Teri B.

baltimoresun.com
Obama's Exelon ties merit close look
Jay Hancock

January 25, 2008

Pay no attention to whether Sen. Barack Obama's ties to Exelon Corp. might make him sympathetic to storing nuclear waste in Nevada. That argument, aired before that state's Democratic caucuses last week, is a sideshow.

A bigger question is how Obama's Exelon links might influence his broader electricity policy at the most critical period for U.S. electricity since the 1930s. Exelon, the Illinois version of Baltimore's Constellation Energy, is one of the country's biggest megawatt producers, the largest nuclear plant operator and a huge Obama backer through its executives and employees.

Would a President Obama try to reform interstate electricity markets that have soaked consumers in Maryland and other deregulated states, inadequately invested in the future and unjustifiably enriched Exelon, Constellation and other companies? Or would he maintain the Bush administration's blind eye toward evidence of wholesale-electricity market failure, irregularity and price gouging?

Consumer groups say he had a great record of backing the little guy against utilities when he was in the Illinois Legislature. Obama's spokespeople talk a good game about what he would do in the White House. But money talks louder than words, and it's worth looking at his Exelon ties more closely.



Of course, other candidates have pocketed plenty of electric greenbacks.

People connected with Constellation, parent of Baltimore Gas and Electric, have given to most major presidential contenders - Democrat and Republican.

Constellation boss Mayo Shattuck gave $2,300 each to Republicans Mitt Romney and Rudolph Giuliani, according to a database kept by the Center for Responsive Politics.

Those associated with NRG Energy, another electricity giant, have given nearly $70,000 to Democrat Hillary Rodham Clinton.

But the Exelon-Obama link is especially strong. Exelon employees and others close to the company have given almost $195,000 to Obama, according to the latest records. Exelon is surpassed among corporate Obama donors by only Goldman Sachs, JPMorgan, Lehman Brothers and a couple of other companies, according to the Center for Responsive Politics.

One of Obama's biggest fundraising "bundlers," packaging money from multiple individuals, is Frank M. Clark, chairman of Commonwealth Edison, the big Illinois utility owned by Exelon. Exelon director John W. Rogers Jr., chief of mutual fund company Ariel Capital Management, also has given thousands to Obama.

There are other reasons to ask if an Obama administration might be too sympathetic to big electricity.

Last year Illinois Senate President Emil Jones, frequently described as Obama's mentor, single-handedly killed a bill that would have extended price caps for customers of Commonwealth Edison and other utilities.

When he was Bill Clinton's energy secretary, Obama campaign co-chair Federico Pena vigorously promoted electricity deregulation, promised it would save consumers money and - according to a 2002 story in The Washington Times - personally urged Enron crook Kenneth Lay to lobby the president on the matter.

Exelon's chief lobbyist, Elizabeth A. Moler, was Pena's deputy at the Energy Department.

As a new member of the Illinois Senate in 1997, Obama voted for an electricity-deregulation bill that his staff says was supported by consumer groups and was far less than what power providers wanted. Nevertheless, just as in Maryland, deregulation set the stage for price increases beyond what can be explained by higher costs for generation fuels such as coal and natural gas.

David Kolata, executive director of the Illinois Citizens Utility Board, which represents residential utility customers, praises Obama's record on electricity and other consumer issues.

"He was one of our strongest allies in Springfield," Kolata says. "I can't remember a time when he was not on our side."

Obama once crossed his mentor, Jones, to oppose a bill increasing what incumbent phone companies could charge competitors leasing their lines, Kolata said. Phone outfits lobbied heavily for the measure, and "almost all Senate Democrats were convinced or forced to vote for it," he said. "State Sen. Obama sided with the consumer on that."

To hear his spokespeople tell it, Obama thinks deregulation has gone too far and Washington has taken its eye off the ball.

