Chicago-based utility Exelon Corp. expects that Waxman-Markey will boost its profits by $1.1 billion (39 percent), according to a report in Restructuring Today (July 13).
Because of its nuclear fleet, the largest in the U.S., Exelon will have plenty of carbon credits to sell to other emitters.
Exelon is trying to exploit its potential Waxman-Markey boon in its efforts to acquire Princeton, NJ-based NRG Energy, which is expected to spend $1.3-2.3 billion to reduce its carbon emissions under Waxman-Markey and which opposes the takeover.
In a letter to NRG shareholders, Exelon said:
We are offering you securities in a company… whose value rises rather than declines as carbon is priced into the marketplace…
Ironically, both Exelon and NRG are members of USCAP, the industry-environmentalist coalition lobbying for greenhouse gas regulation.
So not only will Waxman-Markey cut into fossil fuel-based NRG’s profits, it may very well mean the end of the company.
It makes you wonder what NRG CEO David Crane was thinking when he joined USCAP. If he thought that it’s better-to-be-at-the-table-than-on-the-menu, he was wrong since now he has two problems (carbon regulation and takeover) instead of one or even none.
BTW, if you want to see which regions of the country will be paying more for electricity thanks to David Crane’s bad judgment, click here for a list of NRG’s generation facilities in Texas, the Northeast, South and Southern California.