Incoming Congress Will Kill Energy Bill, Exec Predicts

WASHINGTON (CN) - A climate bill is unlikely to pass in the next session of Congress, which starts on Jan. 5, a top former energy executive said. "The 112th Congress looks hopeless for any type of cap-and-trade legislation," former Exelon Energy Services executive Elizabeth Moler said at a forum at American University.

Moler was the executive vice president for government affairs at Exelon, a Chicago-based utility, and was chairwoman of the Federal Energy Regulatory Commission under President Bill Clinton.

Climate legislation seemed likely to pass at the outset of the 111th Congress, but "the bill went nowhere," Moler said at the Wednesday forum. A version of a climate bill passed by a slim margin of 219 to 212 in the House in June 2009, but the bill died in the Senate.

A number of cap-and-trade supporters, including Rep. Rick Boucher and Rep. Tom Perriello, both Virginia Democrats, were defeated in midterm elections, Moler said.

Along with Republicans Morgan Griffith and Robert Hurt, who unseated the Virginia Democrats, a wave of cap-and-trade opponents will be coming in with the new Congress.

There are even Democrats in the bunch, including Sen. Joe Manchin of West Virginia, who aired a campaign ad that showed him firing a rifle at the cap-and-trade bill mounted on a target.

"He won, climate legislation lost," Moler said.

Calling the cap-and-trade movement an "energy tax," Republicans included opposition to the bill in a loose set of legislative goals titled Pledge to America, published before the midterm elections in September.

The new Republican majority in the House will cause a power shift for cap and trade.

Rep. Fred Upton, R-Mich., has said he will not support cap-and-trade legislation when he replaces Rep. Henry Waxman, D-Calif., as chairman of the House Energy and Commerce Committee.

Cap and trade was not always a partisan issue, Moler said, noting that, during the 2008 presidential campaign, both Sen. John McCain, R-Ariz., and then-Sen. Barack Obama supported the policy.

Democrats have embraced the market mechanism of cap and trade, Moler said, "and the Republicans have nowhere else to go."

"We thought conservatives would like a market-oriented mechanism," she said.

On the industry side, Moler said "dirty utilities" like coal-fired power plants are less likely to support carbon regulations because they face the costs of following regulations, such as installing clean scrubbers in coal plants. Clean utilities, however, are more likely to favor carbon regulation because they have less carbon emissions and are less affected by the regulations.

"There's very much a split," Moler said.

Coal is already expensive, Moler said. The industry needs $500 billion in new investment just to start energy production without accounting for the costs of transmission and distribution, much less the costs of regulation.

Since complying with regulations is expensive, many companies are shutting down small, coal-fired power plants as their profitability suffers under the regulatory regime.

By contrast, "it's pretty easy to permit and build a natural gas power plant," Moler said. "The coal guys are worried about this."

Moler predicted that in the new Congress, a law seeking to block Environmental Protection Agency regulations on power plants, supported by Sen. Jay Rockefeller, D-W.V., may be tacked onto a must-pass measure such as an appropriation bill or bill about the debt ceiling.

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