POWER April 2017 - 20

The Future of Clean Energy
Is Dependent on States
and Utilities
Tahiya Sultan
U
.S. coal production in 2016 reached its lowest level since
1978. However, in its Annual Energy Outlook published
in February 2017, the U.S. Energy Information Administration
(EIA) expects coal-fired power to regain its place at the
top of the U.S. power generation mix in 2019 and hold that position
into the 2030s, if the Obama-era Environmental Protection
Agency's (EPA's) Clean Power Plan (CPP) is repealed.
Given the Supreme Court ruling in February 2016 that stayed
its implementation, President Trump's promise to repeal it, and
the confirmation of Scott Pruitt as the new administrator of the
EPA, the CPP appears doomed. The death of the CPP would drastically
impact federal government incentives to switch to cleaner
energy. However, if states, utilities, and the largest energy users
maintain their own clean energy goals, the spirit and aims of the
CPP will be met with or without its actual implementation.
The CPP tracks the U.S.'s commitment as part of the historic
Paris climate deal by requiring states to develop plans to reduce
carbon emissions from existing generating units that use fossil
fuels and encouraging states to reach a specific carbon reduction
target. Implementation of the CPP would ensure U.S. coal consumption
for power production decreases from its present level,
unless utilities invest more money to upgrade existing plants.
However, even if the CPP survives, states are not required to start
meeting lower carbon-emissions levels until 2022.
The CPP is a prime example of how federal regulations for existing
power plants could significantly contribute to lowering
carbon emissions. If the CPP is implemented, coal generation
would likely decline steadily through the 2030s and it would
greatly reduce carbon emissions and coal plant pollution. Conversely,
without the CPP, the EIA noted " there is less incentive to
switch from carbon-intensive coal to less carbon-intensive natural
gas or carbon-free fuels such as wind and solar. "
States Moving to Take the Lead
However, the Obama-era EPA was not the only regulatory body
aiming to reduce carbon emissions in the U.S., and the death of
the CPP does not mark the end of the country's clean energy future.
Many states have already begun to create their own carbon
emission-reduction targets and plans, thus fulfilling the aims of
the CPP on their own terms.
For example, legislation has been introduced in the California
Assembly to cap the amount of coal-generated electricity the
state uses. Under the current version of the bill, California would
entirely eliminate in-state use of electricity from coal by 2026.
The bill is largely symbolic because the amount that California
uses-about 6% at the end of 2016-is already small.
Though symbolic, the bill would codify into law California's
20
commitment to address climate change by eliminating coal-fired
energy sources entirely from the state's grid. It would also serve
as statutory protection against any future reversion to high-polluting
energy sources during unexpected service interruptions or
to accommodate electric demand growth that could occur with
the rapid expansion of the electric transportation industry.
Similarly, New York has continued with its plans to reduce carbon
pollution, investing in solar, smart power grids, electric car
charging stations, and offshore wind farms in an effort to eventually
reach a 100% renewable energy goal. New York already
receives 25% of its power from renewable energy sources.
Even Michigan-which is one of the 10 most coal-dependent
states in the country-has achieved some renewable energy objectives.
The Michigan Public Service Commission recently found
that all electric service providers in the state met renewable portfolio
targets of 10% by 2015.
The Role of Utilities
Similarly, the nation's largest energy users and electric utilities
are not waiting for closure on the CPP as they move forward
with reducing emissions. More than two-thirds of Fortune 100
companies and more than half of Fortune 500 companies have
renewable power or sustainability targets.
Many states have already begun
to create their own carbon
emission-reduction targets and
plans, thus fulfilling the aims of
the CPP on their own terms.
Furthermore, utilities and the largest energy users are directing
new investments towards natural gas and renewable-based
power production due to the low cost of natural gas and the tax
credits provided to produce more electricity from solar and wind.
In fact, many electric utilities anticipate that even if the CPP is
rescinded, stricter climate standards are likely at the state level
and under possible future federal administrations. Thus, many
utilities will continue to focus on cutting carbon emissions.
Regardless of the fate of the CPP, we will likely continue to see
states, utilities, and large energy users collectively reduce the
nation's carbon footprint and achieve greater renewable energy
targets, despite any near-term federal obstacles created. ■
-Tahiya Sultan is an associate with Davis Wright Tremaine in the
firm's San Francisco office.
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POWER | April 2017
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POWER April 2017

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