Senate Climate Bill Called Simple vs. Complex House Offering

Investing Daily today published a commentary by utility forecast editor Roger S. Conrad that said the Senate climate legislation (crafted by Sens. Lindsay Graham, R-S.C., John F. Kerry, D-Mass., and Joseph I. Lieberman, ID-Conn.) stands a good chance of passage because it was "as simple as last year's now-dead offering from the House of Representatives was complex. Another is there are considerably more carrots than sticks for industry. That should ensure more industry support than last time around. And finally, advocates appear considerably more willing to compromise."

Conrad noted that EEI has just asked for more information from key Senators on the impact of their version. Wrote Conrad: "Given Senator Graham's assurances that this was 'about energy independence,' utilities are likely to find a lot they like." The aim of the legislation remains cutting GHGs, and the target of 17-percent reduction from 2005 levels by 2020 was being helped "by power utilities switching from coal to natural gas, largely because the latter has become much more price-competitive but also due to closings of some less efficient coal-fired plants."

The bill will avoid the argument that cap-and-trade amounts to cap-and-tax by "returning the vast majority of funds from the purchase of emissions credits to ratepayers. That's a sharp modification of earlier plans that would have used emission auction proceeds to finance the budget deficit. Combined with other, as-yet-unnamed provisions, it would reduce the burden placed on the more coal-dependent states."