Climate

Why Have So Few Utilities Joined The White House’s Climate Change Pledge?

CREDIT:

In this photo taken Jan. 19, 2012, smoke rises in this time exposure image from the stacks of the La Cygne Generating Station coal-fired power plant in La Cygne, Kan. (AP Photo/Charlie Riedel, Filr)

If the American Business Act on Climate Pledge contains companies “voicing support for a strong Paris outcome” and “demonstrating a commitment to climate action,” as the White House describes the participants, then few of the largest private electric utilities are part of that explicit effort.

Out of the 154 companies that have signed on to the act the Obama administration unveiled over the summer, only two signatories — P. G. & E and NRG Energy — belong to the larger top 20 utilities, a group that represents as much as $468 billion, according to some figures, and a service area encompassing most of the United States.

Last week, the White House circulated the newest additions to the act, showing myriad industries jumping on board and pledging detailed commitments. Online retail giant Amazon, car manufacturer BMW of North America, healthcare provider Kaiser Permanente, and 70 others promised to reduced emissions and water usage, become more energy efficient, and more.

Although these pledges are submitted by the companies and are designed to their business practices, larger players like Duke Energy, Next Era Energy, and Dominion Resources — to name the three larger firms — are still abstaining from the voluntary pledge. The American Business Act on Climate pledge is partly designed to send a message of support as leaders in Paris negotiate a climate agreement that can set the world to avert the most dramatic effects of man-made climate change.

“They are taking a more wait and see attitude,” said Charles Ebinger, senior energy security and climate initiative fellow at the Brookings Institution, referring to the nation’s top utility companies. Many utilities are reluctant to join the act, Ebinger said, because the effort was unveiled right when some officials and companies are fighting Obama’s Clean Power Plan, which calls for reductions in carbon emissions from the electricity sector by 32 percent over 2005 levels by 2030.

Electricity accounts for nearly a third of U.S. emissions, and the plan is considered a critical component of President Obama’s efforts to address climate change, an issue that is an increasing priority to domestic and international organizations as evidence of its impacts takes hold. The U.S. climate rule has, however, faced heavy opposition from Republican leaders and officials from coal reliant states. In fact, lawsuits against the rule are ongoing.

For their part, utility companies contacted by ThinkProgress were quick to note that they are committed to lowering emissions and have already made changes to their operations, all while working on how to abide by the Clean Power Plan.

“Duke Energy has had voluntary CO2 reduction goals that align with the Obama Administration’s pledge for U.S. reductions made at the Climate Change Conference in Copenhagen — 17 percent reduction by 2020 from 2005 levels,” said Shawn Walsh, a spokesman for Duke, via email. Duke Energy, Walsh wrote, has achieved 22 percent reductions to date.

American Electric Power has made changes too, the company says, although it has not taken the American Business Act on Climate Pledge.

“We’ve long supported actions to address climate change and right now we are focused on helping the states where we operate determine options for compliance with the Clean Power Plan,” said Melissa McHenry, a spokeswoman for AEP, via email. “By 2017, AEP will have cut its greenhouse gas emissions 25 percent from 2005 levels,” she said.

The reported reduction in emissions comes as electric utilities seem to be embracing the Obama’s Clean Power Plan, as reported by the Wall Street Journal. In addition, companies like AEP, which serve more than five million customers in 11 states, seem to be distancing from groups that oppose climate change action. On Tuesday, AEP said it will stop being a member of the American Legislative Exchange Council (ALEC), a right-wing organization that routinely opposes the deployment of renewable energy and acting on climate change.

Ebinger, the energy expert, believes that it’s only a matter of time before most — if not all — major electric utilities join the pledge.

“It’s going to take a while,” he said, noting that those that rely more on coal could do so later than others. “I would emphasize the slowly,” he said.

NRG Energy joining the pledge seems to validate Ebinger’s point and could be an indication that larger utilities and companies involved in electricity generation and distribution could follow. Moreover, the American Business Act on Climate Pledge already has CALPINE, America’s largest generator of electricity from natural gas in its ranks, and Warren Buffet’s Berkshire Hathaway Energy, as well as smaller yet important utilities like National Grid, which serves New York.