"Obama believes that, due to a lack of oversight by the Federal Energy Regulatory Commission, consumers have unrightfully been forced to deal with high spikes in electricity prices," says spokesman Ben LaBolt. He also "supports stepping up regulation of utility companies," as well as increasing home-heating assistance with a windfall-profit tax on oil companies, LaBolt said.

Part of Obama's Exelon connection may demonstrate old-fashioned ethnic politics as much as corporate connections. Rogers and Clark are part of Illinois' black elite and would probably back Obama no matter what their business interests.

But the connections are there. The money is on the table, and the stakes are enormous. FERC, which regulates wholesale electricity, has repeatedly ignored allegations of price manipulation by Exelon and other generating companies, leaving states to do what they can.

Last year Illinois Attorney General Lisa Madigan accused Exelon and another company of overpricing electricity to achieve "a massive transfer of money" from consumers. Exelon agreed to pay an $800 million settlement.

"Five million Illinois residents are unnecessarily paying electricity prices that are double the actual cost of generating electricity and 40 percent higher than electricity prices in the wholesale electricity markets," Madigan complained. "Our investigation turned up disturbing evidence of price manipulation."

It's hard to imagine an Obama FERC including anybody like Lisa Madigan.

Teri B.

February 3, 2008
Nuclear Leaks and Response Tested Obama in Senate
By MIKE McINTIRE
When residents in Illinois voiced outrage two years ago upon learning that the Exelon Corporation had not disclosed radioactive leaks at one of its nuclear plants, the state’s freshman senator, Barack Obama, took up their cause.

Mr. Obama scolded Exelon and federal regulators for inaction and introduced a bill to require all plant owners to notify state and local authorities immediately of even small leaks. He has boasted of it on the campaign trail, telling a crowd in Iowa in December that it was “the only nuclear legislation that I’ve passed.”

“I just did that last year,” he said, to murmurs of approval.

A close look at the path his legislation took tells a very different story. While he initially fought to advance his bill, even holding up a presidential nomination to try to force a hearing on it, Mr. Obama eventually rewrote it to reflect changes sought by Senate Republicans, Exelon and nuclear regulators. The new bill removed language mandating prompt reporting and simply offered guidance to regulators, whom it charged with addressing the issue of unreported leaks.

Those revisions propelled the bill through a crucial committee. But, contrary to Mr. Obama’s comments in Iowa, it ultimately died amid parliamentary wrangling in the full Senate.

“Senator Obama’s staff was sending us copies of the bill to review, and we could see it weakening with each successive draft,” said Joe Cosgrove, a park district director in Will County, Ill., where low-level radioactive runoff had turned up in groundwater. “The teeth were just taken out of it.”

The history of the bill shows Mr. Obama navigating a home-state controversy that pitted two important constituencies against each other and tested his skills as a legislative infighter. On one side were neighbors of several nuclear plants upset that low-level radioactive leaks had gone unreported for years; on the other was Exelon, the country’s largest nuclear plant operator and one of Mr. Obama’s largest sources of campaign money.

Since 2003, executives and employees of Exelon, which is based in Illinois, have contributed at least $227,000 to Mr. Obama’s campaigns for the United States Senate and for president. Two top Exelon officials, Frank M. Clark, executive vice president, and John W. Rogers Jr., a director, are among his largest fund-raisers.

Another Obama donor, John W. Rowe, chairman of Exelon, is also chairman of the Nuclear Energy Institute, the nuclear power industry’s lobbying group, based in Washington. Exelon’s support for Mr. Obama far exceeds its support for any other presidential candidate.

In addition, Mr. Obama’s chief political strategist, David Axelrod, has worked as a consultant to Exelon. A spokeswoman for Exelon said Mr. Axelrod’s company had helped an Exelon subsidiary, Commonwealth Edison, with communications strategy periodically since 2002, but had no involvement in the leak controversy or other nuclear issues.

