Senate Democrats continue last-ditch talks to save climate plan

Senate Democrats are continuing a last-ditch effort to preserve greenhouse gas reductions in a larger energy and climate strategy.

Sen. John Kerry (D-Mass.) met Monday with a trio of key players in the debate: Edison Electric Institute (EEI) President Tom Kuhn, Environmental Defense Fund (EDF) President Fred Krupp and David Hawkins, the head of the climate center at the Natural Resources Defense Council (NRDC).

Kerry also gave a status report Monday to Senate Majority Leader Harry Reid (D-Nev.), who is expected to unveil a larger climate and energy package by Wednesday in preparation for the start of floor debate next week, sources closely following the talks said. There is the possibility though that Senate consideration of an emergency war spending bill and other legislative priorities may push back the Senate energy debate and open an even smaller window of available time before senators break for the summer in August.
 
Officials from EEI – which represents investor-owned utilities – will meet with Kerry again Tuesday, as part of a broader set of meeting involving senators and utility company representatives.
 
EDF and NRDC have been participating in negotiations with a handful of electric utility companies — including Duke Energy and Exelon — on a possible compromise for a carbon-pricing plan on the electric utility industry.
 
Reid last week said he would include a way to address carbon emissions from power plants in a broader strategy, but it remains unclear whether Democratic leaders will be able to come up with a compromise proposal that could get 60 votes.
 
One of the options Reid has is to leave a carbon-pricing plan out of the bill and focus instead on getting the strongest combination of energy and oil spill language in the bill.
 
“It may be time to stop beating a dead horse,” said a former Senate Democratic aide involved in the climate talks. “This realization is broadly held, if rarely uttered publicly yet.”
 
“The fact that the same people were negotiating a year ago indicates the big tent has not been filled,” the former aide said. "It's time to call it a day on a climate cap and focus on issues that have broader support."
 
Environmentalists involved in talks over the bill said they are still expecting Reid to introduce a bill that includes a carbon element.
 
There are three main obstacles negotiators have been working on and progress appears to have been made on two of them: giving the necessary emission allocations to utilities under a market-based carbon restriction plan and offering financial help for utilities to retire the dirtiest power plants.
 
But the third obstacle — giving the utility industry some regulatory relief from Clean Air Act requirements for other pollutants such as ozone, particulate matter and lead — has been tougher to overcome.
 
Environmental groups are still standing firm on not wanting utility companies to receive relief from EPA greenhouse gas regulation and those that would cover more conventional air pollutants.
 
“We certainly made it clear, as far as we’re concerned, that any kind of rollbacks have no place in this bill,” said Dan Lashof, deputy director of NRDC’s climate center.
 
There are talks between some green groups and electric utility companies about including placeholder language in a Senate bill that would be a promise to have the Clean Air Act regulatory relief issue resolved during later bicameral discussions between the House and Senate, according to a source closely following the talks.
  
Democrats and Republicans may want the floor debate to be unresolved at the start of the August break. Democrats may see the possibility for getting the necessary 60 votes for an ideal package with more time, while Republicans may want to hammer Democrats on the issue before the midterm election. Sen. Joe Lieberman (I-Conn.), who has been working with Kerry on a carbon-pricing strategy, said last week he would be fine with having the debate spill over into September.