In Anticipating EPA Plan, States Can Follow Examples of Neighbors
While debate rages on about the Environmental Protection Agency’s proposed Clean Power Plan aimed at reducing greenhouse gas pollution from existing U.S. power plants, it’s important to take a look at what is already working around the country from the standpoint of clean energy deployment.
A recent report produced by Ceres, a nonprofit group that mobilizes business and investing leaders to address climate change and other global sustainability issues, looked at how 32 of the country’s largest electric utility holding companies — providing 70 percent of the nation’s power — are doing at delivering renewable energy and energy efficiency, two key building blocks of the Clean Power Plan.
The findings may not be shocking, but they are instructive and relevant to states as they consider their own approaches for meeting the EPA’s proposed goals.
The report shows wide disparities in how much renewable energy and energy savings utilities are providing. It also shows that strong state policies play an important role in enabling them to meet customers’ clean energy needs.
With renewable energy, five electric utility holding companies — Xcel Energy, PG&E, Edison International, Berkshire Hathaway Energy and Duke Energy — delivered an impressive 60 million megawatt hours in 2012, enough clean energy to power nearly 6 million homes.
The fact that two California utilities are among those five is not surprising. What is somewhat surprising is having companies like Xcel, Berkshire and Duke — with customers in Colorado, Iowa, Michigan, Minnesota, North Carolina, Utah and Wisconsin — cracking the list.
These states have all set goals for sourcing more renewable energy, showing that there’s a strong correlation between forward-thinking clean energy policies and utilities that are delivering the most to their customers.
While some continue to claim that renewable energy is too expensive, a recent National Renewable Energy Laboratory report estimates that such projects have added only about 1 percent to electricity costs across the country. That’s well below the cost-containment caps that most state legislatures have adopted. Meanwhile, renewable energy project costs continue to drop at a rapid pace.
Energy efficiency is showing even more value. For 2012 alone, electric utilities helped customers save a cumulative total of 140 million megawatt hours, enough to power nearly 13 million homes. Those savings are happening in coastal states like California, Massachusetts and Oregon, but also in interior states such as Colorado, Minnesota, Arizona and Michigan. These states have all set energy efficiency goals, incentivize their utilities to achieve them, and continue to find that it costs far less money to save energy than it does producing it (oftentimes, by needing to build new power plants).
The EPA recognizes that these energy efficiency programs are delivering results and is encouraging states to include them as part of their compliance plans, which will be due in 2016.
Many of these states are also recognizing how clean energy can be a positive driver for competitiveness and economic development. Another recent Ceres report shows that 53 of the Fortune 100 companies have specific clean energy goals, and that access to clean energy is becoming an increasingly important factor in their decisions to site new facilities, including data centers and manufacturing plants.
All of these trends, collectively, explain why Warren Buffet recently announced plans to double his $15 billion investment in wind and solar energy over the next decade.
Like Buffet, many states are doubling down on their clean energy policies, recognizing that they can both reduce risks and costs for their residents and businesses. Indeed, Northeast states involved in the Regional Greenhouse Gas Initiative have showed that they can use market-based mechanisms to reduce carbon pollution and use the revenue to invest in renewable energy projects and utility energy efficiency programs. Those states are expected to adapt their programs to ensure that it meets EPA’s new proposal. But for some states like Michigan and Ohio, which are actively reconsidering their clean energy goals and targets, it would make sense to align their goals with the expectations of the Clean Power Plan.
The bottom line: As state policymakers and voters grapple with specific approaches for meeting the EPA’s proposal for reducing carbon emissions and increasing clean energy, they should pay close attention to the two-dozen states — in all corners of the country — that are already seeing wide-ranging financial and environmental benefits from proactive clean energy policies.
Dan Bakal is director of electric power at Ceres, a nonprofit group mobilizing business and investor leadership on climate change and other global sustainability challenges. Readers may send the author email at email@example.com.