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Killing coal for profit

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By Ed Lasky
Sunday, June 19, 2011
 

Barack Obama does keep a few campaign promises. Among those seem to be his pledge to bankrupt plants that burn coal -- a plan he admitted to early in 2008.

If his plans succeed, Obama will live up to his boast that electricity prices will "necessarily skyrocket" under his administration since coal is cheap and most alternatives are expensive.

Regardless of the peril this poses to utilities and coal-mining jobs, Obama has been on a quest to kill carbon as a fuel source. He tried and failed to do so using the cap-and-trade gambit. Now, his Environmental Protection Agency is trying to impose regulations that would cripple many coal-burning plants.

If coal-burning utilities are forced to install pollution-control equipment or close coal-fired plants, consumers will see prices for electricity jump an estimated 40 percent to 60 percent in the next few years.

But a few will benefit considerably from the president's plans. Who can forget Obama's dictum that politics is about punishing one's enemies and rewarding one's friends?

Who among Obama's friends will benefit as the EPA continues to put a stranglehold on many of our power producers?

One big beneficiary will be Exelon, the Chicago utility giant whose generating base relies on relatively cheap nuclear power. CEO John Rowe recently noted that each $50 per megawatt-day change in prices translates into an additional $350 million in revenue for his company.

As competitors are forced to boost prices to consumers, Exelon will go along for the ride -- a profitable one, given that it can benefit from the spread between the high prices and relatively low costs.

It was just a few years ago that Rowe decided to phase out coal-burning plants and invest in nuclear power. He also decided to invest in politics. Among the beneficiaries blessed with Exelon's dollars are friends and political allies of Barack Obama.

First up to the trough was Chicagoan David Axelrod, Obama's campaign strategist and, later, chief domestic policy adviser in the White House. His agency, ASK Public Strategies, a few years ago created an "astroturf" (i.e., fake) organization for Commonwealth Edison, part of the Exelon empire.

The group supported proposals to allow Com Ed to charge consumers more for electricity under the guise that it would improve service. Com Ed won and got a boost to its bottom line -- as did ASK and Axelrod. According to a 2008 BusinessWeek article, Com Ed had been an Axelrod client since 2002.

Then there is Rahm Emanuel, the recently elected mayor of Chicago who for years had been a political ally of Obama and later served as his chief of staff. Emanuel also passed through the revolving door that Obama promised to lock when he won the presidency.

After Emanuel left the Clinton White House and as his political plans jelled, he became an "investment banker" for a brief period despite no previous experience in the industry. But who needs experience when you know how to work a Rolodex and call in favors?

Exelon is a utility that grew by merger. The biggest deal was the takeover of PECO, the Philadelphia utility. Who did Rowe hire to broker the deal• Rahm Emanuel, who was paid $16.2 million for his labor over a brief two-year career as an investment banker.

Obama learned a lot about rewarding friends while practicing politics in Cook County.

Ed Lasky is news editor of American Thinker (americanthinker.com). L. Brent Bozell III is off today.

 

 
 


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