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U.S. Utilities Support 80% Emissions Reduction by 2050

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eei-logo1The Edison Electric Institute, which represents about 70 percent of U.S. electricity producers, revealed a new industry wish list for climate change legislation this morning. The group voted last week to support national mandates to reduce greenhouse gas emissions to 80 percent below current levels by 2050 — the same long-term target supported by President-elect Barack Obama.

Unlike plans put forth by Obama and other groups, EEI’s proposal lacks phased deadlines for the interim four decades, saying only that medium-term targets for the next 10-20 years “should be synchronized with deployment of other technologies.”

David Ratcliffe, EEI chairman and president and CEO of coal power giant Southern Company (s SO), described energy efficiency and conservation, carbon capture and storage, and new nuclear power plants as key tools for the industry to reduce its emissions during the next one or two decades, adding that he expects carbon capture and storage to become commercially viable within 15 years.

“It’s important that we don’t create the notion that there is a singular technology of choice,” he said, noting that while his Atlanta-based company might opt for nuclear energy, utilities in the Northeast may move toward more renewable sources.

Positioning itself for a fierce battle with the incoming administration, the group came out in favor of allocating — rather than auctioning — emission permits (based on retail sales and emissions volume) in the early years of a cap-and-trade system for limiting greenhouse gas emissions. While Ratcliffe said the utilities would support a gradual transition to an auction system, President-elect Barack Obama has backed auctioning permits from the get-go as a way to fund research into carbon capture and storage. Not surprisingly, Ratcliffe’s group favors a voucher or carbon offset approach (in which companies could sell credits from reducing or capturing emissions) to supporting this research.

The utilities group is marching to a tune sung more than a year ago by Duke Energy CEO Jim Rogers. He sketched out his vision for an industry-friendly cap-and-trade system, arguing for lawmakers to “allocate allowances at no cost to generators who emit greenhouse gases – and reduce the number of allowances over time, while new carbon-control technologies are being developed and put in place.”

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