- Industry: Energy & Utilities
On August 3rd, President Obama and EPA announced the long-awaited Clean Power Plan. The finalized rule comes after nearly a year-long public comment period over which time four million comments were filed. Many stakeholders, from electric utilities, to state governments, nonprofits, private companies, and concerned citizens are expected to be impacted by the CPP and submitted formalized comments to the EPA. While the CPP will touch many industries, electric utilities and power plant owners will be the ones undergoing transformations to ensure compliance with state plans. Utility responses to the new rule have been issued in spades over the last week, with positions ranging from enthusiastic to unsupportive. This range can be seen across the nation’s 10 largest investor owned electric utilities (based on market value), whose individual stances have been outlined below.
Duke Energy – The day the final rule was released, Duke Energy’s President and CEO Lynn Good published a formal announcement on its website, stating “This ambitious plan seeks to build on the substantial progress Duke Energy and other utilities have made to reduce our environmental footprint. Even without federal regulations, our company has reduced carbon dioxide emissions from our power plants by 22 percent since 2005. As we continue to move to a lower carbon future, we will also continue to work constructively with states to identify customer solutions that preserve the reliability and affordability that our communities expect. As we continue to modernize our system, energy diversity will be important – nuclear, natural gas, state-of-the-art coal, hydro, renewables, energy efficiency and energy storage.”
NextEra – Next Era was also quick to respond to the final rule. Chief Executive Officer Jim Robo said during a recent earnings conference call, “There is no question that today’s announcement is positive for renewables and it will be positive in the long term for the renewable business at NextEra.”
Dominion Resources – The White House reported the following statement from Dominion Chairman, President and CEO Thomas F. Farrell II: “The compliance targets for Virginia have moved in a positive direction that fairly recognizes the role of natural gas generation in reducing emissions. Dominion will work constructively with Governor McAuliffe, the state agencies, and other stakeholders on a compliance plan that has our customers as the first priority, ensures reliability, and maintains a diverse mix of electric generation. I commend Administrator McCarthy for making critical changes to the proposed rule.”
Southern Company – Southern Company has not yet provided formal comments on the rule, but CEO Thomas Fanning reported to Bloomberg in November “I don’t think we have the ability to maintain a reliable system” and comply with the new EPA rule.
Exelon – Exelon’s corporate position states, “Exelon believes that EPA’s proposal to reduce carbon emissions from existing power plants is both necessary and achievable on a timely basis at a reasonable cost. In comments to EPA, Exelon outlines specific recommendations for improving the proposal to ensure that carbon reductions are achieved with minimal impact to consumers and no disruption to grid reliability.” Exelon recommends dismantling the federal wind energy production tax credit, designing competitive markets, and supporting policies that promote nuclear energy.
American Electric Power – American Electric Power spokeswoman Melissa McHenry stated last week that, “Until we dig into all the details and how it all fits together, it’s too early to say…It won’t be until we have the state plans that we know what the impact will be to an individual (power plant) facility.”
Pacific Gas & Electric - Tony Earley, Chairman, CEO and President of PGE Corporation, praised the EPA, stating, “I congratulate the Administration on finalizing the Clean Power Plan rule and greatly appreciate the significant outreach and engagement with our sector. They [EPA] took the time to understand that states and regions are in different starting places and have different opportunities for achieving emission reductions. While we are optimistic about the contributions this rule will make, it is very complex and we must complete an assessment of its impact on our customers, state and region.”
PPL Corporation – No public comments have been made regarding CPP.
Public Service Enterprise Group – PSEG has not yet made an announcement regarding the finalized rule, but Geraldine A. Smith, General Environmental Counsel and Managing Director of the Environment Department at PSEG has previously stated “PSEG is proud to be part of the progress that has been made to reduce New Jersey power plant emissions. New Jersey has a low carbon-intensity, in part, because more than half of the state’s power is generated by nuclear plants, which produce no greenhouse gas emissions. In addition, PSEG has made energy efficiency a key component of our clean energy strategy. That is why we are investing almost $400 million in energy efficiency programs and want to invest more.”
Edison International - No public comments have been made regarding CPP.
While these ten utilities are united by vast size of their value in the market, their responses to the CPP are varied. Some have praised EPA for the updated rule, and some have countered with criticism. Others still, are taking their time to digest the information and determine its potential impacts. Unsurprisingly, those who have released comments have not changed their tone much upon review of the updated rules; Duke, NextEra, and Dominion have track records of being supportive of the proposed rule as well. Whether the changes in the proposed rule will appease those who were critical, remains to be seen.