Investment analysts Sanford Bernstein projected that the Chicago-based utility Exelon would reap more than a billion dollars per year in windfall profits under the scheme. Exelon’s CEO Rowe openly noted that “We don’t flinch from the charge that, yes, some of our motivation and enthusiasm comes from the fact that we should make money on it if it happens.” Real, big money is surely a real, big part of that enthusiasm.
In fact, according to Forbes’ interview with Rowe, “Exelon needs that legislation to happen sooner rather than later. Without a carbon price of some sort, Exelon’s fortunes aren’t so bright….Rowe acknowledges [that] ‘There’s nothing that’s going to drive Exelon’s profit in the next couple of years wildly. It just isn’t going to happen.’ Except, of course, carbon legislation. And because of that, the company views spending on lobbying for legislation almost like a capital expense.”
Around the same time as these Exelon revelations, Mike Morris, the CEO of America’s largest coal burning utility, American Electric Power (AEP), told Forbes that the scheme—which, by chance he, too, is promoting—would add billions in additional costs to his company, certainly, but he chuckled at the beauty of it: they get to pass those billions on to the ratepayer, with a little something on top for themselves. Under cost-recovery schemes giving a percentage for their troubles, the more it costs, the better.
These billions, which come from you—at least so long you don’t or can’t leave the energy companies, as Morris notes in his interview—would also in some cases be for no additional capital expenditure or other outlays or obligations on their part, outside of the army of lobbyists—er—”public affairs specialists,” working feverishly to get this burden enacted into law. “Exelon would gain simply because a price on carbon would raise the cost of production for fossil-fuel-powered electricity. Most of that would be passed on to customers, raising the wholesale price of power. Exelon’s revenues would rise, but its costs wouldn’t.”
That explains today’s ugly display of Baptists and Bootleggers sharing a stage with activist politicians. The rest of this chapter in “Power Grab“ details even more of the egregious rent-seeking that this agenda advances. But from this excerpt you see the reality behind Obama’s tout that “some of America’s biggest companies support” his cap-and-trade scheme being introduced in the Senate on Wednesday. Don’t look for the media to ask “Ok…why?” But at least now you know.
Christopher C. Horner is a New York Times bestselling author whose newly released book is “Power Grab: How Obama’s Green Policies Will Steal Your Freedom and Bankrupt America“ (Regnery).