Duke Energy Elbows Co-ops for Carbon Permits in Climate Measure
Some of the largest U.S. electricity companies, including Duke Energy Corp. and American Electric Power Co., are fighting what may be a $100 billion battle with smaller cooperatives, community providers and state regulators over the right to pollute.
As the Senate writes a bill to control greenhouse gases, the groups are swarming over a pot of free permits that cap carbon emissions and create a trading system of pollution rights.
Lawmakers want to broker peace the way they did two decades ago when they gave AEP and other coal-plant operators license to pollute as part of a deal to curb acid rain. Critics decried the decision as a giveaway to the “big dirties.”
“Acid rain was a big political compromise; in essence it was a multibillion-dollar bribe,” said Frank O’Donnell, president of the Washington-based environmental group Clean Air Watch. “The only difference with carbon is the stakes are far bigger.”
The carbon-dioxide permit market could be worth more than $100 billion a year by 2020, the Congressional Budget Office estimates.
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.
‘Big Guy v. Little Guy’
The cooperatives say the deal would create profits for some Edison Electric members, especially nuclear-power providers such as Constellation Energy Group Inc. and Entergy Corp., 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, Virginia.
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.