The Obama campaign said in written responses to questions that Mr. Obama “never discussed this issue or this bill” with Mr. Axelrod. The campaign acknowledged that Exelon executives had met with Mr. Obama’s staff about the bill, as had concerned residents, environmentalists and regulators. It said the revisions resulted not from any influence by Exelon, but as a necessary response to a legislative roadblock put up by Republicans, who controlled the Senate at the time.

“If Senator Obama had listened to industry demands, he wouldn’t have repeatedly criticized Exelon in the press, introduced the bill and then fought for months to get action on it,” the campaign said. “Since he has over a decade of legislative experience, Senator Obama knows that it’s very difficult to pass a perfect bill.”

Asked why Mr. Obama had cited it as an accomplishment while campaigning for president, the campaign noted that after the senator introduced his bill, nuclear plants started making such reports on a voluntary basis. The campaign did not directly address the question of why Mr. Obama had told Iowa voters that the legislation had passed.

Nuclear safety advocates are divided on whether Mr. Obama’s efforts yielded any lasting benefits. David A. Lochbaum of the Union of Concerned Scientists agreed that “it took the introduction of the bill in the first place to get a reaction from the industry.”

“But of course because it is all voluntary,” Mr. Lochbaum said, “who’s to say where things will be a few years from now?”

Others say that turning the whole matter over to the Nuclear Regulatory Commission, as Mr. Obama’s revised bill would have done, played into the hands of the nuclear power industry, which they say has little to fear from the regulators. Mr. Obama seemed to share those concerns when he told a New Hampshire newspaper last year that the commission “is a moribund agency that needs to be revamped and has become a captive of the industry it regulates.”

Paul Gunter, an activist based in Maryland who assisted neighbors of the Exelon plants, said he was “disappointed in Senator Obama’s lack of follow-through,” which he said weakened the original bill. “The new legislation falls short” by failing to provide for mandatory reporting, said Mr. Gunter, whose group, Beyond Nuclear, opposes nuclear energy.

The episode that prompted Mr. Obama’s legislation began on Dec. 1, 2005, when Exelon issued a news release saying it had discovered tritium, a radioactive byproduct of nuclear power, in monitoring wells at its Braidwood plant, about 60 miles southwest of Chicago. A few days later, tritium was detected in a drinking water well at a home near the plant, although the levels did not exceed federal safety standards.

At least as disturbing for local residents was the revelation that Exelon believed the tritium came from millions of gallons of water that had leaked from the plant years earlier but went unreported at the time. Under nuclear commission rules, plants are required to tell state and local authorities only about radioactive discharges that rise to the level of an emergency.

On March 1, Mr. Obama introduced a bill known as the Nuclear Release Notice Act of 2006. It stated flatly that nuclear plants “shall immediately” notify federal, state and local officials of any accidental release of radioactive material that exceeded “allowable limits for normal operation.”

To flag systematic problems, it would also have required reporting of repeated accidental leaks that fell below those limits. Illinois’ senior senator, Richard J. Durbin, a fellow Democrat, was a co-sponsor, and three other senators, including Hillary Rodham Clinton, Democrat of New York, later signed on. But Mr. Obama remained its primary champion.

In public statements, Mr. Obama dismissed the nuclear lobby’s arguments that the tritium leaks posed no health threat.

“This legislation is not about whether tritium is safe, or at what concentration or level it poses a threat,” he said. “This legislation is about ensuring that nearby residents know whether they may have been exposed to any level of radiation generated at a nuclear power plant as a result of an unplanned, accidental or unintentional incident.”

Almost immediately, the nuclear power industry and federal regulators raised objections to the bill.

The Nuclear Energy Institute jumped out in front by announcing its voluntary initiative for plant operators to report even small leaks. An Exelon representative told an industry newsletter, Inside N.R.C., that Exelon was “working with Senator Obama’s office to address some technical issues that will allow us to support the legislation.”

