Officials representing the nation’s $930 billion electric utility sector told Wall Street investors Wednesday that President Obama’s far-reaching climate rules are a “driver” of future investment, while appearing to shrug off the Supreme Court’s Tuesday night decision to halt the regulations.
“In many ways, the Clean Power Plan will be a driver of market forces already underway,” said the Edison Electric Institute’s Quinlan J. Shea III, representing investor-owned utilities in all 50 states, in prepared remarks to Wall Street investors.
In delivering the remarks, he discussed the court’s ruling, saying it won’t do much to change industry’s direction on clean energy development and that the plan is but one of many drivers. “Yesterday’s ruling, while fascinating, doesn’t really change anything,” Shea said during the Wall Street briefing. “There’s a lot of drivers. A lot of what we’re seeing now in the domestic utility fleet is occurring anyway.”
Shea was part of a delegation of officials from the trade group, including former federal utility commissioner Phil Moeller, who briefed investors on the state of the industry at a forum in New York.
Institute President Tom Kuhn emphasized that the electric power industry represents 2 percent of the nation’s gross domestic product, a $930 billion industry that is projected to spend $300 billion in just the next three years to improve the grid, including clean energy development.
The Clean Power Plan requires states to cut greenhouse gas emissions a third by 2030, which will help drive those investments. Nevertheless, more than two dozen states suing the Environmental Protection Agency over the emission rules successfully persuaded the Supreme Court’s five conservative justices to stay the regulations in an unprecedented decision Tuesday night.
Shea’s prepared remarks to investors did not mention the stay, although he did refer to the climate plan as “one of the most sweeping and far-reaching environmental regulations ever promulgated by the federal government to affect our industry.”
He said the for-profit utility industry is pursuing a low-carbon clean energy economy that takes into account climate change. “Whether it’s by expanding the use of solar energy and other renewables … improving energy efficiency, or by steadily retiring coal-based power plants, the nation’s utilities are intensifying efforts that, so far, have cut carbon dioxide emissions by 15 percent below 2005 levels,” he said.
“Every utility today is transforming itself for the future and … nearly one-third of U.S. power generation (32.3 percent) comes from zero-emissions sources (nuclear and renewables),” he said. “This trajectory will continue and will be accelerated under the Clean Power Plan.”
White House officials made similar comments to reporters late Tuesday night after the court ruled to halt the plan. They also played down the high court’s decision as “procedural,” adding that they will win on the merits of the case later this year in federal appeals court.
One senior White House official said the design, flexibility and clarity that the Clean Power Plan provides will allow it to endure beyond the court challenges and even into the next administration regardless of which party occupies the Oval Office.
“I think that utilities and states, even those seeking to challenge us in court, are looking for certainty,” the White House official told reporters. “It goes with the grain of where the U.S. power sector is going irrespective of where the political winds are blowing.”
Shea said something similar to investors on Wednesday.
“The final Clean Power Plan affords a good deal of flexibility for the states,” he said. “It also acknowledges a need to make resources available to states as they work to meet targets and to maintain reliable electricity.”
Many large investor-owned utilities have come under criticism for urging states where they have large market share to develop compliance plans despite the sweeping court challenge in the D.C. Circuit Court of Appeals. The high court stayed the EPA plan after the court refused to, but instead accelerated the briefing schedule on the merits of the states’ arguments.
The Supreme Court stay will remain until after the appellate court rules on the challenge later this year. West Virginia Attorney General Patrick Morrisey, who is leading the 29 states, urged states not to comply with the regulations, which are effectively moot under the stay. All compliance plans or state laws that have been passed to comply with the Clean Power Plan should be considered stayed under the high court’s decision.
Shea told investors that many of Edison’s members have been working with states to urge them to develop plans to comply with the EPA rule.
“EEI continues to promote cost-effective Clean Power Plan implementation options by supporting member company efforts to work with the states to develop practical compliance plans, and by advocating for a federal plan and model trading rules that preserve flexibility to address state-specific concerns, while creating broad, liquid trading markets that promote least-cost compliance,” he said.
One of the key reasons is to help state officials understand the consequences for long-term capital investment and how the Clean Power Plan’s deadline with other regulations, Shea said.
“States and utilities will need to look at compliance for this suite of rules holistically,” he said.
