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2007 CEO Forum: Greenhouse Gauntlet

Tackling climate change is a monumental challenge. Power-company CEOs discuss long-range plans for a climate-friendly energy economy.

Fortnightly Magazine - June 2007

efficiency record or their growth rate—would be quite penal to a company like ours. Instead of rewarding or recognizing our achievements, these bills would force us into an untenable position.

Given current technology, it’s not possible for us to be much cleaner. Combine that with Florida’s tremendous growth rate, and it would be impossible for us to simply cut our emissions by a specified percentage. In real terms, because FPL has already reduced total CO 2 emissions significantly over recent years, millions of Floridians will, in a very perverse twist, have to pay twice if FPL is required to buy credits from other less forward-looking companies.

As a result, we have to be diligent about the details of any proposed federal or state policies. We have to work to educate the policy- and decision makers. We have to ensure everyone understands that by investing in clean and efficient technologies, our customers have already paid for our low rate of emissions.

Rowe, Exelon: There are key questions about how we will operate in a lower-carbon, less energy-dependent fashion. I think the two key technologies will be nuclear and coal with carbon capture. I think natural gas will be a significant bridging technology, with a significant niche opportunity for windpower. But I don’t see renewables filling a large part of the hole unless prices are allowed to rise very high indeed.

Put in naked terms, we can have a more energy-independent, less carbon-intense economy with electric prices in the next decade between 15 and 20 cents per kilowatt-hour. If we make believe you don’t need nuclear and coal to do that, we will have higher electricity prices, and that will be bad for the economy.

Carbon capture and nuclear-waste management are key questions that can be answered, but not for free. There is little doubt in my mind a nuclear expansion would be the cheapest solution, but you don’t build new nuclear plants for 4 to 6 cents a kWh. I don’t have a good number, but I think 9 cents is a better number.

Utilities, regulators, customers and the markets have to come to terms with that, and they aren’t ready to do that yet.

Chesser, Great Plains Energy: I’m most concerned that any approach to GHG regulation should be a prospective charge rather than a retrospective charge. The worst thing would be to put in a carbon assessment that would shift the economic balance between cities in the East, Midwest, and West Coast.

At KCP&L, we get about 70 percent of our power from coal and 30 percent from nuclear. People in Chicago get maybe only 20 percent of their power from coal. I don’t think nuclear investment decisions were made for environmental reasons. We and other utilities made those investments because they were in the best interests of investors at the time. For a nuclear utility’s customers to see a comparative benefit in energy prices as a result of GHG regulation would be a real problem.

We have worked hard in the Kansas City region to grow our community. There are