7.1 million on lobbying in the first half of the year, “including a high-profile battle against a requirement that would force the company to make power from renewable sources like solar and wind.”
The AP story also pointed out that “John Pemberton, formerly chief of staff to the EPA’s assistant administrator for air and radiation, was among those who lobbied on behalf of the company.” A Dow Jones newswire story this week also referred to the “strong lobbying from some utilities such as Southern Co.” Many other outlets focused on Southern Co.’s lobbying when describing opposition to the bill.
Solar and wind companies on the other side somehow avoid the same sort of media scrutiny. They are not as powerful as the big utilities — which partly explains why they are losing this current battle — but they certainly are not disinterested observers.
The Solar Energy Industries Association (SEIA) has high-priced real estate in downtown D.C. a block from the White House and the Council on Environmental Quality and not far from the Environmental Protection Agency. The company’s home page this week calls on visitors to lobby for solar tax credits in the energy bill.
At a recent press conference, SEIA President Rhone Resch praised the Democrats’ energy bill and its renewable mandates. Resch conceded that his industry’s recent boom “was spurred by the federal tax incentives for both residential and commercial solar in the 2005 energy bill.” Resch said, “We’re looking to get the federal government to expand their support for solar energy.”
Like Southern Co.’s lobbyists, the solar industry’s advocates are turning their past government service into access. Resch worked at the EPA, while his vice president for government affairs, John Stanton, was legislative counsel at the EPA and the deputy attorney general of New Jersey.
Goldman Sachs has also lined up on the “green” side of this debate. Thefirm has invested $1.5 billion in ethanol, wind and solar. In June, the company publicly laid out the five factors that could drive the renewable-fuels industry.
No. 1 was enacting more RPSs. No. 2 was enforcing existing RPSs. Nos. 3, 4 and 5 also depended on government action in the form of carbon dioxide caps. This year, Goldman retains six lobbying firms that lobby Washington on energy issues.
If Congress rejects federal mandates on renewable power, utilities like Southern Co. will have played a central role, but let’s not forget that their true rivals were not tree huggers, but fellow capitalists like Goldman Sachs and the solar energy industry.
Examiner Columnist Timothy P. Carney is senior reporter for the Evans & Novak Political Report. His column appears on Fridays.
