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US electric utilities are failing on climate progress despite goals: Sierra Club


On average, report gave utilities a 'D' grade on climate

Grades based on thermal plants and renewable additions

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Most electric utilities are not on track to reduce greenhouse gas emissions enough to avoid the worst impacts of climate change, and utilities with climate goals are doing only slightly better on climate issues than their peers without pledges, the Sierra Club said Oct. 3.

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"We need more than lip service to combat the climate crisis – electric utilities need to make progress towards a clean energy future," the Sierra Club said in a report.

The report looked at 50 parent companies as ranked by remaining thermal plant ownership. The parent companies have 77 operating companies that make up roughly 40% of US power generation. On average, the utilities are failing, scoring a "D" grade, according to Sierra Club's analysis.

A growing number of states and utilities have set climate goals in recent years. Power utilities say they remain committed to their aggressive climate goals, despite a handful of delays to coal-plant retirement due to supply chain problems, reliability concerns or interconnection delays. Observers say the incentives in the Inflation Reduction Act should allow utilities to accelerate their climate goals.

Utility progress

The new Sierra Club report gave each company a grade from "A" to "F," based on its plans to add clean energy, retire coal-fired power by 2030 and avoid building new natural gas-fired power plants. The study replicates a similar analysis the group did about 18 months ago.

The Sierra Club considered whether each company is on track to achieve 80% clean energy by 2030 and 100% clean energy by 2035, thresholds the group says utilities must meet to avoid the worst impacts of climate change.

Compared to the prior study, the new analysis found little progress. Overall, the aggregate score of all the utilities was 21.1, or a "D," up from the previous score of 17.2. For parent companies with a climate pledge, the aggregate score was 23 out of 100, only 2 points higher than the overall aggregate score.

Looking at all the utilities' scores, 56% improved, 9% made no progress and 35% worsened, the report said. In total, the companies have committed to retire 28% of their coal generation by 2030, the report said. About half of the operating companies included in the study are planning to build new gas plants, the report said.

The utilities studied are also planning to build more than 130 GW of clean energy capacity through 2030. "While this is an encouraging increase, the generation from the clean energy resources planned by these utilities are only enough to replace 24% of their current owned fossil fuel generation, let alone the increased load likely to come form electrification and non-fossil retirements," the report said.

Sierra Club grades

Four companies achieved an A score based on the report: Public Service Company of Oklahoma, Entergy Arkansas, Northern Indiana Public Service Company (NIPSCO), and Xcel Minnesota. NiSource, the parent of NIPSCO, is the only parent company to receive an "A "rating. NiSource has a goal of achieving a 90% carbon dioxide reduction by 2030.

On the other end of the scale, 36 companies received an "F" score, including Duke Energy. The Sierra Club said Duke Energy and its utilities only committed to retire 18% of their coal-fired generation by 2030 and plan to build more than 5.4 GW of new gas by 2030. But the company has also increased its clean energy additions to 26 million MWh between 2022 and 2030, up from 17 million MWh planned in the last report.

Duke did not respond to a request for comment.

Industry response

The Edison Electric Institute said the Sierra Club's metrics are arbitrary and argued that nuclear and gas-fired generation are what enabled the US electric power industry to deploy 27 GW of renewables last year. Climate goals by investor-owned electric companies are firmly grounded in the industry's current understanding of technology and economics, and they reflect utilities' responsibility to prioritize customer affordability and reliability, said Brian Reil, a spokesperson for EEI.

"If the Sierra Club truly wants to accelerate the deployment of clean energy, they should consider joining the other environmental, industry and government leaders who are working together constructively to identify ways to overcome the barriers to building the transmission and other clean energy infrastructure we clearly need in order to deliver more resilient clean energy to customers," Reil said.

The Sierra Club said it is engaged in federal and regional grid planning efforts. "To accelerate the deployment of clean energy, utilities need action plans showing what they will do between now and 2030, and that includes improving the transmission grid, something Sierra Club supports," said Holly Bender, senior director of energy campaigns at the Sierra Club.