Democrats’ proposed Clean Electricity Performance Program (CEPP) is dead or on life support, doomed by Sen. Joe Manchin’s (D-W.Va.) opposition, according to numerous news reports over the weekend.

The CEPP, which would reward utilities that exceed emission reductions of 4% annually and penalize laggards, has been widely described as the “linchpin” of President Biden’s climate plan. News of its demise, coming just two weeks before the U.N.’s COP26 climate talks in Glasgow, had some environmentalists in despair.

But others said the $150 billion program would be bad policy and insisted its loss would not necessarily doom the Biden administration’s pledge to reduce U.S. greenhouse gas emissions to 50% below 2005 levels by 2030. They said  efforts to decarbonize the power sector will continue, thanks to federal tax credits and supportive state policies.

“The CEPP is overshadowing the real star proposal”: about $300 billion to extend existing tax credits for utilities, commercial businesses and homeowners that use or generate electricity from zero-carbon sources, The Economist wrote.

CEPP: One-third of Reductions?

An analysis this month by Energy Innovation: Policy and Technology, an energy and environmental policy firm, said the most powerful emission-reduction provisions in the bipartisan infrastructure bill and the broader legislation Democrats hope to pass on party-line votes (referred to as the “infrastructure bills”) “is the combination of clean energy tax credits and the Clean Electricity Performance Program, which drives the power sector to 70 to 85% clean energy.”

The group said its modeling “underscores how important the CEPP is to achieving deep power sector decarbonization. Without it, emissions are likely to be 250 to 700 MMT higher per year in 2030, which could eliminate more than a third of the total emissions reductions under the infrastructure bills.”

“This is absolutely the most important climate policy in the package,” Leah Stokes, a climate policy expert advising Senate Democrats, told The New York Times, which reported Friday that CEPP was dead.

David G. Victor, co-director of the Deep Decarbonization Initiative at the University of California, San Diego, said both carrots (tax incentives) and sticks (penalties) are needed to clean up electric generation. “You need not just to deploy new stuff, but a way to retire old stuff,” he told The Wall Street Journal. “The combination of the two is key.”

The news had some proposing Hail Mary passes to save the program. “Time to make a deal with [U.S. Sens. Susan] Collins [R-Maine] and [Lisa] Murkowski [R-Alaska] to carve out the CEPP to get to 50 votes,” suggested author Herb Simmens.

Manchin was unapologetic.

“Sen. Manchin has clearly expressed his concerns about using taxpayer dollars to pay private companies to do things they’re already doing,” Manchin’s office said in a statement. “He continues to support efforts to combat climate change while protecting American energy independence and ensuring our energy reliability.”

West Virginia Coal, Gas Ties

Many of those weighing in about CEPP’s demise on Twitter took note of Manchin’s financial and political ties to the coal and natural gas industries. West Virginia ranks second in coal and seventh in natural gas production among the 50 states. Enersystems, a coal brokerage Manchin founded in 1988 and now run by his son, represents 30% of his net worth. He reported $491,949 in dividend income from the company in 2020, 71% of his total investment income.

But others said Manchin had valid policy concerns.

“The media narrative that [Manchin] is single handedly blocking the president’s agenda is absurd and unfair,” tweeted former FERC Chair Neil Chatterjee. “There are FIFTY other U.S. senators who strongly oppose this legislation.”

“CEPP was a lucrative giveaway for utilities to consolidate their monopoly power and generouslyyyyy incentivize already cost-effective generation,” tweeted Maggie Clark, director of government affairs for Pine Gate Renewables, a North Carolina-based company that does project development and strategic financing of utility-scale solar and storage projects.

“A clean energy standard as traditionally designed is one thing. Crafting that policy to fit under reconciliation parameters led to progressives rallying around a government giveaway as the magic solution to climate change. Come on,” she said. “Clean energy wins on price today. The barrier to widespread adoption is inadequate infrastructure. Take every dollar away from CEPP and put it towards grid upgrades and then we’re getting somewhere.”

