A cli­mate plan busi­nesses can like

The Pak Banker - - OPINION - Jody Free­man and Kate Kon­schnik Aug

WITH the re­lease of Pres­i­dent Obama's Clean Power Plan, a flood of le­gal chal­lenges will be­gin. Al­ready, op­po­nents have de­nounced the new rule lim­it­ing car­bon pol­lu­tion as un­con­sti­tu­tional. Be­hind the rat­tling sabers, how­ever, there's a qui­eter story worth notic­ing. Many big play­ers in the elec­tric power in­dus­try will gain more with the rule in place than if the courts strike it down.

In fact, many power com­pa­nies have worked with the ad­min­is­tra­tion to get the best pos­si­ble deal, and with states to dis­cuss com­pli­ance strate­gies. Given their fi­nan­cial in­ter­ests, some of these util­i­ties may even wind up help­ing the gov­ern­ment de­fend the rule.

The plan sends a clear mar­ket sig­nal that low-car­bon energy will be prof­itable. Many of the coun­try's most pow­er­ful in­vestor-owned util­i­ties, in­clud­ing MidAmer­i­can, South­ern Com­pany and Ex­elon, have made big in­vest­ments in low car­bon sources like wind, so­lar or nu­clear power. Their de­ci­sion to do so was driven by a mix of mar­ket op­por­tu­ni­ties, in­vestor pref­er­ences, tax cred­its and state and fed­eral air pol­lu­tion stan­dards.

In the last sev­eral years, util­i­ties also have be­gun shift­ing away from coal to­ward cheaper nat­u­ral gas. What they want now is a clear and pre­dictable fed­eral plan that will help them profit from these in­vest­ments, and re­ward them for mak­ing more. The pres­i­dent's plan does just that. It lim­its car­bon pol­lu­tion at the na­tion's old­est and dirt­i­est power plants and al­lows them to meet those lim­its in a va­ri­ety of ways; for ex­am­ple, by be­com­ing more ef­fi­cient, op­er­at­ing less of­ten or in­vest­ing in cleaner energy sources.

In­cen­tives in the plan will en­cour­age the de­vel­op­ment of re­new­able energy. States can award cred­its to com­pa­nies that buy or build re­new­able projects, and these com­pa­nies can bank them even be­fore the com­pli­ance pe­riod for meet­ing emis­sions lim­its be­gins. The fed­eral gov­ern­ment will match these state cred­its, which will help busi­nesses com­ply with those lim­its. With these in­cen­tives, it pays to pro­duce clean energy. Any util­ity that al­ready owns cleaner forms of energy, or hopes to build them, can profit - whether it is South­ern Com­pany con­struct­ing new nu­clear re­ac­tors and steadily ex­pand­ing its port­fo­lio of re­new­ables, or MidAmer­i­can, a na­tional leader in in­stalled wind power that may look to ex­pand its mar­ket.

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