Isramart : Giveaways: Fight Over Carbon-Emission Permits Comes to Senate

Isramart news:
More fun and games as the Senate grapples with the climate bill. The latest twist: Senators from coal-dependent states are pushing hard to ease the pain for power companies that rely on coal.

At issue is one of the things that sparked most of the horse-trading when the House wrote its climate bill: How to hand out free emissions permits under a cap-and-trade plan to cushion the cost of the legislation. That’s one of the big tasks facing Finance Committee Chairman Max Baucus in the Senate.

The House settled on a split-the-difference formula. That is, power companies would get free permits based partly on how many greenhouse-gas emissions they produce, and partly on how much electricity they produce. Now, key Democratic senators want to revise that formula, Reuters reports. Some 14 senators wrote to majority leader Harry Reid yesterday:

“We urge you to ensure that emission allowances allocated to the electricity sector–and thus, electricity consumers–be fully based on emissions as the appropriate and equitable way to provide transition assistance in a greenhouse gas-regulated economy,” the letter said.

It may sound arcane, but it isn’t. First, easing the pain for coal-heavy power companies is a way to ease the pain for coal-dependent states, which carry the swing votes for any climate legislation.

But this isn’t just about politics and vote-counting. There are billions of dollars at stake. Power companies that produce more clean energy stand to gain from climate legislation under the current formula; power companies that produce more dirty energy stand to lose.

That’s one reason companies such as Exelon and Duke have been cheerleading climate legislation: Their bottom lines will bulge. And it’s one reason fossil-fuel-dependent companies, from coal-heavy utilities to Exxon, have been opposed to the current legislation.

Granted, the Senate won’t even be able to tackle climate legislation until next year. But when it does, expect the fight among and between power companies to come to the fore.