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How Big Utilities’ Climate Pledges Fall Short

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Can a utility company be carbon neutral by 2050 if it builds a gas plant now? Maybe if it shuts off the gas plant well before its 40 years of useful life are complete, leaving electric customers to pay off millions in debt.

For this episode of the Local Energy Rules podcast, host John Farrell speaks with John Romankiewicz, Senior Analyst for the Sierra Club’s Beyond Coal Campaign. Romankiewicz and the Sierra Club released a report in January scoring utilities on their plans to transition from fossil fuels to clean power. Farrell and Romankiewicz discuss how utilities are doing far too little to retire coal, replace it with renewable energy generation, and fulfill their promises. The two had the conversation for a recent episode of ILSR’s Building Local Power podcast, republished here for Local Energy Rules.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Episode Transcript

With Great Power Comes Great Responsibility

US electric utilities were granted monopoly control because building competing sets of delivery wires in one area would be costly, wasteful, and would have delayed electrification. This market dominance, because it was granted with the condition of state oversight, then comes with a responsibility to customers, and as a result, a responsibility to the climate.

“As much as utilities don’t like to move too fast, unfortunately the burden really rests on them, and everyone is looking to them to do something ambitious in this critical moment.”

Utilities are meeting their responsibility with ‘net zero’ and ‘carbon-free’ pledges, but are they holding to their promises?

Romankiewicz and the Sierra Club’s Beyond Coal campaign track utility clean energy commitments and whether they correspond with utility resource planning (in most cases, they don’t). To present this information to the public, the Sierra Club has released The Dirty Truth About Utility Climate Pledges.

Grading Utilities on their Climate Action

The Sierra Club describes The Dirty Truth report as “a comprehensive assessment of whether utilities are committing to the actions needed to avert a cataclysmic climate crisis.” The report grades utility plans for the next decade on a scale from A to F.

Many utilities have made clean energy pledges with a target date of 2050 — nearly 30 years away, says Romankiewicz. Meanwhile, their energy resource plans only account for the next 15 years. Romankiewicz is interested in the steps that utilities are taking now, rather than lofty goals with no implementation plan.

The 79 companies analyzed in the report “account for 68 percent of the remaining coal generation in the United States.” Together, they only plan to retire 25 percent of that coal by 2030. The utilities also plan to build 36 gigawatts of new gas this decade, but only 100 gigawatts of new clean energy, says Romankiewicz. He predicts that to reach carbon neutrality and avoid climate disaster, the U.S. should install 400 to 500 gigawatts of renewable generation capacity by 2030.

The report also evaluates utilities on their energy efficiency investments – which are critical for reducing energy burden and increasing equity. Romankiewicz believes that two percent of retail sales should be the minimum for utility energy efficiency investment. Altogether, the utility companies studied only invest 0.7 percent of their retail sales in energy efficiency improvements.

We’re Way Beyond Coal

Coal-fired power isn’t cost effective. This is not news; no one has built a coal plant in the United States since 2013. Furthermore, regulated utilities are wasting billions of dollars by ‘self-scheduling’ when to employ existing coal plants. Given the security of a captive customer base, monopoly utilities can carelessly dispatch coal “more often than is dictated by market conditions.”

To prevent further losses, Romankiewicz asks utility regulators to step up to the plate for coal plant retirement — protecting the interests of consumers, rather than utility shareholders.

“Billions of dollars are being wasted just in terms of… you’re just operating the coal units way too much. And customers are getting pinned with those costs at the end of the day.”

Coal plants have disproportionately burdened low-income communities and communities of color with their toxic emissions. Retiring coal plants now would prevent additional damage to our climate and ease additional burden on these same communities, which are especially vulnerable to the impacts of climate change.

Doing the Same Thing & Expecting a Different Result

Often described as a ‘bridge fuel,’ gas-fired electricity generation faces…

Read More: How Big Utilities’ Climate Pledges Fall Short

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