Washington (Platts)--28Jun2007

In a backdrop of newly found Republican support for climate-change
legislation, the US Senate Environment and Public Works Committee on Thursday
heard ideas and concerns from electric utilities that support a market-driven
solution, but differ on key parts of its architecture.

     Independent Senator Joe Lieberman of Connecticut told the panel that
Senator John Warner, a Virginia Republican, has agreed to work with him in
drafting legislation to set up an economy-wide cap on greenhouse gas emissions
and an emissions allowance trading system to slow global warming. 

     Lieberman said he and Warner would study the half-dozen existing climate
bills, but will start with goals and targets that the US Climate Action
Partnership outlined--economy-wide GHG reductions of 60% to 80% from current
levels by 2050. USCAP comprises 29 US corporations and environmental groups.

     Testifying before the committee were Duke Energy President, Chairman and
CEO Jim Rogers; Pacific Gas and Electric President, Chairman and CEO Peter
Darbee and Lewis Hay, FPL Group's chairman and CEO. The three officials are
founding members of USCAP, but offered the committee different ideas on how to
address climate change.

     Darbee, whose company largely excludes coal generation, said he supported
legislation from Democrat Senators Tom Carper of Delaware and Dianne Feinstein
of California to cut electric utility emissions by 25% below business-as-usual
levels by 2020 using a schedule of increasing caps and auctions of emissions
allowances. 

     Duke Energy's Rogers, whose company is the third largest consumer of
coal, urged the committee to consider a "bridge" to keep customer impact at a
minimum. That would involve allocating emission allowances and support for
developing low-carbon generation, such as nuclear energy. "Congress must
recognize that no single energy source will address the climate change
challenge and at the same time meet growing demand," he said.

     FPL's Hay, whose company is the largest wind and solar energy producer in
the US, favored a "carbon fee," in which the bulk of collections would go
toward consumers and research and development of technologies to limit
emissions and advance conservation. A fee would be more easily administered
than a trading system and could be levied based on a source's emission rates,
he said.

     Lieberman said the goal is to draft and report a bill from his global
warming subcommittee to the full Environment and Public Works committee--led
by California Democrat Barbara Boxer--before Congress' August recess.

		--Cathy Cash, cathy_cash@platts.com