Exelon to Quit Chamber Over Climate Bill

by Clifford Krauss and Kate Galbraith

Exelon, one of the country's largest utilities, said Monday that it would quit the United States Chamber of Commerce because of that group's stance on climate change. It was the latest in a string of companies to do so, perhaps a harbinger of how intense the fight over global warming legislation could become.

"The carbon-based free lunch is over," said John W. Rowe, Exelon's chief executive. "Breakthroughs on climate change and improving our society's energy efficiency are within reach."

A wave of departures from the chamber has been building for weeks. It was heralded Monday by some Congressional Democrats and environmentalists as a sign that the business community's opposition to global warming legislation is weakening. In their view, that improves the chances that a global warming bill that narrowly passed the House in June might also pass the Senate.

But others said the resignations were just a sign that businesses will have varied positions depending on whether they will be winners or losers from the legislation. Exelon, a Chicago company that sells electricity and gas in four states, is also the country's largest operator of nuclear power plants. That type of electrical generation emits no greenhouse gases and would gain a financial advantage under the pending bills.

"There will be significant vibrations from this," said Representative Jay Inslee, a Democrat of Washington State on the Energy and Commerce Committee. "It's a bit of an earthquake."

Pacific Gas & Electric, the dominant utility in Northern California, and PNM Resources, a holding company that includes the largest utility in New Mexico, said recently that they would withdraw from the national chamber. Mr. Rowe said Exelon would not renew its membership because of the chamber's "stridency against carbon legislation."

The United States Chamber of Commerce is one of the main business lobbies in Washington, with more than three million members. It says it not opposed in principle to tackling global warming, but is worried about any approach that would raise costs for businesses.

The chamber has been especially vocal recently in opposing a proposal by the Environmental Protection Agency to use an existing law, the Clean Air Act, to set limits on greenhouse gases. The proposal would most likely take effect only if Congress failed to pass climate legislation.

The utilities and other companies that are supporting climate change legislation tend to be those based in more liberal parts of the country and believe that being viewed as environmentally responsible is a good marketing strategy, energy and business analysts said. The utilities tend to be dependent on sources like nuclear power that emit fewer greenhouse gas emissions than their competitors.

Before, "voicing their good fortune among higher-carbon colleagues was seen as impolite," said Paul Bledsoe, director of communications and strategy at the National Commission on Energy Policy, a bipartisan research organization. "Now that legislation seems imminent, these companies are stepping up to support legislation because it helps their bottom lines."

What appears to have touched off the utilities' withdrawals from the chamber was a recent article in The Los Angeles Times that cited chamber officials who called for a "Scopes monkey trial of the 21st century" about the science of climate change. The Scopes trial was a clash of creationists and evolutionists in the 1920s.

Both PG&E and PNM cited the possibility of such a trial as a major concern.

Don Brown, a PNM spokesman, said in a statement that his company felt compelled to "particularly reject" the chamber's "recent theatrics calling for a ‘Scopes monkey trial' to put the science of climate change on trial."

However, David C. Chavern, the chamber's chief operating officer, said there had been a misunderstanding. Chamber officials do not question the overall science of climate change, but rather, the group questions whether that science is enough to support the E.P.A.'s rulemaking under the specific legal requirements of the Clean Air Act.

"We're not looking at the next Scopes monkey trial," he said. "We just think the E.P.A. is the wrong venue to be dealing with climate change issues that will impact the whole country and whole world."

He said another chamber official's reference to the Scopes trial "was wrong, inaccurate and obscured what the chamber is really doing."

Other companies have also expressed differences with the chamber recently. Nike has said in a statement that it "fundamentally disagrees with the U.S. Chamber of Commerce's position on climate change and is concerned and deeply disappointed with the U.S. Chamber's recently filed petition challenging the E.P.A.'s administrative authority and action on this critically important issue."

Johnson & Johnson, the big consumer products company, urged in a letter this spring that the chamber's statements on climate change "reflect the full range of views, especially those of chamber members advocating for Congressional action" on global warming.

Duke Energy, a large Southern utility that supports action against global warming, has so far stayed in the national chamber, but it withdrew from of the National Association of Manufacturers in December, citing climate as a partial factor. The manufacturers' group has also been wary of action by the E.P.A.

In August, Duke Energy also left the American Coalition for Clean Coal Electricity, citing climate policy. "It was clear that many influential members would never support climate legislation in 2009 or 2010 no matter how it was written," Tom Williams, a Duke Energy spokesman, said in an e-mail message. Alcoa, the aluminum company, also pulled out of the coal coalition this summer, with climate policy being one factor, a spokesman said.

"This is an issue that will cleave a lot of companies more than other business policy issues because there are sharper differences in strategies," said Matthew J. Slaughter, associate dean of the Tuck School of Business at Dartmouth College. He noted that a utility that primarily used coal would logically have a different view from one dependent on nuclear power.

Climate change legislation still faces a tough battle in the Senate, where legislators from coal states will seek to protect the coal industry, and where many Republicans are opposed to any action they believe would put American businesses at a disadvantage.

Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Energy and Natural Resources Committee, said he did not know what impact the recent corporate policy announcements would have on individual senators. "But I do think it's a sign at least some in the business community are anxious to see us provide some leadership on climate change," he added.