NY Times Discovers Obama's Favorite Utility

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John Rowe photoAttentive NLPC readers were aware of the extent of Exelon Corporation’s activism to gain regulatory favor in support of “green” policies in which it reaped millions of dollars in government grants and mandates, but last week’s lengthy New York Times article about the cronyism-tainted relationship between the Chicago-based utility and the Obama administration revealed a few nuggets.

The story told how Exelon, with top executives as “early and frequent” supporters of the president as his political career ascended, were able to gain more access to the White House than others thanks to their longstanding relationships. According to one Exelon lobbyist, his employer was considered “the president’s utility.”

“White House records show that Exelon executives were able to secure an unusually large number of meetings with top administration officials at key moments in the consideration of environmental regulations that have been drafted in a way that hurt Exelon’s competitors, but curb the high cost of compliance for Exelon and its industry allies,” wrote Times reporter Eric Lipton. 

With the Obama administration’s emphasis to reduce carbon dioxide emissions, pursue cap-and-trade, and steer billions of dollars in stimulus funds to renewable energy schemes, Exelon was already a natural ally for the regime. Recently retired CEO John Rowe (in photo) – as he explained in a Nov. 2009 speech in Chicago – had worked on the issue since 1992 when he testified before Congress in favor of a carbon (dioxide) tax, “When there was no immediate economic benefit to my company, which was largely coal-based.” Over the previous decade Rowe said his company had sold “most of our inefficient fossil fuel plants” and invested $5 billion in nuclear reactors. Today Exelon owns the largest nuclear fleet in the nation, the third-largest in the world, has 20 percent of the total U.S. nuclear capacity, with approximately 93 percent of its electricity generation coming from nuclear. 

The Times article noted the obvious. 

“The administration’s tightening of clean air rules was a particular boon,” Lipton wrote, “since it took aim at Exelon’s main competitors — coal-burning power plants in the Midwest and mid-Atlantic regions. In 2010, Exelon estimated it would earn an extra $400 million annually because the regulations would force dozens of coal-burning plants to close.”

Yes, either they would close, or the new regulations would cause their costs to “necessarily skyrocket,” putting him squarely in partnership with President Obama. “If the EPA regulations are enforced, the oldest coal plants are likely to go…,” Rowe told National Journal in November, “…We make some money, because our power prices go up. We don’t hide that.”

Rowe also told American Enterprise Institute in a March 2011 speech that he supported cap-and-trade because “the science of climate change is real” and because “it offered my company a way to improve its earnings and profit from its cleaner power.” Meanwhile Exelon threw considerable money into its lobbying efforts, averaging over $4 million in expenditures over the last five years, according to the Center for Responsive Politics.

Rowe’s anti-greenhouse gas ambitions so impressed President Obama that the administration enlisted him to lobby Congress on the issue. The Natural Resources Defense Council called him “the single most important figure in the utility industry” on climate change, and he removed Exelon’s membership from the U.S. Chamber of Commerce because of it’s “stridency against carbon (dioxide) legislation,” according to USA Today.

With Exelon’s profit-making motives from regulatory partiality well established, the New York Times laid out some details of President Obama’s political relationships with the utility. When Obama was in the Illinois State Senate he became friends with an Exelon lobbyist, Frank Clark, and company employees became big supporters of his U.S. Senate campaign. The newspaper reported that Exelon employees have donated at least $395,000 to Obama’s federal campaigns.

More specifically, the president is a close friend of Exelon board member John Rogers, Jr., who is one of his biggest bundlers and has hosted several fundraisers. Another bundler, William Von Hoene, Jr., oversees Exelon’s legal and lobbying efforts.

Rowe and Exelon certainly had more-than-adequate access to the White House, according to the Times’ analysis of visitor records. Before his retirement Rowe visited eight times, “far more than chief executives of coal-centered companies like American Electric Power that were fighting parts of the rules that Mr. Rowe was supporting.” AEP sought a delay to comply with the rules, but Exelon’s message was, “Now’s the time to make this happen.”

Exelon also sought mercy on proposed water regulations, which would have affected its nuclear fleet after the disaster in Japan, and emails obtained by the Times indicated changes that were made to the rule coincided with “unusual access” that was enjoyed by the utility.

The coziness between Exelon and the White House also may have been a factor in winning a $646 million stimulus loan for a project with its partner First Solar, for a giant facility in Southern California. 

“The project…,” the Times reported, “…is so heavily subsidized by federal and local governments that Exelon expects it will be reimbursed for all its upfront money by 2015.” 

Despite the taxpayer largess, the solar farm in the Antelope Valley region has been marred by layoffs and problems with permits, as NLPC has reported. That Exelon even got involved on the project shows it was only interested in the subsidies and not its value in generating electricity, as Rowe is on the record as a wind and solar skeptic. “A dinosaur cannot save itself from extinction by mating with a rodent,” he told the Chicago News Cooperative in February, explaining why Exelon has not invested more aggressively in renewables.

There are other ties between the Obama administration and Exelon that the New York Times brought up but are not new, such as strategist David Axelrod’s former consultancy with the company and Rahm Emanuel’s role in the creation of Exelon as the result of a merger, when he was an investment banker. Emanuel, now mayor of Chicago, was the president’s first chief of staff.

Especially considering what Obama said while campaigning in 2007, the level of cronyism is astounding. As columnist Michelle Malkin wrote last week:

“In 2007, candidate Obama decried ‘the cynics, the lobbyists, the special interests who’ve turned our government into a game only they can afford to play.’ He indignantly singled out ‘the best bundlers’ who get the ‘greatest access’ to power.”

It would be nice if the New York Times and their fellow “media lapdoggies” (Malkin’s term) called attention to that generous portion of hypocrisy in the White House, but don’t count on it. 

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.