CHAMPAIGN, Ill. - In an address hosted by the University of Illinois Center for Business and Public Policy, Exelon Executive Vice President, Finance and Legal, William Von Hoene, Jr., yesterday said that the transition to a clean energy future has been hampered by a "perfect storm" of economic and political challenges. Nonetheless, he argued, the nation cannot afford to ignore the risks of climate change and pollution.
"Political wrangling between the parties over how best to address the nation's energy problems has made it difficult to move forward with legislative solutions," Von Hoene said. "But we cannot afford to wait. Industry needs clarity around how emissions will be legislated or regulated so we can start to make the significant investments that will help the economy and create jobs."
Von Hoene said that electric utilities must play a leading role in transitioning to cleaner sources of energy, despite the regulatory uncertainty. He argued that a market-based approach would be most efficient, as it would encourage companies to invest in the lowest-cost options first.
"We believe that the best way to transition to a clean energy future would be a national system that puts a price on carbon," Von Hoene said. "This would impose the least cost on businesses and consumers and create the financial incentives power generators need to begin to make the massive investments in a clean energy future."
Von Hoene acknowledged that Congress is unlikely to enact climate legislation soon, but noted that the U.S. EPA is moving forward with a suite of regulations of traditional air pollutants and carbon under the Clean Air Act, which will accelerate the transition to cleaner energy sources.
"If the EPA's numerous rules proceed as expected, they have the potential to improve the quality of the air we breathe and transform the electric industry," Von Hoene said. "The EPA rules would require coal-fired power plants without controls for nitrogen oxide, sulfur dioxide, mercury and other heavy metals to make the decision to either install pollution control technology or retire so they can be replaced by cleaner, more efficient plants."
Exelon is the least carbon-intensive of the nation's major power producers. In 2008, the company introduced its Exelon 2020 business strategy to eliminate 15 million metric tons of greenhouse gases per year, the equivalent of its annual carbon footprint, by 2020. Exelon 2020 tells the company which investments have the highest returns for its shareholders, while also providing its customers with reliable, clean energy at the lowest costs.
"It is not a happy coincidence that Exelon is in a position to achieve this goal," Von Hoene said. "We have long believed that a clean energy portfolio, based on sound economics, creates compelling shareholder value and provides a clear competitive advantage. Therefore, we began the transition to a clean energy future years ago by selling fossil fuel power plants and investing in emission-free nuclear power."
Von Hoene spoke as part of a panel on environmental regulation that included experts from the Environmental Defense Fund and UBS Securities. His prepared remarks are available on the Exelon website at: www.exeloncorp.com/aboutus/speakersbureau.