Toronto, Ontario (Platts)--16Jun2008

The US electric power industry must avoid becoming the tax man in any
future legislative efforts to cut greenhouse gas emissions through a
market-based plan, the head of a power industry association said Sunday.

"We must resist the efforts being made by some to make our industry the
tax collector through carbon costs to our customers so that others at the
federal level can be heroes in doling out vast sums of money raised on the
backs of our customers," Edison Electric Institute Chairman Jeff Sterba said
at the group's annual conference in Toronto.

Sterba also is president and CEO of PNM Resources, a investor-owned
utility that serves Texas and New Mexico.

The US Senate recently defeated a GHG-reduction proposal in a vote lauded
both by industry -- which criticized the measure as too costly -- and
environmentalists, who said the legislation fell short of needed GHG cuts.

President Bush has opposed a carbon mandate, but the next president is
expected to support an economy-wide cap-and-trade scheme. Presumptive nominees
Senator Barack Obama for the Democrats and Senator John McCain for the
Republicans both back carbon markets, although their proposal details differ.

"There is no question that the US will enact some form of climate change
legislation in the next administration," Sterba said. "[A]nd they will be an
active participant in the international negotiations for a global post-2012
climate policy."

Sterba said that any future GHG-reduction program, as well as other
factors, such as the increase in commodity prices, will continue to affect the
power industry.

"The power industry now faces the largest capital formation challenge in
its history," Sterba said. US utilities are expected to spend about $800
billion in the next 12 years, which is what the industry has spent in the last
100 years, he said.

EEI members represent about 70% of the US electric power industry,
according to the group of investor-owned utilities.

--Carla Bass, carla_bass@platts.com