AEI has published an invitation to an event next Tuesday oddly titled “Energy Policy: Above All, Do No Harm”.
Why oddly titled? The sole speaker is CEO of Exelon, John Rowe.
As in the guy who let the big old nasty kitten of Exelon’s energy policy-slash-lobbying strategy out of the bag in an interview with Forbes which should be required reading for all aspiring corporate general counsels and flacks: when people would be rightly disgusted and even outraged by your philosophy of using the state to rob Peter so you can play Paul, don’t let your guy talk.
Here are a few excerpts:
[I]t appears that Washington–helped along by Rowe’s lobbying–is going to impose a price on carbon, either through a cap-and-trade bill that has passed the House of Representatives or through Environmental Protection Agency regulations. While its carbon-heavy competitors would have to raise prices, Exelon would benefit greatly. Under the House bill, estimates Bernstein Research’s Hugh Wynne, the present value of Exelon’s earnings stream would increase by $14 a share, or 28%….
Rowe acknowledges. “There’s nothing that’s going to drive Exelon’s profit in the next couple of years wildly. It just isn’t going to happen.”
Except, of course, carbon legislation. And because of that, the company views spending on lobbying for legislation almost like a capital expense. William Von Hoene, a cowboy-boot-wearing former criminal defender who heads the finance and legal departments for Exelon and is a possible successor to Rowe, thinks of carbon legislation as Exelon’s big growth opportunity. “It’s an investment we are making that will result in substantial shareholder value,” he says.
So lately Rowe spends more time wearing out shoe leather in Washington than he does gazing at the sparkling lights of downtown Chicago. He has emerged as a lobbyist for cap and trade, a scheme that would limit carbon emissions to the amount spelled out in tradable carbon permits. If such a scheme is enacted, utilities without the need to buy permits will be at a competitive advantage to utilities that need to have them.
It doesn’t hurt that, while Rowe is a Republican, Exelon has very deep ties to the Obama Administration. Frank M. Clark, who runs ComEd, helped advise Obama before he ran for President and is one of Obama’s largest fundraisers. Obama’s chief political strategist, David Axelrod, worked as a consultant to Exelon. Obama’s chief of staff, Rahm Emanuel, helped create Exelon. Emanuel was hired by Rowe to help broker the $8.2 billion deal between Unicom and Peco when Emanuel was at the investment bank Wasserstein Perella (now Dresdner Kleinwort). In his two-year career there Emanuel earned $16.2 million, according to congressional disclosures. His biggest deal was the Exelon merger.
Emanuel e-mailed Rowe on the eve of the House vote on global warming legislation and asked that he reach out to some uncommitted Democrats. “We are proud to be the President’s utility,” says Elizabeth Moler, Exelon’s chief lobbyist. “It’s nice for John to be able to go to the White House and they know his name.”…
It is not lost on anyone that Rowe stands to gain a lot from this legislation. Exelon discloses that it expects a revenue boost of $1.1 billion a year if carbon is priced at $15 a ton. Exelon would gain simply because a price on carbon would raise the cost of production for fossil-fuel-powered electricity. Most of that would be passed on to customers, raising the wholesale price of power. Exelon’s revenues would rise, but its costs wouldn’t.
Yeah. Gee. Where’s the harm in doing what this nice fellow — so close to this president who admits he views his lobbying like a capital expense, because their windfall of more than a billion dollars off of you every year would come for no additional capital expense, but just having the state arrange it so they can charge more for their stuff — wants? Doesn’t harm…him.
To answer that, I turn the mic over to Barack Obama.