Some of the largest U.S. electricity companies, including Duke Energy and American Electric Power, are fighting what may be a $100 billion lobbying battle with smaller cooperatives, community providers and state regulators over the right to emit greenhouse gases.
As the Senate writes a bill to control greenhouse gases, the groups are swarming over a pot of free tradable emissions permits. The carbon dioxide permit market could be worth more than $100 billion a year by 2020, the Congressional Budget Office estimates.
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The not-for-profit cooperatives, which depend heavily on carbon-emitting coal to fire their plants, accuse the Edison Electric Institute, a trade group of investor-owned utilities, of excluding them from a deal to distribute pollution permits.
The cooperatives say the deal would create profits for some Edison Electric members, especially nuclear-power providers such as Constellation Energy Group and Entergy, because they would be less likely to pass the benefits of free permits to customers.
“This is big guy versus little guy,” said Wally Wolski, president of the National Rural Electric Cooperative Association in Arlington.
Edison Electric’s members have spent two years mulling how to distribute allowances under a possible cap-and-trade plan, collaborating with the New York-based Natural Resources Defense Council to draft what became the blueprint for a version of the measure that was approved by the House of Representatives.
The electricity industry skirmish is a part of a broader lobbying battle. Oil producers, refiners, cement makers, mining interests, chemical companies, agribusiness and food processors are angling for more carbon credits to help cover the cost of complying with a cap-and-trade bill.
House lawmakers used the permits as currency to pass legislation on a 219-212 vote in June. The measure allotted 35 percent of free permits to the sector, which accounts for 40 percent of emissions under the program. Some permits would be auctioned.
The cooperatives, which supply power to 42 million people in 47 states, intensified the sector’s demand. Two days before the June vote, House negotiators gave the cooperatives more permits in return for a promise from the group’s chief executive officer, Glenn English, to refrain from a grassroots lobbying blitz against the bill.
The cooperatives’ clout is magnified in the Senate. Their customers are concentrated in Rust Belt states where senators such as Sherrod Brown of Ohio and Evan Bayh of Indiana, both Democrats, so far refuse to back the bill.
