As The Clean Power Plan Moves Forward, More Power Companies Are On Board

In the almost three months since the Environmental Protection Agency finalized its groundbreaking Clean Power Plan limiting dangerous carbon pollution from power plants, broad support for the plan and state efforts to make it work continues to be voiced throughout the electric utility industry. More time to review the final standards have yielded more power company responses, and they are consistent with initial positive reactions expressed by the industry.

While some power providers are suing to block the Clean Power Plan's implementation, it's becoming clear that the overwhelming majority of power companies have not opted to do so. According to the Wall Street Journal (subscription required), "Most electric utilities have a different strategy: They are embracing it. From Dominion Resources Inc. in Virginia to Dynegy Inc. in Houston to Ohio's FirstEnergy Corp., electricity producers say they plan to comply rather than contest the regulation."

Indeed, just yesterday many power companies, representing over 21 million electricity customers, intervened in federal court in support of the Clean Power Plan. They join a host of state and local officials, public-health and environmental advocacy organizations, a clean energy industry association and others. The power companies defending the Clean Power Plan cite to the compelling interest in maintaining the standard, which will hasten the transition to lower carbon emissions in the electricity sector.

Many power companies pursuing Clean Power Plan compliance understand that the emissions reduction targets simply accelerate the trend toward a cleaner energy future. Among other reasons for this trend, renewable energy and other cleaner energy options have become more cost effective. "The main reason [power companies are pursuing compliance], executives and experts say, is that economic forces are pushing the power industry inexorably toward a lower-carbon future. 'Everybody is moving in this direction anyway,' said Dominion Chief Executive Tom Farrell." (Wall Street Journal) Even some power companies filing lawsuits against the Clean Power Plan are hedging their bets by also pursuing compliance strategies, working in the states to help develop implementation plans. This is smart thinking--opposition lawsuits are likely to fail because the EPA's Clean Power Plan is legally sound.

Thus far, just less than two percent of the nation's more than 3,000 power companies have joined lawsuits against the Clean Power Plan. This, obviously, does not represent the views of all power companies. Furthermore, while some utility industry trade associations have filed anti-Clean Power Plan lawsuits, the associations do not reflect the positions of each of their members with respect to the Clean Power Plan. Meanwhile, other utility associations, including one representing the nation's largest power companies, have opted not to sue. "Edison Electric Institute, which represents shareholder-owned utilities, is staying out of legal contests while working with utilities and states to plot a path forward." (Wall Street Journal)

Positive power company statements regarding compliance are taking many forms. The expressions range from companies touting the Clean Power Plan's job creation benefits, to praising the coming greenhouse gas reductions, to committing to help states and stakeholders develop compliance plans, and more. Companies who have opposed aspects of the Clean Power Plan are typically supporting state efforts to develop compliance plans, instead of allowing for federal intervention.

Following are examples of some power company and association comments:

"Consumers Energy chief compliance officer, David Mengebier, said that, regardless of which of the four energy reform packages being considered by the state legislature this year, 'the Clean Power Plan will stimulate jobs in Michigan.'" (Consumers Energy)

"Rhode Island power provider National Grid also praised the final rule for enabling progress in reducing greenhouse gas emissions. National Grid, also the largest distributor of gas in the Northeast, has nearly 7 million customers and operates in Rhode Island, New York and Massachusetts. 'National Grid will be actively collaborating with the states and other stakeholders,' the company said, 'as they develop their implementation plans to ensure the reduction of greenhouse gas emissions from the energy sector and advance America's efficient and clean energy future.'" (National Grid)

"American Electric Power, an electric utility that operates in 11 states, is among the companies that intends to sue the administration over the rule. At the same time, the company's vice president, John McManus, said: 'We think it makes sense for states to at least start developing a plan. The alternative of having a federal plan has risks.' And he said that his company could support a cap-and-trade plan. 'The initial read is that a market-based approach is more workable,' he said. (American Electric Power)

NextEra Energy Resources, LLC President and CEO Armando Pimentel stated: "As the nation's leading renewable energy developer, owner and operator, with a significant presence in Michigan, we take great pride in developing and operating projects that are environmentally responsible and economically viable. We applaud Governor Snyder's efforts and are in complete support of Michigan submitting a state implementation plan as part of EPA's Clean Power Plan. We look forward to working with the State of Michigan and doing what we can to help the state cost-effectively meet the goals set out in the Clean Power Plan." (NextEra Energy Resources)

"'DTE supports Gov. Snyder's decision to move forward with developing a state plan to comply with the EPA Clean Power Plan,' the energy company said in a statement. 'If Michigan would choose not to submit a state implementation plan, the EPA could impose a compliance plan on our state. We believe Michigan knows what's best for Michigan and that the state should maintain control of its energy future.'" (DTE)

"'Consumers Energy fully endorses a Michigan-first energy policy,' the company said. 'We support Governor Snyder's announcement to begin the complex process of developing a State Implementation Plan to comply with the U.S. EPA's Clean Power Plan.' The state could have opted to go with a federal plan but has more flexibility with state implementation." (Consumers Energy)

"The Michigan Municipal Electric Association fully supported the Snyder administration's pursuit of a state implementation plan. 'With carbon controls for utilities on the way, Michigan public power would much rather work with our Michigan regulators to establish the best approach, because Michigan DEQ understands the value of public power and has always worked with us to find reasonable, flexible, best-cost approaches to clean air improvements,' said MMEA Executive Director Jim Weeks." (Michigan Municipal Electric Association)

"NV Energy spokeswoman Jennifer Schuricht said in a statement, 'We do not anticipate a significant impact on our customer rates as we move towards reliable renewable generation methods and reducing our emissions.'" (NV Energy)

"In Texas, where AG Ken Paxton has written to EPA requesting a stay of the rule with a promise to sue if the Agency does not concede, and where Gov. Greg Abbott is still mulling the 'just say no' strategy, utilities are hoping that the state will submit a plan. John Fainter, president and CEO of the Association of Electric Companies of Texas, said, 'I think it's always better for the state to participate in the plan rather than having the feds do the plan and tell you how it's going to be.'" (Association of Electric Companies of Texas)

"Duke Energy executive Jennifer Weber says the power company will focus on working with state officials on how to implement the Obama administration's Clean Power Plan as it considers whether to challenge the program. 'That is under consideration,' she said. 'But for now we are leaving that aside to work with our states on what compliance looks like.'" (Duke Energy)

These statements, and more, demonstrate clearly that as states move forward toward Clean Power Plan compliance, convening stakeholder meetings and exploring compliance options, many power companies are on board. While some diversity of views and strategies is typical in a diverse industry, the common trend among power companies is to be at the table as state plans are developed. Power companies have an important role to play as the nation continues transitioning to a cleaner energy future and all the health, environmental and economic benefits that this future will bring, and, thankfully, many are stepping up to help usher in that brighter future.

About the Authors

Montina Cole

Senior Attorney, Energy & Transportation program

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