NRDC, EEI Recommendations Will Spur Clean Energy Progress

At the close of a lively debate before the nation’s utility regulators, the Natural Resources Defense Council (NRDC) and the Edison Electric Institute (EEI) today released a joint statement supporting new utility policies to accelerate America’s transition to a clean energy future, including further reductions in greenhouse gas emissions, ensuring affordability of energy services, and improving system reliability.

During the debate at the National Association of Regulatory Utility Commissioners (NARUC) winter meeting in Washington, D.C., EEI Executive Vice President Phil Moeller and I sparred over whether an “all of the above” energy strategy made sense for the nation’s electric utilities. I continue to believe “all of the above” is more like a laundry list than a coherent policy (in the memorable phrase of UC Davis Law Professor Albert Lin). Utility regulation is about hard choices on the merits, not a reflexive pursuit of every plausible energy resource option, and I argued that we’ve done this well enough in recent decades to achieve sustained reductions in both pollution and electricity bills, thanks in good part to the dominant role of energy efficiency over the past 40 years. I pointed out that “all of the above” has been a popular slogan since the turn of the century for both political parties at the federal level, but it’s useless for front-line state utility regulators; as I observed, the symbol on the cover of one of NARUC’s most widely cited resource planning manuals is a scale, not a cornucopia. And Phil Moeller’s former hometown utility in Washington State long ago adopted as its investment philosophy “Best resource value for our customers,” not “all of the above for our customers.”

Notwithstanding any differences on the merits of all of the above,” NRDC and EEI, which represents the nation’s investor-owned electric utilities serving 220 million Americans (two-thirds of the population), have joined in 21 recommendations that will accelerate our ongoing clean energy transition at a critical time.

NRDC and EEI have not always agreed on energy issues (witness today’s debate at the National Association of Regulatory Utility Commissioners’ Winter Policy Summit in Washington, D.C.). However, today’s joint statement reflects common ground on the progress of the nation’s clean energy momentum and the role that utilities and others can play in supporting it. Here’s a partial look at what we’ve achieved:

And, as NRDC’s most recent annual energy report showed, the United States has decisively broken the link between electricity consumption and Gross Domestic Product, and the result has been a drop in electric sector carbon pollution despite our expanding population and economy.

The NRDC/EEI recommendations

The wide-ranging EEI/NRDC statement urges state utility commissioners and others to build upon America’s already significant progress toward a clean energy future, with such recommendations as:

  • A renewed commitment to the transition of the electricity generating fleet to a cleaner energy future, including reductions in greenhouse gas emissions;
  • Supporting state and federal energy efficiency standards for buildings and equipment, as well as voluntary energy-saving initiatives like ENERGY STAR®;
  • Augmenting electric company investment in energy efficiency programs across the nation;
  • Creating smarter energy grid infrastructure to help integrate renewable resources like wind and solar energy;  
  • Efficiently electrifying transportation, buildings, and industry (substituting efficient electric alternatives for fossil-fueled equipment is increasingly important for lowering customer bills, reducing carbon emissions, and meeting federal air quality standards); 
  • Allowing utilities to offer customers additional renewable energy options that provide everyone with the opportunity to meet more of their electricity needs with cleaner energy;
  • A voluntary transition to enhanced electric transmission grid integration, which will help reduce costs and harmful emissions while improving reliability;
  • Continued industry-wide coordination of equipment stockpiles for responding to floods, storms, earthquakes and wildfires, with equitable cost allocation, and a reexamination of liability rules that may not be well suited to an era of increasingly violent and destructive weather and wildfire events;
  • Joint investigation of ways to break the linkage between electric companies’ financial health and their retail energy sales, and performance-based earnings opportunities, as ways of encouraging successful utility investment;
  • Using informal collaboration to develop utility rate reform proposals for consideration by regulators, supplementing traditional rate-setting procedures; and
  • A transition to more flexible electricity rate structures that fairly capture costs and savings associated with the use of the electric grid, which will benefit both customers and the utilities that serve them.

This is the fourth EEI/NRDC statement submitted to NARUC over the past 15 years, each of which has anticipated and embraced reforms that have contributed significantly to the nation’s clean energy progress. Far more work is needed to reach our climate goals, but these are important steps forward. For more information on NRDC’s vision of how we can meet our climate goals, see our groundbreaking report, America’s Clean Energy Frontier: The Pathway to a Safer Climate Future.

About the Authors

Ralph Cavanagh

Energy Co-Director, Climate & Clean Energy Program

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