For decades, electric utilities in the U.S. have mostly been barriers to progress on clean air and clean energy. This mainly has to do with the perverse way they are regulated, which ties their profits to deploying huge amounts of capital to build huge power plants burning cheap fuel and externalizing health and environmental costs. So naturally they do that stuff! And they fight any attempt by federal agencies or anyone else to change that cozy situation, which protects them from the need to innovate or compete or worry their pretty little heads about where their next check is coming from. There are notable exceptions, mainly in states that have “decoupled” profits from selling power, but on average, the sector as a whole has been an anchor, a drag, on the effort to create a 21st-century power system.
But we’re nearing an inflection point. Massive new investments in power generation and transmission can no longer be avoided. Climate concern and support for clean energy keep growing, if fitfully. A bunch of EPA regulations are on the way. There’s a great deal of uncertainty in the air. So it’s interesting to see how utilities will respond. And it would be good for greens to get more directly involved in bringing public pressure to bear, both to punish and to support.
Today’s news brings some illustrative examples.
First there’s American Electric Power, a coal-heavy utility (and America’s biggest polluter) that is and has always been implacably opposed to progress. It’s circulating a legislative proposal that amounts to a total assault on the Clean Air Act, pushing compliance out another decade and making it all but voluntary. It’s so brazen that even the coal-friendly legislators in Congress are balking. The typically staid Fred Krupp is up in arms and his typically staid Environmental Defense Fund has a blunt webpage up asking how many deaths AEP is willing to trade for profit.
Then there’s Exelon, a coal-and-nuke utility based in Chicago. Today, Exelon CEO John Rowe has a coauthored an op-ed with Howard Learner of the Environmental Law & Policy Center supporting EPA’s “common-sense health protections.”
And then there’s Xcel, Colorado largest utility, which just a few years ago opposed that state’s Renewable Electricity Standard. Now it’s bragging that it’s going to hit the 30 percent target by 2012 — eight years ahead of schedule.
The differences among these utilities have a great deal to do with their resource bases and the regulations they face. But there is, even beneath all that, some element of bravery and foresight — or their opposite — involved. Utility executives do have some volition.
It’s great that EDF is jumping in here, but I’d love to see a much larger push among greens and progressives to publicize and celebrate the utilities doing the right thing and condemn the ones doing the wrong thing. The whole sector has operated outside public attention for too long. Time to drag this crucial drama out into the light.
[UPDATE: I meant to add, if you want a decent list of utilities on the Right Side of History, check out this letter from a bunch of utility CEOs to the Wall Street Journal: "We're OK With the EPA's New Air-Quality Regulations."]