Exelon Latest to Leave US Chamber of Commerce; Is Nike Next?

The U.S. Chamber of Commerce is beginning to bleed members over its staunch opposition to climate legislation intended to reduce the nation's global warming emissions.

John Rowe, CEO of one of the nation’s largest electric utilities, announced the group's latest loss today: Exelon, a $19 billion company with 5.4 million electricity customers, will not renew its membership in the once-essential business group.

Exelon was the third utility in a week to announce it was leaving the Chamber, and one of a growing number of companies urging the business group's executives to change their tune on climate action. Another member, Nike, is under pressure from shareholders, who will be urging the company in a letter tomorrow to also dump the Chamber.

Rowe explained his support for climate legislation while announcing his company's intentions to leave the Chamber during the American Council for an Energy Efficient Economy national conference this morning:

“The carbon-based free lunch is over," the Exelon CEO said. "But while we can’t fix our climate problems for free, the price signal sent through a cap-and-trade system will drive low-carbon investments in the most inexpensive and efficient way possible.”

As a member of the U.S. Climate Action Partnership, Exelon helped U.S. Reps. Henry Waxman and Ed Markey frame the House-passed American Clean Energy and Security (ACES) climate bill. The utility also stands to gain from the extensive free emissions permits ACES would provide. A memo written in June by Bernstein Research for Exelon explains:

“If passed, John Rowe calculates the Waxman-Markey bill will add $700 to $750 million to Exelon's annual revenues for every $10 per metric ton (Mt) increase in the price of CO2 allowances. Such a revenue increase would contribute $0.67-$0.72 to earnings per share. Exelon estimates that the price of CO2 allowances, when the law takes effect in 2012, will range from $15 to $18/Mt, implying a positive earnings impact of $1.00 to $1.30 per share.”

The U.S. Chamber, however, has been pouring its member-supported resources into fighting the EPA and ACES, arguing that capping emissions would kill jobs and hurt the economy. While studies do show job losses in high-emitting industries, they also show a net jobs gain as the energy economy is reinvented in a low-carbon mold.

The Chamber is firm in its conservative position, spelling out among its climate goals: "Defeat proposed measures that are economically disruptive of business and industry activities," and "Resist ill-conceived climate change policies and measures that could severely damage the security and economy of the United States."

Several members have spoken up about the chamber's position. But the high-profile defections didn't start until this month, when the Chamber called for a trial-like hearing on the science of global warming. Chamber executive Bill Kovacs declared it would be the “Scopes monkey trial of the 21st century.”

Kovacs, the Chamber’s vice president for the environment, technology and regulatory affairs, later said his analogy was inappropriate, but he kept up the argument:

“We don’t think the evidence EPA set forth meets the legal criteria to support such a finding [that greenhouse gas emissions endanger the public health and welfare], and we think a judge would agree with us.”

Attachment	Size
Nike Letter-GCF.doc	44 KB
Nike Letter-NSI.pdf	102.7 KB
Exelon Memo-Bernstein Research.pdf	366.63 KB

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