Last week, an Exelon spokesman, Craig Nesbit, said the company sought, among other things, new language to specify what types of leaks should be reported, and assurance that enforcement authority remained with the nuclear commission and not state or local governments.

“We were looking for technical clarity,” Mr. Nesbit said.

Meanwhile, the nuclear commission told Mr. Obama’s staff that the bill would have forced the unnecessary disclosure of leaks that were not serious. “Unplanned releases below the level of an emergency present a substantially smaller risk to the public,” the agency said in a memorandum to senators, which ticked off about a half-dozen specific concerns about the bill.

Senate correspondence shows that the environment committee chairman at the time, Senator James M. Inhofe, Republican of Oklahoma who is a strong supporter of industry in battles over energy and environmental legislation, agreed with many of those points and held up the bill. Mr. Obama pushed back, at one point temporarily blocking approval of President Bush’s nominee to the nuclear commission, Dale E. Klein, who met with Mr. Obama to discuss the leaks.

But eventually, Mr. Obama agreed to rewrite the bill, and when the environment committee approved it in September 2006, he and his co-sponsors hailed it as a victory.

In interviews over the past two weeks, Obama aides insisted that the revisions did not substantively alter the bill. In fact, it was left drastically different.

In place of the straightforward reporting requirements was new language giving the nuclear commission two years to come up with its own regulations. The bill said that the commission “shall consider” — not require — immediate public notification, and also take into account the findings of a task force it set up to study the tritium leaks.

By then, the task force had already concluded that “existing reporting requirements for abnormal spills and leaks are at a level that is risk-informed and appropriate.”

The rewritten bill also contained the new wording sought by Exelon making it clear that state and local authorities would have no regulatory oversight of nuclear power plants.

In interviews last week, representatives of Exelon and the nuclear commission said they were satisfied with the revised bill. The Nuclear Energy Institute said it no longer opposed it but wanted additional changes.

The revised bill was never taken up in the full Senate, where partisan parliamentary maneuvering resulted in a number of bills being shelved before the 2006 session ended.

Still, the legislation has come in handy on the campaign trail. Last May, in response to questions about his ties to Exelon, Mr. Obama wrote a letter to a Nevada newspaper citing the bill as evidence that he stands up to powerful interests.

“When I learned that radioactive tritium had leaked out of an Exelon nuclear plant in Illinois,” he wrote, “I led an effort in the Senate to require utilities to notify the public of any unplanned release of radioactive substances.”

Last October, Mr. Obama reintroduced the bill, in its rewritten form.

Kanadesaga

Unfortunately, if we are to disqualify every politician with corporate ties, there will be no one serving in Congress today, or ever. That is an unfortunate reality in today's world. I wish there was no corporate influence, I would fight hard to eradicate it, but to expect it from a candidate, you have to run ordinary citizens , not lawyers, not executives, and not career politicians.

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"..., because hope don't park the motherfucking car."

Teri B.

I agree 100%. I'm just looking for some balance here.

Jonesy

To some, this is Black History Month; to others, it is Valentine's day month; to me, it is Mardi Gras month. It is possible, 11 years ago, Lauren played a girl-scheme assuming I would realize it was Valentine's day. In her left-brain way, she failed to calculate the fact I am from New Orleans. To me, February is neither black history month nor Valentine's day month... it is Mardi Gras month .

EvilMonkey

Actually, you are reaching. Having fun Googling for all of this stuff to offer "balance"?

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Barack Obama - Get the facts at BarackObamaWatch.com

Teri B.

Actually, I read about this on Edwards' website and got the link there. There are two sides to this election, even though only one is overwhelming presented here.

Kanadesaga

I understand that, but Hillary has been around power a lot longer than Obama, she is bound to have more dealings than him. She is bound to owe more favors than him. That is just the nature of the beast.

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"..., because hope don't park the motherfucking car."

ThetaBurst

LOL

ThetaBurst

LOL

I hope you don't do discovery for that law firm you work for.