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The Power BrokersThe Struggle to Shape and Control the Electric Power Industry$
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Jeremiah D. Lambert

Print publication date: 2015

Print ISBN-13: 9780262029506

Published to MIT Press Scholarship Online: May 2016

DOI: 10.7551/mitpress/9780262029506.001.0001

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Jim Rogers and the Politics of Accommodation

Jim Rogers and the Politics of Accommodation

(p.233) 7 Jim Rogers and the Politics of Accommodation
The Power Brokers

Jeremiah D. Lambert

The MIT Press

While Lovins addressed fossil fuels, renewables, and a carbon tax as a consultant and public intellectual, Jim Rogers, until recently the chief executive officer of Duke Energy, the nation’s largest electric utility, did so as a shrewd pragmatist and soldier in the trenches of legislative conflict. A facile lawyer who served as a FERC litigator, Rogers once ran the gas pipeline business of Houston Natural Gas, an Enron predecessor. Later he took the helm at PSI Energy, a coal-fired utility, where he reached an accommodation with environmental opponents on cleaning up his company’s SO2 emissions, then the subject of cap-and-trade amendments to the Clean Air Act. Rogers defied industry logic and supported the new program just as other utility executives lobbied against it. Rogers saw the SO2 cap-and-trade program as a smart and creative compromise that allocated generous allowances to utilities in coal-dependent states and enabled them to modernize their plants to meet emissions targets without price spikes. In the conservative utility industry, Rogers was an outlier whose environmental credentials generated favorable publicity but at the same time drew skepticism. In 2006, after a series of acquisitions, Rogers headed Duke Energy, just in time to participate as a key player in shaping forthcoming climate change legislation that proposed CO2 cap-and-trade methodology modeled on the successful SO2 program of almost twenty years before. Rogers wanted Duke Energy to receive enough free allowances to make the transition to clean energy affordable and avoid rate shock for its customers. Environmentalists saw free allowances as a giveaway to polluters and demanded they be auctioned, but Rogers objected to according the government free rein to spend revenues raised from selling allowances. In his first State of the Union message President Obama proposed legislation that placed a market cap on carbon pollution. Coal-fired utilities, with Duke Energy in the forefront, saw a looming threat. Eager to shape the debate, Rogers urged that the power sector receive 40 per cent of all allowances for free as a bridge to a decarbonized economy and got most of what he wanted in the Waxman-Markey bill that narrowly passed the House in 2009 but later failed in the Senate, the victim of polarized politics. In negotiations with Congress, Rogers had used his pivotal position to extract the accommodation he required only to see cap and trade blown away by hard economic times, extreme partisan division, and effective right-wing opposition. Given the threat of legislation, he tried to mitigate the risks to his company. “When you see a parade form on an issue in Washington,” he said, “you have two choices: you can throw your body in front of it and let Washington walk over you, or you can jump in front of the parade and pretend it’s yours.”

Keywords:   Rogers, Duke Energy, cap-and-trade, free allowances, environmentalists, rate shock, Waxman-Markey

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