Exelon exec tells clean-energy strategy
CHAMPAIGN – There are two ways to motivate electric utilities to reduce their emissions, said Bill Von Hoene Jr., an Exelon executive speaking at the University of Illinois on Tuesday.
One is the carrot (legislation) and one is the stick (regulation).
The utility's position?
"The carrot is the most effective way of getting to a cleaner energy future," he told an audience at the College of Business Instructional Facility.
Von Hoene, executive vice president of the Chicago-based Exelon, one of the largest electric and gas utilities in the country, visited campus Tuesday to participate in the talk "Environmental Regulation: Building a Low-Carbon Economy" sponsored by the UI's Center for Business and Public Policy.
Von Hoene was joined by Mark Brownstein, deputy director of the Environmental Defense Fund's energy program, and Jon Anda, vice chairman and head of environmental markets for UBS Securities at the event.
"Electric utilities have a leading role to play in charting the course to a clean energy future as uncertain as the path forward may be," Von Hoene said. This uncertainty has made the industry reluctant to make large-scale investments that are "needed to make the transition to cleaner energy future," he said.
With the absence of a "silver bullet technology" ... "until legislation or regulation moves forward it will continue to be difficult to make long-term business decisions," he said.
Von Hoene described what he called a "perfect storm" of economic and political challenges that have made it a difficult time to transition to cleaner energy sources.
Congress has not passed comprehensive climate legislation.
Months ago when he agreed to come to Tuesday's event, Mark Brownstein said he was hopeful "I would be able to stand here and talk to you about what the national climate legislation signed by President Obama would mean."
"We had great hopes over the last two years our efforts would have culminated in a piece of legislation signed this spring," Brownstein said.
What happened? Partisan politics had a role, but also regional politics and it was hard to bring "coal state Democrats" on board, he said. Another issue was as the economy took a turn south an "economic anxiety" grew among people who resented corporations and markets and the belief that "market mechanisms" such as cap-and-trade would be in the public's best interest.
Meantime, the federal government has had an ad hoc approach to climate change and energy security, Von Hoene said, citing tax credits and subsidies for wind and solar energy and loan guarantees for new nuclear plants.
People are realizing nuclear's value as a clean energy source, he said, but the cost to build a plant is "enormous," he said.
Exelon, which has 17 nuclear power plants in 10 locations, including Clinton west of Champaign, does not have plans to build any new nuclear plants, but it is investing billions in what Von Hoene called "uprates," which entail upgrading plants to improve efficiencies. The Clinton plant recently finished an uprate project, he said.
The firm is also retiring inefficient coal plants, buying wind power and developed a solar power plant on Chicago's South Side.
"The question facing the United States is not whether it should reduce emissions, but how to do so affordably, especially in light of current economic conditions," Von Hoene said.
Brownstein said the Environmental Defense Fund is focused on "re-engaging the climate discussion" and he realizes working with the next Congress may be more of a challenge than with the current one. The group will also work to defend the Environmental Protection Agency's authority to regulate greenhouse gas pollution, he said.
Climate change "continues to be the defining environmental issue of our generation," Brownstein said.
"We have to do a better job of making that case and (making the case) about the economic opportunity that comes along with addressing that challenge," he added.