Coal-burning utilities seek a role in EPA rule-making on greenhouse-gas emissions


“Now is not the time to burden our still tenuous economic recovery with overly stringent regulations that will further impede that recovery, said Nick Akins, American Electric Power Co.’s chief executive, in an e-mail. (Michael S. Williamson/The Washington Post)
February 3, 2013

Lobbyists for coal-burning utilities such as Southern Co. and Duke Energy are consulting environmental advocates and holding strategy sessions as they seek a role in shaping President Obama’s plan to combat climate change.

Obama’s emphasis on global warming in his inaugural address last month has led power and coal producers, which have fought regulation of greenhouse gas emissions from power plants, to begin crafting their own proposed rules.

“It was the hope of a lot of companies in this sector that the president would be defeated,” Manik Roy, vice president for strategic outreach at the Center for Climate and Energy Solutions, an Arlington-based energy and environment policy group, said in an interview. “Now that the president has raised this as such a high issue, you’d be absolutely nuts not to be in there trying to engage constructively.”

Groups such as the National Mining Association (NMA), which has sued to block or overturn Environmental Protection Agency rules in the past, appear to be taking a less confrontational approach now. The association for producers such as Arch Coal Inc. and Peabody Energy called last year’s EPA proposal that would have effectively outlawed new coal-fired power plants that lack carbon-capture technology “unprecedented and unlawful.”

For the next round of rule-making, the group is considering proposing its own regulations.

“We are looking at it internally here with our members to see if there are particular pathways that work better and can keep coal as a vibrant part of the electricity portfolio,” Hal Quinn, the NMA president, told reporters on Jan. 28. “That’s a very important question.”

The NMA, based in Washington, donated $839,250 to federal candidates for the 2012 election, with 92 percent going to Republicans. American Electric Power Co. and Southern Power, among the top coal-burning utilities in the United States, gave about three-quarters of their political donations in 2012 to Republican candidates and groups, according to the Center for Responsive Politics, which tracks campaign spending. Coal producers as a group gave 90 percent of their donations to Republicans.

But Obama was reelected. The results have left coal companies and power producers pivoting from political foes to reluctant partners of Obama.

Tool chest

“You’ll see the full range of activities that are in the government-relations tool chest,” Scott H. Segal, a lawyer at Bracewell & Giuliani in Washington who represents coal-fired utilities, said in an interview. “Everything from direct advocacy to negotiation to advertising and grass-roots engagement.”

In his inaugural address, Obama warned that failure to act on climate change “would betray our children and future generations.”

Michael McKenna, an oil-industry lobbyist and president of MWR Strategies in Washington, said in an interview, “What the inaugural address told us was it’s going to be the most important rule-making EPA is going to do in the second term.’’

Relying on authority in the four-decade-old Clean Air Act and a 2007 Supreme Court decision applying the law to carbon-dioxide emissions, the EPA is set to finalize rules for greenhouse-gas emissions from new power plants by the end of March. The agency will then face legal and political pressure to issue related standards for existing plants, the largest source of those pollutants.

“We plan to work with various stakeholders — including the president, Congress, environmental advocacy organizations and industry groups — to address the issue” of climate change, said Ryan Frazier, a spokesman for Dominion, a Richmond, Va.-based electricity company.

It’s not the first time that power producers have sought to shape Obama’s climate policy. In 2009, a coalition of businesses and environmental groups pushed for legislation to cap carbon emissions and allow trading of carbon credits to meet targets.

When the legislation stalled in the Senate, Obama distanced himself from cap-and-trade, and the coalition, the U.S. Climate Action Partnership, hasn’t issued any public statements since 2011.

Seeking a ‘predictable path’

“We just need to see what they come up with,” Tom Williams, a spokesman for coalition-member Duke, said in an interview, when asked about Obama’s inaugural pledge. “Our whole intent was to have a predictable path going forward.”

About half of Duke’s electricity comes from coal plants. The company, based in Charlotte, plans to close 50 coal-fired units, Williams said.

American Electric Power Co., based in Columbus, Ohio, also supported the 2009 effort, building a carbon-capture plant in West Virginia in anticipation of the bill’s passage.

“AEP will stay engaged on this issue and will share our concerns about the potential economic impact of greenhouse gas rules with the EPA, with the administration, with lawmakers, really with anyone who will listen,” Nick Akins, American Electric’s chief executive, said in an e-mail.

“Now is not the time to burden our still tenuous economic recovery with overly stringent regulations that will further impede that recovery,” Akins said.

— Bloomberg News

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