Others noted that in addition to the clean energy tax credits, the Democratic bill also includes $32 billion in tax credits to encourage the purchase of electric vehicles, $13.5 billion for electric car charging stations, $9 billion to update the electric grid and $17.5 billion to reduce carbon dioxide emissions from federal buildings and vehicles.

“Clean energy tax credits are nothing to sneeze at,” tweeted Robin Dutta, who works on market development and policy in the federal affairs staff of rooftop solar company SunPower. “And might be more effective than whatever CEPP could do.”

“Despite the attention paid to it, CEPP is actually less potent as a greenhouse-gas slayer than those boring tax credits, which are less controversial because they do not overtly penalize coal or gas,” The Economist reported.

“Two energy veterans, one at a top renewables lobbying outfit and the other at a fossil-heavy utility, agree that the tax credits would sharply boost investment in low-carbon technologies,” it said. “That is because they improve the current setup by replacing stop-go uncertainty with a predictable long-term tax regime and make tax breaks ‘refundable’ rather than needing to be offset against tax liabilities, meaning even utilities that do not have such tax liabilities can enjoy them as freely as cash in the bank.”

In addition, more than half the states are implementing their own climate policies. Twenty-six states, representing 61% of the U.S. economy, have joined the U.S. Climate Alliance, which was created after former President Donald Trump announced the U.S. would withdraw from the Paris Agreement.

CEPP Vital Signs Waning

The Times reported that Manchin, chairman of the Senate Energy and Natural Resources Committee, was considering a clean electricity program that would reward utilities for switching from coal to natural gas. But last week, it said, Manchin told the White House he was completely opposed to a clean energy program.

CNN reported that it will “likely be dropped,” and Bloomberg reported it had confirmed the Times’ report.

“Per a person familiar, while a final decision hasn’t been made, without Manchin’s support there isn’t a path forward for the climate program,” Bloomberg’s Ari Natter tweeted.

The Journal reported the program was “is in danger of falling out” of the Democrats’ bill.

The Washington Post reported: “White House officials have not decided to completely jettison the CEPP but are instead looking at how to make changes that would ensure Manchin’s support for the broader economic package.”

“It’s not dead yet, per people familiar, but it’s struggling to stay in the talks given Manchin’s opposition,” tweeted POLITICO’s Zack Colman, who reported Wednesday that Democrats and the White House were discussing ways to amend the CEPP to allow natural gas and coal power plants with carbon capture to participate. “The changes I reported Wednesday are part of what’s being explored to bring Manchin to the table, but this latest reporting suggests the needle hasn’t moved.”

Manchin has recently expressed doubts about the viability of carbon capture. “It’s so darn expensive that it makes it almost impossible,” he said last month.

Legislative Scramble as COP26 Approaches

Progressive Caucus Chair Pramila Jayapal told MSNBC on Saturday that “there’s no decisions that have been made. The negotiations are continuing.

“We understand that we have to get 50 senators on board and that Sen. Manchin obviously has a very big role to play on this,” she said. “We’re open to that negotiation as long as we have strong climate protections that bring down carbon emissions. That’s the discussion that’s under way right now.”

The Post reported Saturday that White House officials are “still looking at whether they can preserve the clean energy program by providing a way for coal and natural gas plants to keep operating for longer.” It said another idea being considered was a voluntary emissions trading system among aluminum, steel, concrete and chemicals manufacturers that would provide federal funding to help them reduce emissions.

Earlier last week, Special Presidential Envoy for Climate John Kerry suggested Biden’s position at the COP26 talks beginning Oct. 31 would be weakened by the lack of a climate deal with Congress. Failure to pass such legislation “would be like President Trump pulling out of the Paris Agreement again,” he told the Associated Press.

On Friday night, Biden called Kerry’s comments “a little hyperbole.”

“It’d be good to have agreement on the climate piece, but we’re going to get the climate piece,” he said.