In response to this article, Exelon's CEO and president Chris Crane sent National Journal this letter on Monday, December 17, 2012.
A CEO of a major utility is skipping an industry-wide fly-in on dividend taxes to instead lobby lawmakers to oppose the production tax credit for wind energy.
CEOs of six of the country’s biggest utilities, including coal-based American Electric Power and renewable-energy developer NextEra, will meet on Wednesday with lawmakers and the White House to urge fiscal-cliff negotiators to not allow the tax rate on dividends to go up at year’s end as scheduled.
Absent from this latest eleventh-hour fly-in is Christopher Crane, CEO and president of Chicago-based Exelon. But he’s still coming to Washington.
“Chris is going to be otherwise engaged tomorrow,” David Brown, a top lobbyist for Exelon, told National Journal on Tuesday. “We’re going to have him in Washington working on the PTC.”
Since at least August, Exelon has been publicly and aggressively lobbying Congress to not extend the PTC, which will expire at year’s end unless Congress acts. The Edison Electric Institute, the country’s largest investor-owned utility trade group of which Exelon is a member, signed a letter of support for the PTC in 2011. Ever since Exelon started to more loudly vocalize its opposition to the subsidy, EEI has gone silent on the issue and instead focused almost exclusively on the dividend tax rate.
John Rowe, who retired as CEO from Exelon earlier this year, said Crane’s focus on the PTC is spot on.
“I think Chris has his priorities in exactly the right place,” Rowe told National Journal in an interview on Tuesday.
Exelon’s reasoning for lobbying against the PTC is that the subsidy distorts the electricity market, especially in areas where Exelon is heavily focused, like the Midwest and Texas. This in turn creates artificially low electricity prices that hurt Exelon’s bottom line.
“I think market interventions including the PTC are a bigger issue for Exelon than even the dividend tax,” Rowe said. “The utility industry is so united on the dividend it doesn’t need Exelon’s voice all that much.”
Brown, Exelon’s lobbyist, told National Journal that Exelon’s employees have been among the most involved in EEI’s campaign to lobby Congress on the dividend tax rate.
Utilities of all kinds—including natural gas, nuclear power, coal, and renewables-based—are united in their position that Congress should not allow the tax rate on dividends to go up at the end of the year as scheduled. If it does, the top rate would almost triple to about 40 percent. EEI member companies assert that such an increase would depress share values and hurt investors at every income level, including seniors who have been highlighted in the industry’s “Defend My Dividend” advertisements.